A worker on £40k per year is £39 pw better off than his unemployed counterpart.

(181 Posts)
orwellian Wed 16-Oct-13 15:40:20

I find this astounding.

A nuclear family in one of the outer London boroughs (2 parents, 2 kids) with husband sole breadwinner will have an income of £30,007 (£577 per week) on a £40k wage plus child benefit of £1,750 per year or £33 per week. Council tax is approx £30 pw. A travelcard from zone 4 into town is £43.60 per week.
Pay in full for school meals.
Pay in full for prescriptions.

Weekly total (minus council tax and travelcard) of: £536.

A nuclear family where both parents are unemployed in London would get;

child benefit x 2: £33
child tax credits x 2: £115
2 bedroom LHA allowance (outer London) of: £236 or 3 bed if children are different sexes and over a certain age: £300
income support/jobseekers allowance: £112.55.
No or little council tax to pay.
Free school meals.
Free prescriptions.

Weekly total of: £497 (2 children both same sex) or £560 (if different sexes or one over ten).

So, the household with one earner on £40k per week is at the most £39 a week better off than their unemployed counterpart and the unemployed family is not affected by the benefit cap unless they claim the 3 bedroom rate of LHA.

Work really doesn't pay does it.

gamerchick Wed 16-Oct-13 15:42:28

Well there you are then OP.. give up work and you'll rake it in. What you complaining about?

Reality Wed 16-Oct-13 15:43:06

I'm not really sure what your point is? Unless it's that wages dont' meet the cost of living, especially in London.

Work does pay, in more ways than just money.

I think you're being just a teeeeensy bit goady there, no?

No, Work doesn't pay as much as it ought to under this government (not that labour are any better). I suspect though that you meant "we should make unemployed people suffer more so that I can feel better about what I have"

Was that it?

gamerchick Wed 16-Oct-13 16:02:35

I must admit according to the OP if benefits match 40k a week then maybe they are a tad high grin

Lizzylou Wed 16-Oct-13 16:06:28

And so the reports go more and more people are using foodbanks every month.
What are these feckless scroungers spending the taxpayers money on?
Wide screen tvs, lots of Christmas presents, fags and booze I would wager!

(just getting the bingo started wink )

orwellian Wed 16-Oct-13 16:08:46

The point is that people in work should be taking home much more than those on benefits. The whole system discourages work.

Income taxes should be reduced and benefits should be replaced with a higher tax threshold so that when people move into work they pay no tax.

Those on benefits should not be paid more for each subsequent child or to level the playing field perhaps all families in work should be paid child tax credits, regardless of how much they earn rather than being punished for working?

ZippityDoodahday Wed 16-Oct-13 16:13:46

It still pays to work, in the long run. There's a huge stigma attached to being on unemployment benefits. Not that many people out there aspire to make a career out of claiming benefits nor raise a family on them.

gamerchick Wed 16-Oct-13 16:15:07

So you want people to suffer so it's worthwhile you working?

Like I said, if it's so cushty.. what's stopping you claiming? Sounds like the life of riley.

ZippityDoodahday Wed 16-Oct-13 16:15:19

I do agree though that our benefit system is too generous. The cost of childcare is also an issue.

TheOrginalPoster Wed 16-Oct-13 16:15:50

The point is obvious.

Why bother getting up early in the pitch black, paying a fortune in travel, get treated like shite by your boss, have loads of work stress laid on you, commute for up to three hours a day and never , ever see your family while the person at home who cant afford childcare get to deal with everything else all on there own for 14 hours a day while trying to work from home.

Why bother having no time to do other jobs so your entire weekend gets taken up catching up on chores so really you never, ever rest.

Its fucking miserable.

Why be exhausted and stressed all the time for no advantage at all ?


JohnnyUtah Wed 16-Oct-13 16:18:54

I think you also can do a similar calculation for a low paid worker on tax credits - there is no point in bettering your earnings through learning skills or getting promotion because everyone ends up on the same income.

noblegiraffe Wed 16-Oct-13 16:19:14

They wouldn't both get child tax credits, so deduct £115 per week from your calculation.

HeeHiles Wed 16-Oct-13 16:21:10

Benefits are not too bloody generous - wages are shit!! That's the problem.

ouryve Wed 16-Oct-13 16:25:49

but noblegiraffe, a difference of £154 per week doesn't give people so much to froth about!

Wallison Thu 17-Oct-13 09:39:30

They wouldn't get £560 a week anyway - as you yourself point out, OP, there is a benefit cap of £500 a week.

Also, it's probably worth noting that the bulk of the benefits payment is housing benefit, which of course is money that the family never sees because they hand it over straight to the landlord. With the LHA cap in place, that is unlikely to cover the full rent. For example, round here LHA is £135 a week for a 2-bedroom place, but even the cheapest 2-bedroom places cost £650 a month to rent - and many of them are £675. So, there's a shortfall of £90-£125 a month. That's not in London, where I'm guessing the disparity is even greater - so let's say that they're having to find say £130 a month or £32.50 a week out of the rest of their benefits just to pay the rent. Council tax won't be a negligible amount any more now either because of the abolition of council tax benefit - say another £40 a month at least. And they'll have to spend something on travel - if nothing else, fares for going food shopping, fares into the job centre and also fares to the mandatory work programme, probably fares to interviews etc. That's before any discretionary travel is taken into account. Not sounding quite so generous now, is it?

A big thing to remember as well is that the earner on £40k is likely paying off a mortgage - the renter on benefits is paying off their landlord's mortgage and will have nothing to show for all of that money 25 years down the line.

But hey, if you want to live like that, then give up your job and go and try to find somewhere to live while you're on the dole - after all, it's an easy life, isn't it?

MrJudgeyPants Thu 17-Oct-13 13:23:52

orwellian Whilst I understand the point you are making, and even feel some sympathy towards your position, you're fecking mental if you think Mumsnet is the sort of place for this debate!

Those on benefits should not be paid more for each subsequent child

This gets trotted out regularly by people who haven't thought it through.

Imagine you have a good job. Enough to support your four children - though your savings have been gradually eaten up by the recession. Suddenly you're out of work and someone says "Well you can't have food for child 3 and 4. You shouldn't have had so many you worthless parasite".

What do you do? take 2 of your kids to the vet to be put down?

MrJudgeyPants Thu 17-Oct-13 15:54:38

Conversely BackOnlyBriefly, if you cant find a job to support yourself, why do you think you'll have more luck securing one that pays enough to support a large family? It's a question of incentives and disincentives to work balanced against incentives and disincentives to have more and more kids and where we choose to draw a line. But on that note, I'm going to take my own advice - I'm outta here!

SoonToBeSix Thu 17-Oct-13 15:59:54

No Op the worker would be £154 a week or £667 a month better off as you doubled the tax credits. Next time check your facts before posting.

KiplingBag Thu 17-Oct-13 16:10:59

BackOnly - the 2 children bit is not about children already born, but being on benefits and then having more children whilst still on them. And I wholeheartedly agree with that.

Anyone can find themselves claiming through not fault of their own., but being on bens and then increasing the family is just plain irresponsible.

Chubfuddler Thu 17-Oct-13 16:24:33

I'm a single working parent with two young children

There may well be single parents who not at work whose household income, taking into account housing benefit and the equivalent value of free school meals, equals mine.

Guess whst?

I don't mind.

JohnnyUtah Thu 17-Oct-13 17:26:09

The unemployed family would get tax credits, noble. They would get CTC but not WTC.

oliveoctagon Thu 17-Oct-13 17:30:20

I would find it embarassing if I didnt work so even if I got double for doing nothing at home I wouldnt take it. In the long run its much better as you have prospects, maintain your self respect and your own life. Its always better to be in work.

Chubfuddler Thu 17-Oct-13 17:33:10

Yes if I didn't work I wouldn't be sitting at home stressless. I'd be shitting myself with fear about benefits cuts and how I was going to cope financially when my children were no longer deemed to be my dependants and my income was drastically cut. And I'd be bored.

Being on benefits sounds terrible and I sincerely sympathise with anyone in that situation.

RandomMess Thu 17-Oct-13 17:33:33

As soon as you include housing benefit it doesn't work - the people who earn their money may have a mortgage or may be renting and getting partial housing benefit...

The big problem is the housing and rental market - this is what needs sorting out.

frogwatcher42 Thu 17-Oct-13 17:35:54

Actually regardless of whether the difference is £40 or £154 better off - its not a good amount for working 5 days a week! If you factor in work clothes, parking, and travel to get to work then I would hazard a guess work hardly pays in this situation. If you then factor in help with school trips (if on benefits (in our school you don't have to pay for PGL (£400!) for example)), free school meals each day, free dentist, free entry (or reduced entry) to many attractions if on benefits, free music lesson (if on free school meals our school gives free county music lesson), help towards uniform etc etc then work really does not pay.

But surely this is not news to anybody. The same calculation can be done for some workers receiving working child tax credits. Its often not worth getting a pay rise or getting a promotion, unless you get a massive increase in wage.

But as I say this is not news. This has been the case for ages. I remember in toddler groups many years ago, people working out whether to accept a job or a promotion and often deciding not to as it wouldn't pay.

frogwatcher42 Thu 17-Oct-13 17:39:08

And surely housing benefit should be included in the calculation as the worker would have to pay for housing out of their wages. And on £40k wouldn't get any tax credits or help with housing. I don't think they are entitled to anything except child benefit.

bebopanddoowop Thu 17-Oct-13 17:43:25

I call bullshit on those figures

frogwatcher42 Thu 17-Oct-13 17:43:31

I feel quite strongly about this though - the problem is that wages are too low. Not that benefits are too high.

We all have to live, but work should pay better than it does at the moment. I know whole families very well who choose not to work (close relatives and neighbours). They manage a decent standard of living but are not swanning off on cruises etc. They would struggle with less.

However, work really does not pay at all in UK at the moment as the stress can be so high for very little benefit.

AnythingNotEverything Thu 17-Oct-13 17:43:58

Like others, I'm not convinced by your figures. For a start, you don't get the same amount of child benefit for your second child.

frogwatcher42 Thu 17-Oct-13 17:48:04

But op hasn't said you get the same CB for each child? Just stated that for two children it would be £33 a week. That sounds about right doesn't it?

expatinscotland Thu 17-Oct-13 17:48:16

Jack it in and go on benefits if it's such a life of Riley.

frogwatcher42 Thu 17-Oct-13 17:50:48

I don't think the figures can be that far out as it is only about £230 plus child benefit to live on. The housing benefit is different as specifically for housing.

Surely benefits of £230 per week for living isn't far out if you are two adults, two children. Plus child benefit. Plus housing.

That cannot be too far out of line I don't think.

frogwatcher42 Thu 17-Oct-13 17:51:42

Expat - I don't think anybody is saying it is a life of Riley. Just that life is shit for all on benefits or earning under £50k!!!!!

frogwatcher42 Thu 17-Oct-13 17:52:17

And I truly think it is shit.

And DC needs to wake up to this imo. Its too hard for too many people.

Benefits are far too generous, and the cost of housing is far too high.

At least they are changing the benefits system to make it harder for people to opt out of working at all and claim benefits as a lifestyle choice.

Now we just need the housing market to properly crash and rents and mortgages go down significantly so we aren't all wasting so much of our income just keeping an overpriced roof over our head.

ithaka Thu 17-Oct-13 17:55:29

The low wages and high housing costs in this country are a national disgrace.

Benefits basically subsidise employers (many of which are large, wealthy, multinational firms) paying below a living wage and landlords charging exorbitant rents.

Our taxes are subsidising a load of freeloading sponging fat cats - and I am not talking about benefit claimants.

MrsDeVere Thu 17-Oct-13 17:58:52

Do you ever post about anything else OP?

MrsDeVere Thu 17-Oct-13 18:00:19

CB is counted as 'money you already have coming in' and is therefore deducted from IS.

Unless things have changed recently

Mintyy Thu 17-Oct-13 18:04:07

I think it should be possible to be surprised at the reality of this without being accused of benefits bashing. And I am a lifelong lefty and proud.

An income of £40,000 is not a high income if it has to support a family. I think some of those on lower incomes who say that they would love an income of £40,000 plus are forgetting that at level you don't get any benefits or support, which makes a huge difference.

The reality is that (where there are two parents in a family who are able to work) only those in a relatively cheap area of the country would choose to live on just one income.

ohmymimi Thu 17-Oct-13 18:08:14

I mind, I wish I didn't, my view of the whole benefits industry has changed over the last ten years. I now live surrounded by the pension credit mafia. They pay no rent or council tax and get help with their utlility bills, get attendance allowance for 'disabilities' which somehow don't seem to require any 'attending'. They nearly all have cars less than three years old, take two or three holidays a year (cruises, trips to South Africa and New Zealand, Christmas hotel breaks), have a succession of upgraded white goods, TVs etc, home redecoration at least every three years with the new furniture/flooring to complement it. I live in a rural village, in a smallish area of social housing for the over 60, but I do not think this is a local aberration. How do they do it? Cake and eat it. Capital stashed with relatives for a start. These people
seem the most respectable, upstanding citizens, who are the first to criticise and report anyone working on the black, for example, and would be affronted by any criticism of their state clienthood- in fact, amazed that anyone should question their entitlement. If I had read this before I moved here l would have dismissed it as benefit bashing tosh. Why did I work and, save (and forgo holidays and a lot more to do so) to ensure I could retire with a reasonable pension and pay my way? This lot all have more affluent lifestyles than I and look at me with a dead stare when I mention concerns over rent rises or utility costs.

So nothing about our current system truly surprises me any more. But, working and providing for myself has given me immense satisfaction, stimulation, sense of self-worth and pride and I would not have chosen another path.

oliveoctagon Thu 17-Oct-13 18:08:47

If your outside of London mintyy 40k is more than enough

I don't think it's fair to include travel card costs, as unemployed people are still obliged to travel to a job centre regularly, or might need to leave the house.

You're right that middle earners struggle, but please don't fall into the trap of hating poor people because of it - it is not their fault. We should be raising living standards for all, not fighting over scraps.

ohmymimi Thu 17-Oct-13 18:14:53

Forgot to add the thlhmmthlconfused

expatinscotland Thu 17-Oct-13 18:15:24

Yes, because those who are too poor to have ever bought property deserve the worst! We can automatically assume they sat on their arses their entire lives and never did a single day's work hmm.

eggyhead Thu 17-Oct-13 18:17:03

In reality, is it possible to get all those benefits? If so, yes, that is very unfair.

I think the problem is that wages just haven't risen (not in my sector/location) anyway.

My friend was earning £20k as an HR Assistant almost 20 years ago. I see the same type of jobs being advertised at the same salary yet they are asking for graduates. What the hell is going on?!!!

difficultpickle Thu 17-Oct-13 18:18:26

Another single working parent who did claim benefits when unemployed a couple of years ago. All I got was JSA and free council tax. I was unemployed for 3 months. I wasn't entitled to anything else as I owned a house (with a mortgage). If I rented I would have got housing benefit too. On balance I'd rather be working than live on that and put up with the patronising attitude at my fortnightly JSA interviews.

The LHA for a two bed property in zone four is currently at £184, not £236. I have no clue where you got that figure from.

eggyhead Thu 17-Oct-13 18:19:48

£40k outside of London is enough, oliveoctagon?

Do you have a couple of kids and live and own a house in the South East?

Mintyy Thu 17-Oct-13 18:26:00

You make a good point eggyhead. The job that I did in 1990 for £16,000 attracts a salary of about £22,000 now.

"You're right that middle earners struggle, but please don't fall into the trap of hating poor people because of it - it is not their fault."

I don't see any hatred on this thread but I haven't read every post.

I have a friend - a single parent of two - caught in the benefits trap. And the scandal is that she is a skilled person who could earn a good salary (£30,000 + at least).

expatinscotland Thu 17-Oct-13 18:26:49

PMSL @ £40k being enough outside London. There are several cities in the UK that rival London for house prices and low wages.

MrJudgeyPants, I would answer your post if I had any idea what you said. It didn't seem to have anything to do with what I said.

KiplingBag you said being on bens and then increasing the family is just plain irresponsible

My instinct is to agree with you there. I certainly wouldn't be trying to have a large family in that situation.

Then again nearly everyone I know who is working full time is also on benefits of one kind or another. Should I frown on them having children too? They will get more benefit if they do so that's a drain on the system.

What about someone who can't work because of a disability? Should they have less right to breed than a banker? It gets tricky.

Some newspapers created an image of people saying "Hey, I don't think I'll work any more. I'm going to have a whole bunch of kids to milk the system and spend the extra food money on a big TV and lots of beer".

Such people do exist, but I suspect in tiny numbers - they are just too good a front page story to resist.

I think most people are just trying to get by and can't work because there are 100s applying for every job.

I did suggest once that we pass a law limiting all families to 2 children. That way it is fair and limiting the population growth makes good sense if there's not enough jobs and homes to go around.

Reality Thu 17-Oct-13 18:36:54

We managed very much nicely on 40k in the SE a few years ago.

Now we struggle a bit on nearly twice that.

My diamond shoes must be pinching a bit

The cost if living has far outstripped wages in the last few years.

frogwatcher42 Thu 17-Oct-13 18:45:11

I am not an accountant but think there needs to be a massive increase in the minimum wage and then an increase in wages (if there cannot be a massive decrease in the cost of living).

Once the minimum wage is hugely increased then what about this for an idea - rather than giving tax credits to people (who wouldn't need it as everybody would be getting a living wage) the government could give a type of tax credit to any company that can prove it is unsustainable for it to pay the minimum wage. Therefore subsidising those companies genuinely struggling paying a liveable wage and thereby keeping the economy going while artificially enhancing wages. But not subsidising those companies able to pay more in wages with still a good profit like we do at the moment (I wonder how many people working in the UK for the energy giants get working tax credit - yet the companies are making millions in profits. Same with supermarkets. It really doesnt currently make any sense how it is).

Chubfuddler Thu 17-Oct-13 18:49:18

With benefits and child support my income is nearly 40k. I'm doing ok but certainly even with the help 2 buy scheme I can't see owning a suitable family home a realistic goal anytime soon. And I have been in continuous employment, including whilst at university, since I was 15.

MrsDeVere Thu 17-Oct-13 18:50:14

We live in London.
3 dependent children.
Our income is nowhere NEAR 40k.

We are fine. Vulnerable but fine.

Chubfuddler Thu 17-Oct-13 18:52:14

When did you buy mrsdv?

It's not the mortgage payments. Those would be less than my rent. It's the deposit.

expatinscotland Thu 17-Oct-13 18:53:56

The cost of private renting is enormous and usually far more than a mortgage sad.

EeTraceyluv Thu 17-Oct-13 18:54:03

If your outside of London mintyy 40k is more than enough

Absolute bullshit. We live in a very prosperous, very very expensive city in the east and bring home under £35K between us. We get hardly any tax credits - £40 a month or something stupid, pay dinner money, actually have started to give them packed lunches, I daren't get my eyes tested till recently because of the cost of new glasses, dh never goes to the dentist now, because we can only really afford for one of us to pay for it and our outgoings including bloody council tax are huge, I get so cross when it is assumed we are laughing all the way to the bank because of where we live, because we have a mortgage here, in the city, as opposed to a nearby village which is where most of my colleagues live, (interest only, so are fucked in about 15 years unless things improve) It's incredibly hard whether in London or not.

Mintyy Thu 17-Oct-13 18:59:47

Do you mean your income including all benefits is nowhere near £40k Mrs DV? Perhaps your housing costs are not all that high?

If someone has discredited the "facts" in the op post then can I be directed to the post?. I confess to not understanding all the ins and outs of benefits, especially housing benefit, but I come at this from the pov that £40,000 to support a family is not a high income, rather than benefits are too generous.

EeTraceyluv Thu 17-Oct-13 19:01:27

I used to think £30K was a fabulous income, but it just isn't any more. It's not the fault of the 'benefits system', it's the rocketing of the cost of living!

Wallison Thu 17-Oct-13 19:07:07

I agree, EETraceyluv, and the cost of housing is the worst of all. How did we get into the situation where so much of income goes on just putting a roof over people's heads? When our parents' generation were buying houses they could afford to do it on one very average income - factory workers, rail workers (like my father), postal workers ... everyone could afford to house their families. And now you have the ridiculous situation where even dual-income families struggle and housing benefit costs £21bn a year (a year! ffs).

EeTraceyluv Thu 17-Oct-13 19:14:32

I don't mind not having holidays like we used to, and I don't give a monkeys about going out or takeaways, but it's just awful when we literally cannot afford new clothes or shoes for the children when they need them - that's not meant to sound pitiful or pathetic, it is just a fact now sad

soul2000 Thu 17-Oct-13 19:14:46

Frogwatcher. For many privately owned small and medium sized businesses
they would need to be massive cuts in VAT and local business rates.

MrsDeVere Thu 17-Oct-13 19:15:03

Yes of course I mean our whole income.
What else would I mean confused

Yes our housing cost are low. We are lucky. I am very aware of that. But up until very recently everything we had was thrown at the mortgage. No holidays, no clubs, no going out, not takeaways. It all went on getting that mortgage as low as we could because OH might have to stop working at any moment with no warning.

Most people living on benefits have to rent. Renting is much worse than owning now days. The way rents have been allowed to rise is obscene. Round here it costs around 1500 a month to rent a 3 bed. You are paying someone else's mortgage plus for that.

Its unaffordable. Even for basic accommodation.

I am so grateful that I am not in that situation.

MrsDeVere Thu 17-Oct-13 19:16:52

But sending kids with pack lunches is not exactly a hardship is it?

We have always done it. What is the point of spending money on school dinners if you can't afford them?

irishe Thu 17-Oct-13 19:18:20

Housing costs are a disgrace, that's why I am unsure about the govt help to buy scheme. Why is our govt propping up unsustainable house prices? I do have sympathy with those who are struggling to get on the housing market now and count myself very lucky to have bought my first house 2 bedroom house in Edinburgh for 68k in 97. I do recognise the personal tragedy of those who want to buy and can't but fear that propping up the big builders will only sustain the unaffordability of housing in the uk. Surely on a basic case of supply and demand, if customers cannot afford to buy then prices (at some point) must come down?

frogwatcher42 Thu 17-Oct-13 19:21:30

Soul2000 - sorry I don't understand. Would that be the case if the NMW was increased and they could apply to pay the increase out of some form of tax credit so that it didn't affect those companies not making massive profit.?

I think it would be impossible to increase the NMW dramatically without protecting the lower profit companies as they wouldn't be-able to afford to pay people. But at the moment the government is giving benefits to people who are working but on low wages. Surely for the high profit companies who benefit from this by having low paid workers that is wrong.

soul2000 Thu 17-Oct-13 19:21:44

There would need to be massive cuts in VAT and local councils would need to reduce business rates massively. Many business in catering cant even afford the minimum wage that is set now £6.23 Per Hour. Most pubs cant even afford to pay their staff the minimum wage. I am sure catering is not the only industry in the country that is struggling to survive.

EeTraceyluv Thu 17-Oct-13 19:23:22

I know it's not a hardship, it's just that we always used to have the choice.

soul2000 Thu 17-Oct-13 19:27:36

Sorry Frog. what does NMW stand for.

MrsDeVere Thu 17-Oct-13 19:27:58

There has to be a total shift in the housing culture.
Houses should be homes.

Now they are seen as commodities.

Everyone deserves a decent place they can call home. Owned or rented.

frogwatcher42 Thu 17-Oct-13 19:28:08

Soul - what I am suggesting though is that for those companies really struggling they would get help paying the minimum wage so they would be better off even though the NMW would be a lot higher.

So a win win. Workers would get their full wage from the company they work for, companies struggling to pay it would get help in the form of tax credits (which used to go direct to those workers), but the very rich companies wouldn't get help paying their wage bill and so the government makes a saving for those workers who worked for the high profit companies but now are fully paid by them and not tax credits.

To me it seems a good idea !

frogwatcher42 Thu 17-Oct-13 19:28:27

Cross post - National Minimum Wage.

soul2000 Thu 17-Oct-13 19:31:55

Sorry. I thought you were talking about a term for VAT threshold .


frogwatcher42 Thu 17-Oct-13 19:34:39

Soul - it probably does mean that.!!! I am often the stupid one on here!

Anyway - thank you for discussing it with me. There was me thinking I had come up with the answers to the countries problem and everybody ignored me except you - so thank you.!!!!!!!! Obviously it wasn't as good as I thought!!!!!!!!!!!!

soul2000 Thu 17-Oct-13 19:42:50

Thanks Frog. Say a small company is not making any profit, why not reduce their vat bill to 10% or less if the company paid the saving to the staff.

Another stupid thing is business rates are killing many small and family owned businesses. These family owned businesses in many circumstances
only have enough to pay their staff "CRAP"wages.

I know of families who own business that have been going 75 years plus who "EVEN KNOW AFTER THE SUPPOSED RECOVERY" are not taking salary's these long established companies are fighting for their survival.

frogwatcher42 Thu 17-Oct-13 19:47:34

soul - its rubbish isn't it.

There is so much that is wrong that it is hard to know where to start.

The problem is that the councils probably cannot afford to cut business rates as their budgets are being slashed all the time too. There will come a time I should imagine where we have to pay for some of the basics in life such as bin collections as councils won't be-able to afford to pay it out of what they get. The council priorities will always have to be services for those who can't help themselves such as child protection, schools, social care, benefits, council housing etc. For those in work the services they receive may have to be paid for I would think. Then it will get even harder.

I think in parts of Ireland they pay for bins.

TheHammaconda Thu 17-Oct-13 19:53:42

Soul, Say a small company is not making any profit, why not reduce their vat bill to 10% or less if the company paid the saving to the staff
Firms would employ some creative accounting procedures and file accounts showing they were breaking even. VAT is paid by customers to the firm, the firm then pay this on to HMRC so reducing VAT to small firms wouldn't necessarily benefit the firm. It would, of course, mean they could perhaps undercut larger rivals by charging a lower overall price.

oliveoctagon Thu 17-Oct-13 20:54:47

House prices are high here and wages are very low. Very rare to encounter anyone on 40k. Average hoise price is 14 times income

oliveoctagon Thu 17-Oct-13 20:57:09

We are on 32k between us and I would describe us as affluent compared to the vast majority

£300 JSA?
The couple rate is about £120.
I smell shite.

TondelayoSchwarzkopf Thu 17-Oct-13 21:08:10

I agree with everyone who has said the issue is not with benefits but with wages. We have artificially suppressed wages - maybe partly related to our credit culture and because home owners have become dependent on property price inflation to provide them with cash rather than lobbying for better wages.

There are also huge benefits with being an earner that those on benefits do not get:
- pension contributions
- private medical cover
- sight test vouchers
- maternity leave
- childcare vouchers
- sick pay
- death in service benefits
- support and infrastructure.

I would take that £39 any time. (not that I believe those numbers add up)

NotDead Thu 17-Oct-13 21:20:51

rates on small businesses are weird, its councils taxing oeople on low incomes and irregular salaries so that duffers in nice suits can have big pension plans and bice workibg environments. Cuts mean..oh no we must raise more money from the businesses that can't object. . so they go out of business and bigger businesses in out of town sites who can resist get better deals.. its all about pushing money upwards at tge moment. ..

HeGrewWhiskersOnHisChin Thu 17-Oct-13 21:27:46

I got out and looked at this year and last years tax credit award.

2013-2014 I've told them I will earn £2500 more than the previous year 2012-2013.

I assume this takes me above a special threshold... As my tax credit award is now less £4500 than last year.

My pay rise and promotion has actually meant I'm £2000 worse off.

I don't blame the unemployed or the people who earn less, I blame the stupid system!confused

Wallison Thu 17-Oct-13 21:28:40

No, the numbers do add up - he hasn't counted the CTC twice. However, if like I say you discount housing benefit (which goes to the landlord) our hypothetical unemployed family's income is £261 pw. If you make the deductions I stated ie that they are paying some rent, some council tax and say £10 a week transport costs from that, they are left with £198.05 which sounds like a lot but that's for four people and will have to cover all household expenses, bills, food, clothes etc.

<awaits a cavalcade of posts about making a boiler chicken last a week>

HeGrewWhiskersOnHisChin Thu 17-Oct-13 21:37:14

The figures in the op are right.

Cb is not deducted from Income support either. You get the 70 odd pound (single person amount) plus the cb and tax credits.

Why is it when people want to talk about how much benefits actually are, others accuse them of getting the numbers wrong?

It must be really hard for people to hear the truth.

frogwatcher42 Thu 17-Oct-13 21:37:47

I think the numbers do stack up. Once the figures are worked out there isn't a lot there for a family of 4.

The simple fact is that in the same breath there isn't a lot left from a £40k wage for a family of 4 either - particularly as to work costs quite a lot of money in real terms (running an extra car for anybody rural, travel, parking, suits or work clothes).

frogwatcher42 Thu 17-Oct-13 21:43:12

I just did an entitled to on myself to see if I could afford to live without dh income. If I reduce my working hours to 20 and earn £18k, I will receive over £14k in benefits (mixture of tax credits and housing benefit). That's equivalent to a wage of £32k for working 20 hours a week. In real terms it is equivalent to more as the benefit part of the income would be tax free.

If I was in this situation why would I choose to work full time for a wage of £32k when I can get that (and the extra due to it being tax free) for not working full time.

The system is very odd.

frogwatcher42 Thu 17-Oct-13 21:56:16

All figures in above post made up of course. Just did another one based on having a dh and it isn't so successful. Guess I will just have to get rid of him then!!!!!!

I really don't think that it can be stressed enough that the problem isn't with benefits (people have got to be able to live) but with the high cost of living and the low wages.

oliveoctagon Thu 17-Oct-13 22:01:03

frogwatcher - Most people would prefer to be working full time with a dh than being single on benefits with no prospects

Wallison Thu 17-Oct-13 22:02:47

Agree entirely that we are becoming a low wage economy with a high cost of living. And the biggest cost of living is housing - as seen in the example worked out in the OP, housing benefit is their biggest chunk of income, and that will just get passed on straight to a landlord. There are £billions every year going from public funds to private hands in this way.

HeGrewWhiskersOnHisChin Thu 17-Oct-13 22:04:26

And to the poster who said the op incorrectly doubled the tax credits ...

When I was unemployed with 2 DC 4 years ago I got £100 per week tax credits. So it sounds about right for it to be just a little over that now.

MrsDeVere Thu 17-Oct-13 22:04:34

I haven't been on IS for many years (I think it was called something else then)

When did they stop taking the CB off?

They would technically give it to you.
But deduct the amount from your IS.

So has that changed now?

frogwatcher42 Thu 17-Oct-13 22:06:38

Olive - I think it is naive to assume that working part time and getting benefits in the form of working tax credits and housing benefit means you have no prospects. You have the same prospects as somebody working part time with a dh in the background, but not getting benefits due to the second wage.

I also think you are wrong re most people wanting to work full time with a dh. There are many of us that choose to work part time. Also there are many women who choose not to have a dh - they are not single simply because they cannot find a dh!!!!! If I had my time again (and it is still a possibility now!) I would choose to not have a dh!

HeGrewWhiskersOnHisChin Thu 17-Oct-13 22:09:09

Definitely changed. I first claimed benefits in April 2004. I think this was when the changes happened because I remember it really mattered if my DD was overdue or not ( she was).

Cb was not deducted then and again when I had to claim 4 years ago it was the same.

HeGrewWhiskersOnHisChin Thu 17-Oct-13 22:09:12

Definitely changed. I first claimed benefits in April 2004. I think this was when the changes happened because I remember it really mattered if my DD was overdue or not ( she was).

Cb was not deducted then and again when I had to claim 4 years ago it was the same.

Chubfuddler Thu 17-Oct-13 22:12:24

I work part time as a solicitor and receive tax credits. How interesting to learn that I have no prospects.

MrsDeVere Thu 17-Oct-13 22:13:43

all this talk of 'equivalent'.

But it isn't is it? The money is not in your hand. You have no prospects, no status.
They can, and do, stop the money at anytime.

Really, the system is there for everyone.

So you do have the choice to go for it if you think its worth it.

But people don't because they know it isn't.

They won't give up their careers/jobs to claim benefits and be only £39 worse off.

I recently had the opportunity to give up work as DS's DLA increased. With that and carer's allowance it would have just about covered my (very) part time wages. I don't claim CA now because I earn just a bit over the threshold.

I thought about it. I find it quite hard to work. I recently had to take some time off sick (first time).

It was very tempting. But of course I didn't. Because in five years time I would be on the same bit of money or the government might well have discontinued DLA and CA altogether.

Plus I am aware that most people in my position would kill for my job. Part time, in school hours, professional status etc.

I have a job and its always worth having a job. The less I have to rely on benefits the better. We might end up on full benefits one day and the thought is terrifying.

MrsDeVere Thu 17-Oct-13 22:15:46

grin @ chubb you waster you.

humphryscorner Thu 17-Oct-13 22:16:12

If the OP is right, then its thoroughly very fucking depressing. This country is fucked up.

Also I read some where that a large portion of people using the food banks are workers - don't know if that's true...

When I was on my own with DD1, worked and claimed tax credits ,housing credits and council tax- I was financially better off than me and DH are now and we both work.

It doesn't pay to work or go straight these days.

oliveoctagon Thu 17-Oct-13 22:20:22

Here if you stay at home its 99% you have no prospects, have to live in rented insecure housing and low disposable income. Not something I envy even though they get large amounts on paper they have no assets, no security, no control and its not an enviable lifestyle like the op suggests.

oliveoctagon Thu 17-Oct-13 22:23:17

Also they might get housing benefit now but once their children leave they will be living in a tiny awful dump. It doesnt sound that appealing.

MrsDeVere Thu 17-Oct-13 22:25:05

Of course it bloody pays to work and go straight.

If it didn't why are you doing it?

timidviper Thu 17-Oct-13 22:25:39

I don't think anyone is suggesting being workless is an enviable lifestyle are they? I think a lot of people would agree that it should not pay the same or more than working though.

frogwatcher42 Thu 17-Oct-13 22:26:20

MrsDeVere - why is the money not in your hand on benefits? I accept that housing benefit isn't but then for the average worker the money comes in and straight out for housing so effectively they don't really see that part either.

I do know quite a number of people who have made the choice to be on benefits actually. They don't have it easy and I am not one to say that benefits are too high, or blame people for being on benefits. It is hugely more complicated than that and usually there is no choice due to a shortage of jobs or disability. However there are a number of people who do choose it and that is fact. I stress that it isnt that benefits are too high - it is that the cost of living is too high for wages.

It is an interesting point about people not giving up their jobs and living on benefits though. I suppose there is a small band of people who for whom it would be worthwhile - according to this thread it appears that those with a family income of just below £40k would be the ones who could justify it. In real terms there are probably few families on that as it is a difficult amount to manage on as we have ascertained so the second person works and then the family income is higher and it would be impossible to give up and go onto benefits. If you are on considerably lower than that then you get tax credits which bumps the income up a bit.

I suppose there is also the justified fear of the future. At least in work it is easier to keep in work and you are not reliant on the governmental whims.

HeGrewWhiskersOnHisChin Thu 17-Oct-13 22:27:49

Lots of working people have to live in insecure rented accommodation too!

The good thing about working is getting my wages for the month together rather than in dribs and drabs on different days weekly.

What annoys me the most is comments from people who 'earn' less than me but I know get housing benefit and tax credits and are taking home the same as me.

If I mention this then I'm benefit bashing

oliveoctagon Thu 17-Oct-13 22:28:34

They have it easy now but I have friends that have moved out and their parents lose all the cb and tax creds are moved in to awful dumps can only get minimum wage horrible jobs and are in their 40s and 50s. Would you honestly swap to live like that? I would rather work full time and not have that happen to me.

middleagedwoman Thu 17-Oct-13 22:28:48

It does pay to work if you will progress and get more. I used to live in London, earned a low wage, and I was worse off than my friend on benefits. Especially when you take into account the costs of working - travel, suitable clothes that I otherwise wouldn't have bought.

But I progressed to a better wage. For those who stay on minimum wage or just above, no it usually doesn't pay to work financially.

And just want to point out, loads of people that work do not own their own home and probably never will.

frogwatcher42 Thu 17-Oct-13 22:29:24

Here if you stay at home its 99% you have no prospects, have to live in rented insecure housing and low disposable income. Not something I envy even though they get large amounts on paper they have no assets, no security, no control and its not an enviable lifestyle like the op suggests.

But the family on £40k have the same situation as their income is practically the same according to these figures. And they have the cost of working, no free school meals, no free dentist, no free prescriptions, no free school trips etc etc.

Nobody is saying that people on benefits have it good. In fact this has been the least benefit bashing thread i have seen. They are saying that workers on £40k have it bad too.

oliveoctagon Thu 17-Oct-13 22:31:39

I dont know about that but we are on 32-34k and we have our own place, modern car, foriegn holiday etc. Most of my friends dont both work full time and are on benefits and dont have the same as us.

middleagedwoman Thu 17-Oct-13 22:31:57

This article says that in 2012, the typical family income in London was just under £35,000.


middleagedwoman Thu 17-Oct-13 22:32:58

Sorry. The £35,00 is typical household income. Not the same as typical family income.

frogwatcher42 Thu 17-Oct-13 22:34:26

Middleagedwoman - what you say is correct if you can earn well over £40k (as per ops post).

A lot of jobs will never pay that however hard you work or however many promotions you get.

I do get that the people on benefits are likelyto be in a worse position than workers when their children leave home though.

But work is getting more and more difficult to find, and I know many people who have lost their jobs in their 50s and are now working on minimum wage doing things like security as they can't find anything else. They may find that once again they are not much better off than those on benefits in that situation.

MrsDeVere Thu 17-Oct-13 22:35:31

That is what I mean. The housing benefit goes directly to the LL. So the amount is almost irrelevant. The claimant does not control the housing market. If the rent was halved they would be no worse or better off.

It is always lumped in with cash benefits as if the people claiming it are rolling around in tenners. The tabloids tend to add in other 'freebies' like prescriptions etc as if the chemist hands out fifty quid every time someone on benefits pops their head in the door.

Also if you own your own house and are paying mortgage you have an huge asset. This is also something conveniently glossed over on many of these threads. People comparing their housing costs (as a house owner) with someone who is renting

There are no facts about people choosing to live on benefits. No statistics, nothing. Its all anecdotal. I am not saying there are no lazy bastards but why are they the ones who get the focus?

Has anyone really given up their £35k job to live on benefits? Who would do that?

middleagedwoman Thu 17-Oct-13 22:35:44

Yes frog, I know plenty of people who have lost jobs in their 40's and 50's as well, and getting another job as you get older, gets harder and harder.

thecatfromjapan Thu 17-Oct-13 22:36:11

All of you saying that the workers may (one day, with a fair wind, or, if they are older, were lucky and bought a while back) own their own home are not factoring in the big whammy that is around the corner ...

... I reckon many, many home-owners are going to end up selling their houses - and losing a lot of the equity in them - to pay for care in old age.

I think that by the time our generation hits old age there are going to be few, if any, curbs on how much you pay and the reality for home-owners is going to be paying, a lot.

I'm not terribly well at the moment, and I do find that feeling poorly tends to make me see the world (and the future) through a slightly darker set of glasses ... but I do find I worry about what things are going to be like by the time I become vulnerable through old age. sad

oliveoctagon Thu 17-Oct-13 22:37:06

Exactly mrsdevere mortgages are considerably cheaper than renting and its yours forever. You wont have that if you were on benefits.

frogwatcher42 Thu 17-Oct-13 22:37:12

Olive - I have no idea how you manage to buy a house, have a newish car, a foreign holiday on less than £35k! We get a lot more than that and couldn't do it.

Do you get tax credits or is that your true family income?

middleagedwoman Thu 17-Oct-13 22:37:58

DeVere - Loads of working people rent. Their wage also goes to the landlord. Someone on this wage is unlikely to be able to afford to buy in London. So it is comparing like with like.

This isn't bashing people on benefits. Lots have no choice. But I have known people who are long term unemployed who are shocked when they find out they are not much better off.

oliveoctagon Thu 17-Oct-13 22:39:40

We have tax credits towards childcare but not enough to cover it other than that no. We dont really need any more.

thecatfromjapan Thu 17-Oct-13 22:39:52

A poster further up the thread mentioned that she thought many of those using foodbanks were working. I heard that in a radio report too. I am not even a little surprised.

I begrudge those on benefits absolutely nothing. I would never want benefits reduced: why would I want a world even worse for my children? where there is even less to prevent them being exploited?

But there is something seriously wrong about the cost of living and wages. sad

PosyNarker Thu 17-Oct-13 22:41:40

This thread is depressing.

Why 40k single earner? That's surely not an average family.

I live in Edinburgh. You could live well on 40k as a singleton, and decently as a couple. If you want (not unreasonable IMO) to own a 3-4 bed family home and look after a couple of kids, 40k means you're moving out to the sticks.

I have friends on HB. The increased Edinburgh prices haven't benefited them personally (central sure, shitholes also) to the extent that several when on the CH list and took better accomodation in shitty estates rather than pay a slum landlord. Of course they didn't have 8 kids and there's always the exception the DM likes to publicise. Most people I know (and I know plenty) on benefits don't have a life that I would envy, regardless of the size of their tellie.

We take home more than twice 40k FWIW, have a 'standard family home' 3 miles out and are comfortable but still have to be careful and by no means rolling in it. So no, 1 family living off a single earner on 40k in central London is not well off even if the individual is moderately successful - irrelevant if we're talking about the overall family, kids situtation etc.?

middleagedwoman Thu 17-Oct-13 22:46:32

The average salary in London is £46,000.

In 2011, the median salary in London was £27,560. Meaning 50 % of workers earned less than £27,560, and 50% earned more.

So no, £40,000 is not really a low wage in London for a single earner.

middleagedwoman Thu 17-Oct-13 22:48:32

I think those who are well off, usually have no idea how most people live. The rate of personal debt, and the amount of people with arrears in rents and mortgages who are working, is relatively high.

Lots and lots of people out there are really really struggling.

frogwatcher42 Thu 17-Oct-13 22:52:11

This really is depressing as it appears from this that there are a huge raft of workers on the upper limit of working tax credits or on £38k or so that are worse off than being on benefits assuming they are two adult, two children households (but one income) ????

What is more depressing is that I truly feel that benefits are not too high so that means that wages are even more crappy than I thought.

middleagedwoman Thu 17-Oct-13 22:56:48

I do not want benefits cut. But I think the fact that so many people are on low wages, means that they take out their resentment at this, on those on benefits.

I remember when I was really low waged, DP and I lived in a pretty rough area. I remember a neighbour who worked in a low paying job, ranting about a really nice family with 2 kids in the same street, who openly said, it didn't pay for them to get a job.

They blame the wrong people. But yes, wages are too low in the UK.

Custardo Thu 17-Oct-13 22:59:58

the op hasn't done a true comparison like for like

also has fucked off

middleagedwoman Thu 17-Oct-13 23:01:43

Why is it not a true comparison Custardo?

Blu Thu 17-Oct-13 23:03:20

Wages compared to housing costs in London are the problem.

But in work you have the potential to progress - to a pay rise or to promotion. Training courses. Your employer may be paying into a pension scheme for you. There is the potential for the other partner to begin work and increase the overall income.

On benefits you are treading water.

The cash benefits of being in work are only part of the story.

Custardo Thu 17-Oct-13 23:06:43

try getting the big companies to pay more in tax

the tax that big companies are avoiding paying in the uk is more than triple the benefits budget.

this is not about saving the fucking country like some war time spirit bullshit we're all in this together my fucking arse you cockweasal privatly educated never done a proper days work in your life cameron prick.

this is about ideology

the ideology that you're all mangy fucking plebs who didn't work hard enough to succeed so deserve to fail.

if money in an age of austerity were the issue - they would be chasing the tax dodgers down like motherfuckers .

if money were an issue in an age of austerity there wouldn't be suddenly money found for free school meals for ALL children whilst other benefits are being fucking meanstested

if money and not ideology were an issue in an age of austerity - there wouldn't be some small arse fucking token dipshit £230 PA £4 a week for fucks sake - what the fuck is that if not a royal fuck you to those who arn't married

i blame the plebs they don't vote

Custardo Thu 17-Oct-13 23:09:07

fucking foodbank use tripled from 2008 to now

this is your country OP


where people have to go and line up for food becuase they can't fucking afford it

in THIS Country

so take your fucking benefit bashing rhetoric and go somewhere else with it

middleagedwoman Thu 17-Oct-13 23:09:24

Yes high housing costs are the problem. But many workers never get much promotion. Low paid jobs very rarely offer non contributory pension schemes.

We know that people in work tend to be healthier. Work gives people companionship and a sense of achievement.

But if you are in London, or anywhere else with high housing costs, you have to be pretty well paid relatively, to be better off financially.

middleagedwoman Thu 17-Oct-13 23:10:43

Custardo - This isn't benefit bashing. Lots of people including me have said we don't want benefits to be less. We want wages to be higher.

Blu Thu 17-Oct-13 23:16:16

middleagedwoman - the theoretical person in the OP could well be a teacher. A teacher in outer London could be on £25k or £27k.

Custardo Thu 17-Oct-13 23:27:57

i was addressing orwellians post - and that's how i read it.

maybe public sector workers, nhs, teachers could get paid more if they collected taxes form their good chums the tax evaders / party donators

PosyNarker Fri 18-Oct-13 00:28:59

Well off is such a subjective term. I might start a thread on it in actual fact.

I know objectively I'm not badly off (I'm one of those £50k plus higher rate taxpayers) but city must come into it (3rd most expensive city in UK) as well as surely household income. I happen to have a boss who is on about 70k, which I'm sure sounds fab, but in the south east, wife doesn't work...guess which off us turns up in the office in the designer shoes.

Point being, it's not just benefits, it's location. And I agree that for a very small number of people, benefits have allowed them to access living locations that aren't available to the rest of us. However you square that it's unfair and needs addressing.

middleagedwoman Fri 18-Oct-13 00:33:59

Posy, if you don't have poorer people living in London, then those who are better off will suffer. Who will be the nursery workers, staff the coffee shops, clean the offices, be the TA's, healthcare assistants? If you are low waged, travel costs mean there is no point paying tarvel costs for a long distance.

drawsofdrawers Fri 18-Oct-13 01:16:32

There are not 'several' cities that rival London in terms of house prices. Average price is now £500k

And I am laughing at the comment about a family earning £40k will likely be paying a mortgage - plenty earning double that for whole home ownership is a ridiculous dream.

oliveoctagon Fri 18-Oct-13 06:37:34

drawofdrawers on 40k many could get a flat so why not just live in that? At least then you own something.

oliveoctagon Fri 18-Oct-13 06:43:31

I just searched for flats with 2 bedrooms for 150k and found 127 properties so there are some very cheap places in London. You could easily move your kids in there.

I bought a place nearly as expensive as that when me and dh were on an income of 13k and 4k + student loan in 2006 and afforded the payments.

Chubfuddler Fri 18-Oct-13 06:58:50

127 properties. In the whole of London. A city with about, I have no idea really - 2 million residents?

And even if you could afford one of those properties, there's no saying living there would be in any way practical from the POV of where work is, where school is, where family are.

But jolly good. Crisis, what crisis?

oliveoctagon Fri 18-Oct-13 07:06:34

Im just saying home ownership can happen on a very cheap price in London if you look at that. There are way more on 200k which is easily affordable on a 40k wage.

oliveoctagon Fri 18-Oct-13 07:10:26

Go on rightmove there are some nice places for 200k you could easily have 2 or 3 kids in.

YouStoleMyHat Fri 18-Oct-13 07:18:19

Erm... What about the deposit? That would be at least 20k (if you're lucky) on a £200k property. Where's that supposed to come from when you're paying out all your earnings every month on rent and bills?

Also on 40k you would get a mortgage of a maximum £160k (probably less these days) - that's not going to go far in most cities. Most likely you'd get a 1-bed flat for that price, not really practical if you already have two kids for example.

oliveoctagon Fri 18-Oct-13 07:25:19

We are in our 20s and did that on a lot less of a wage. Nothing wrong with living in a 1/2 bed flat with 2/3 kids just partition bits off.

Chubfuddler Fri 18-Oct-13 07:30:06

You're either being deliberately obtuse or a bit dense.

No one will lend 200k to a household with an income of 40k now. 2006 was prime housing bubble territory. Lenses were offering 110% LTV mortgages. That is impossible now. Most firms of benefits are ignored as income for the purpose of calculating mortgage affordability.

So whst you were able to do in 2006 is frankly irrelevant.

oliveoctagon Fri 18-Oct-13 07:32:12

We have been offered more recently to move to somewhere bigger. Have you actually spoke to lenders we are on a joint wage of 32-34k and we have been offered 160k but I dont wabt to move for a couple more years as am doing a masters. Just ask your mortgafe broker in the estate agents. Thats who we have recently seen.

YouStoleMyHat Fri 18-Oct-13 07:40:36

Partition bits off? You obviously haven't house hunted where I live - every square inch would already have been taken into account and made into an extra bedroom/ bathroom if possible to make a bigger profit. The reality is that money wouldn't even buy a small one bed in many locations in the UK.

On these threads there are always people who come on with their own situation/ story - saying I did X, I live on X amount and it's fine, failing to mention that they bought 10/20/30 years ago and are paying peanuts for housing costs compared to now, or they bought during the boom years with a big mortgage etc. The reality is lots of people are tied into very high housing costs because either a) they bought recently or b) they have no hope of buying as the rental costs are too high to be able to save anything. Saying you can easily live on much less than 40k/ can buy on less than 40k isn't true for many people through no fault of their own.

Blu Fri 18-Oct-13 07:45:02

Chubfuddler: the population of London is over 8m!

oliveoctagon Fri 18-Oct-13 07:45:53

We are both only in 20s. I am talking about now. I used to worry like you about living somewhere small, but now I have had another child I have stopped worrying. My two share a bed and dont seem bothered by it. I used to panic because my mum would say how will you cope etc, but thats old school thinking. We are going for a 3rd in here and will put the baby in our bed.

YouStoleMyHat Fri 18-Oct-13 07:48:18

That's great for you Olive but it's just not true for many people. Some (lots) of people wouldn't be able to get the deposit together no matter how small the flat. It's still a huge sum of money.

merrymouse Fri 18-Oct-13 07:53:30

Long term the benefits option is much worse.

No prospect of improving income. Income reduces once children leave. Continued rental costs for rest of life.

The person with an income can aspire to earn more money, will keep their income regardless of dependants and theoretically can pay off their mortgage (no more payments) and has an asset.

Agree that £40k is very little these days though. That is why it is not massively far above benefits level. It will also seem less because sensible people spend the excess on boring things like insurance, dentistry, pensions etc.(although these things are a squeeze on 40k), and 'essentials' like Christmas, misc. school costs, and swimming lessons.

Chubfuddler Fri 18-Oct-13 07:57:18

Having bought in 2006 you have equity and a proven history of paying a mortgage. Can you really, honestly not comprehend that places you in a far better position when asking for a mortgage than someone with no deposit who has rented?


I don't believe you can't understand that. I'm teetering on saying you are being disingenuous.

Which is lawyer speak for lying.

oliveoctagon Fri 18-Oct-13 08:08:23

I havent got equity from 2006 lost about 10k from then we put down 22k though so have about 12k but prices have come down so it all equals out I suppose. I did used to worry about living in a small place and having lots of kids but now I think I had unrealistic expectations based on what my parents have. I am not bothered any more, and even my mum has relaxed about it.

I suppose now with rising population it will always be like this, and most of my friends are having kids in 1/2 bed flats.

dialpforpizza Fri 18-Oct-13 16:45:45

My two share a bed and dont seem bothered by it. I used to panic because my mum would say how will you cope etc, but thats old school thinking. We are going for a 3rd in here and will put the baby in our bed.

Councils up and down the country are heaving under the pressure to move families out of cramped flats into accommodation more suitable for families. A key aim of the bedroom cap is to free up family accommodation from those who don't need them (whether it's successful in doing so or not remains to be seen.)

So while I admire your spirit, you may just be lucky that your DC don't seem to be bothered because, as far as I'm aware, not having the option available of a proper bed for each child (there may be a time when they want/need one) would be frowned upon by the authorities, so not sure that's to be advocated for every starter family really, sorry.

frogwatcher42 Fri 18-Oct-13 17:04:05

I find it amazing that so many people think it is simple to get a promotion or new job to get above the £40k level if you are working. Most jobs earn well below that even at management level.

There are proportionately few jobs earning over £40k. So even if you are in work, get promotion you are still worse off if you cant break over that threshold.

A well paid teacher would get what? Around £38k with extra responsibility? A nurse with years of experience and responsibility would earn about £40k maybe (I really don't know). In Local Government (planners, social workers etc you rarely get above £36k even in senior role unless leading a decent size team.

So how do those of us in ordinary careers get a massive rise. I would love to know as I have been trying for years!!!!!

Chubfuddler Fri 18-Oct-13 17:09:57

Most lawyers in private practice don't even earn 40k. I don't.

Chubfuddler Fri 18-Oct-13 17:11:06

My mum retired from nursing five years ago, as a senior sister with departmental responsibility and acting as a clinical lead, after 30 years of service.

She earned 32k. Full time.

Grennie Fri 18-Oct-13 18:22:49

This is why in most households, both partners work. Most of us now depend on two incomes to live.

oliveoctagon Fri 18-Oct-13 18:48:54

dialforpizza - Thats because people on benefits get council houses and they are big. Most working families I know are in 1/2 bed flats.

frogwatcher42 Fri 18-Oct-13 19:34:35

There appears to be some huge presumptions on all sides coming out on this thread - not in a bad way but actually in a really beneficial discussion way.

Firstly it is assumed that those in work have prospects to increase their incomes over time to quite a great extent so are therefore better off than those on benefits and not in work. That does not appear to be quite the case nowadays with the job shortages and low wages - most senior roles pay quite low.

Secondly - it is assumed that those in work will be in a better position when the kids leave home than those on benefits as they will lose a large chunk of their benefit money. However, with the job market as it is there is very little job security and people in their late 40s and 50s and 60s find it harder to get employment. Although in truth this assumption is probably true, it is certainly less certain than in the past. Many 40 - 60-70 year olds may find themselves on benefits having worked for years but lost their job.

Thirdly - there is an assumption by the public in general that benefits are too high. Yet many workers on the same level of income struggle badly to pay their way so therefore by default the benefit claimant on the same income would struggle too. Thus showing that benefits are not too high.

And I feel proud to have been part of a very good, open discussion that hasnt slagged off workers or people on benefits. It has been a good kind thread so far in general.

changeforthebetter Fri 18-Oct-13 19:42:47

What Chubfuddler said.

PosyNarker Fri 18-Oct-13 23:09:38

I must admit most working families know on low to middle incomes in the private rental sector are in smaller properties than equivalent families in social housing. Having said that, this holds true for working families in social housing, so I don't think it's a low income vs benefits thing. I'd also note that some of my friends / acquaintances in council housing are living in absolute shithole areas, with loads of crime, no amenities and shitty public transport. Load of room in the shitty, randomly decorated flat with the junkie neighbours hmm

eggyhead Sat 19-Oct-13 00:06:55

I think oliveoctagon is on another planet.

Surely, you would need to put down at least a 10% deposit of £40k on a £200k flat? That means a mortgage of £160k (four times salary). Are there any mortgage companies still offering those sort of multiples?

I borrowed 4.25 times my salary and had a 95% mortgage when I bought my one bedroom flat in 2002. When I sold it in 2008, despite several pay rises, I would have had to put down a bigger deposit and borrowed 5 times my salary. I got on the property ladder just in time. It makes me shudder when I think about it.

showtunesgirl Sat 19-Oct-13 00:56:37

Seriously? People still believe this shit? People on benefits are not the people causing problems here. Do the maths!

I for one am about to move from one place to another, rented and in the last three years, rent has gone up by 50%, yes 50% and the last time I checked, my wages haven't gone up by that much.

We did all the calculations including maybe moving somewhere where we could buy to get to our work in London but with the extra childcare costs on top and the train fares, it actually worked out the same amount of money. sad

We effectively feel like our hands are tied.

And it's also just a lie to believe that you can just not work and get the council list to live the life of Riley. The council house waiting list here is very, very long and if you can get HB, most landlords here won't touch you with a bargepole.

This is such an interesting thread, because it is such a complex issue and benefits scum vs everyone should get lots of money doesn't answer the issues.

olive I agree with others that you're on another planet. Bringing up a family of three in a two-bed flat is not commendable. It's overcrowding, with the attendant health issues and reduced academic achievement that go with it.

£40k is a high salary, and there really aren't that many jobs outside of London and the South East that pay that, even for experienced graduates.

This thing about people on benefits being well off, well I have some sympathy for the view. But only that I work myself ragged as a single parent, and many families can work part-time or have a SAHP because their lives are subsidised by tax credits etc.

But the kicker is that this is changing. As Universal Credit rolls out, people will not get these benefits - rightly or wrongly. Many people have been on these benefit 'packages' for years, and don't get reassessed. That will change with UC.

As an example, an exBF of mine works part-time, and gets several hundred pounds of housing and council tax benefit a month because his income is so low. There is no compulsion on him to earn more, which he could quite easily do as he's single with no dependants. Under UC, he will have to show he is looking for work on a fortnightly basis or lose some of his benefits. And I agree with that.

merrymouse Sat 19-Oct-13 09:01:53

frogwatcher, the comparison is also based on two people claiming benefits, but only one person working. In reality I think people who attempt to support a 'nuclear' family on one income of £40K are in the minority.

However hard it might be to improve your position on £40K it is possible. It is not at all possible if you remain on benefits. (Although I agree with your general point that life is very hard for many families despite the so called economic upturn).

olive, working families live in council houses and receive housing benefit. Social housing is designed to provide housing for people on low incomes, not people who don't work. Obviously some people living in council houses are unemployed, but I know plenty of people with full time jobs living in council houses. Remember when all those people bought their own council houses back in the 80's? (or maybe you heard about it in a history lesson). They weren't doing that on their housing benefit. Where that kind of family is supposed to live now is another question. You can't get a council house if it doesn't exist.

frogwatcher42 Sat 19-Oct-13 14:13:48

Merrymouse - In reality I think people who attempt to support a 'nuclear' family on one income of £40K are in the minority.

You may be right. But in reality the main worker probably gets more like a gross salary of £29k and the other part time worker around £10k. Therefore it is still under £40k. I think salaries for one person of £40k are so rare outside of London that even with two workers this whole comparison still works.

JakeBullet Sat 19-Oct-13 14:22:23

I am currently a Carer for my DS but when employed was on about £40k. Tbh I think £160 a month is a huge sum to be better off by.....I know I really felt the pinch when I left work and began claiming benefits.....and I get extra as DS gets DLA.

Work DOES pay, not just financially but in many other ways too....adult conversation, the satisfaction of having done a days work and having achieved something...all leave you feeling in the land of the living.

I really miss the to and fro of work which is why I opted to do some voluntary work while DS is in school. It is only one afternoon a week but I help another person during that time and liaise with other people.

Work even voluntarily DOES pay.

Wallison Sat 19-Oct-13 16:37:43

<<Thats because people on benefits get council houses and they are big.>>

Really? This kind of attitude actually boils my piss. People 'get' council houses by being on the waiting list and being in housing need. Being unemployed alone just does not cut it, I'm afraid. You need to be overcrowded (where your wait will perhaps be cut to maybe 5 years) or homeless (where you will be housed in a B&B for Christ knows how long before a property comes up) or living in dangerously unsuitable accommodation (and don't think that a bit of a damp problem or a leaking roof will cut it because it won't) before you get within even sniffing distance of a council property. They are not just handed out like sweeties along with your P45.

Grennie Sat 19-Oct-13 16:43:12

Council houses are allocated on need. But the lack of social housing is a real issue. We know from Decent Homes Standard research that the worst housing tends to be in the private rented sector, and that privately rented housing tends to be more expensive than social housing.

This has a negative impact on both those employed and unemployed who rent.

3asAbird Tue 22-Oct-13 13:57:05

Ok last 3months been on 3diffrent incomes

41k gross-hubby earning=£2600 a month

rent priate 3kids, married.

unemployed 3weeks=worked out at £2100 a month.

new job half salary 21 k basic plus commison god knows how this will work on tax credits.

we were struggling before unemployed as cost of living and some debts due to car repairs.

on 21k entitled to £400 month rent and £150 a week tax credits.

so on 21k monthly income we £200 better off being on low pad job.
£300 worse off than being on 41k on paper.

But that does not take into account other costs not included in those figures is

free school ,meal for eldest £40 a month
prescription was £15 other day

need dentist but cant afford it right now as £49 plus need opticians not had eye test n years and old reading glasses are broke.

worry about rising energy bills

we cant afford to buy, cant save and cant get socal housng.

Want to move but cant afford moving costs 1months rent upfront 1000 dep[osit, rise in rent, agents fees, moving van.

Feel pretty trapped at 41k no benefits, 0 and benefits and new salary 21k.

lots people at food banks work.

we still havent had tax credits or housing paid and been month half since he lost his job.Hes not received 1st salary from new job its truly crap.

inflation rising energy, petrol and food costs plus high housing costs make things so hard.

Journey Tue 22-Oct-13 14:33:49

I'm shocked that people think it's acceptable that an unemployed person can be receiving more money than the average wage, which is much less than £40k.

People working have to pay rent or a mortgage. It's funny how people conveniently forget this. All the time we hear that a large percentage of a person's benefit goes to the landlord. The same happens to someone working. Housing has to be paid for.

3asAbird Tue 22-Oct-13 17:40:03

Journey I think the thresholds 32k for tax credits thees days

so anyone on average wage 20-30k would still come some housing and tax credits to top up their wage. so reckon sometimes evens out as 40k net think is approx 34 net.

Its the tax credits that mean employers can pay low wages as state tops up, same with hb although rents have been allowed to get too high which actually costs the state more.

ttosca Sat 26-Oct-13 14:33:09
orwellian Sat 09-Nov-13 11:52:23

I just wanted to clarify some things.

I got the figures from either the DWP or from the various official benefit calculators. The figures are correct.

The problem I have with this situation (and call me a benefit basher if you like, I really couldn't care less) is that it has devalued the work ethic as there is no real reason to work hard (especially in a shitty job that you hate) when you can get less stress and be not much worse off on benefits. It also defeats the point of working hard at Uni or getting into debt since these days you won't necessarily be financially better off.

Also, can people please realise that although housing benefits do go straight to the landlord those in receipt of such benefits get the benefit in kind that this pays for (a roof over their head) and those in work also do not see this part of their salary which also goes straight to the landlord. The difference is that one is getting this benefit in kind courtesy of the taxpayer, the other gets it from their taxed salary which they have worked for.

Another problem with housing benefit is that it means those that are not entitled to such benefits not only have to compete for rental properties with the spending power of those who do get such benefits but they also have to pay for this competition through their taxes, so they are effectively pricing themselves out of an area by being higher rate taxpayers.

I do agree that the main problem is that the main welfare recipients are landlords and big business who need subsidies from the taxpayer (via housing benefit and tax credits) in order to get their profits and it is these subsidies that are the main reason why benefits and income are so grossly distorted. Also this is not capitalism, since real capitalism would let businesses and landlords that cannot survive without subsidy fail. It would also not prop up a rigged housing market. What we have at the moment is neither capitalism or socialism but something in between that is the worst of both ideologies.

My solution would be to divert the money the government currently pays all these private landlords into a mass social house building programme which would create a profitable asset, provide homes to those currently priced out, keep money in the country and let workers keep more of their own salary so there is more to be spent in the wider economy rather than going into the pockets of the already rich landlords. Tax credits should be phased out in return for a raising of the income tax threshold so that low paid workers do not pay tax at all rather than paying tax and then being given it back in the form of benefits.

ttosca Sun 10-Nov-13 01:17:07


Have you ever been on benefits? It's almost impossible to survive. There may be some exceptions where someone has many kids and where their support is increased to take this in to account.

For the majority of people, claiming JSA is most certainly not better than working. You shouldn't be under the impression that there are loads of people out there falsely claiming benefit so that they can sit at home and do nothing instead of work. The DWP itself puts the figure of fraud at less than 1%.

Also, remember that the majority people receiving benefits of one sort of another are in work. We've reached a situation where rents are so high, the cost of living is so high, and wages are so low, that people - ordinary hard working people who work full time - can't afford to cover for the rent and all living costs without some kind of state subsidy in the form of benefits.

What is happening, in effect, is that the government is subsidizing business.

I agree that the tax threshold should be raised. We should also raise the minimum wage to a living wage, so that no one who works full time at a job should have to struggle to survive and pay the rent and bills.

Rent controls and house building are both needed to bring down the ludicrously sky high rent costs which the public have to put up with.

orwellian Sun 10-Nov-13 12:48:57

Ttosca - yes I have been on benefits for a very short period about 15 years ago.

You are right that if you are single or a couple with no children, then life on benefits will be very difficult. However, as soon as children come into the equation then it is much more "lucrative". You can get child tax credits, child benefit, a much better housing benefit/LHA entitlement and very different requirements in regard to seeking work plus lots of satellite benefits and discounts.

This is the aspect of the welfare system that is wrong and needs to be addressed in my opinion. Nobody should be paid more benefits simply because they have had another child and it is wrong for single, low paid taxpayers to be paying to subsidise other peoples children. I believe that children are the parents responsibility and if they want to have lots of children they should do so with pleasure but with their own money, not other taxpayers.

At the moment we have a system that gives people more money for each extra child they have. Not only is this a perverse incentive but it might encourage children to be brought into the world partly because of the financial incentive for a small minority of families (like Baby P and the Philpotts). In my opinion child benefits should be capped at 2 which is widely regarded as the necessary replacement rate and then those that want more can have them but won't get anything extra from the state.

I also think that if a worker cannot afford to live in a certain area without subsidies then propping them up via tax credits/housing benefit does nothing to address the real problem and just distorts the market. There is no law that says those in low pay have a right to live in a certain area and it is common knowledge that people have to move all the time for different reasons if circumstances permit. I have moved at least 5 times in the past few years and on more than one occasion it was because I could not afford the rent and needed to find somewhere I could afford. That is just life. I didn't expect anyone to subsidise me to stay in a particular area.

As I said above, if someone can work part time in a low paid job and take home the same amount of money as someone on £40-£45k then it completely defeats the point of career progression and work ethic. I certainly would not work for £40k in a full time job if I could work part-time and get the same amount, it is a no-brainer.

The whole system is currently not fit for purpose and has been constructed to mainly benefit big business and landlords (that is why they continue to pay large amounts of housing benefit, this is for the benefit of the BTL landlords that would lose out if they cut it, rather than the tenants).

ttosca Sun 10-Nov-13 16:12:11


> This is the aspect of the welfare system that is wrong and needs to be addressed in my opinion. Nobody should be paid more benefits simply because they have had another child and it is wrong for single, low paid taxpayers to be paying to subsidise other peoples children. I believe that children are the parents responsibility and if they want to have lots of children they should do so with pleasure but with their own money, not other taxpayers.

You make the assumption that there are large number of people who have children in order to simply collect more benefits.

First of all, what evidence do you have that this is the case? Because there is a heck of a lot of unfounded assertions going around about benefit claimants. Various polls have shown the public is, on the whole, completely misinformed about the costs and amount of fraud related to social security. Most people are unaware that the majority of social security is spent on pensions.

Secondly, it happens often, especially during a recession, that there are families who find the working parent or parents unemployed. This family has children. Should this family receive the same amount in support as a single adult? Why should they? They lost their job due to a recession and they have kids to feed. That's exactly the sort of thing that social security was invented for.

> In my opinion child benefits should be capped at 2 which is widely regarded as the necessary replacement rate and then those that want more can have them but won't get anything extra from the state.

And sometimes middle-class families with more than 2 children find themselves unemployed or hit with other financial disaster and will need more support for their children. This is absolutely normal and right.

> I also think that if a worker cannot afford to live in a certain area without subsidies then propping them up via tax credits/housing benefit does nothing to address the real problem and just distorts the market.

All markets are 'distorted'. There is no free-market. If we allow rents to increase at ludicrous rates and wages to continue falling, whilst at the same time reducing social security and housing, you'll have a situation where the UK will be even more unequal and even more segregated than it is now. The UK is already one of the most unequal societies in the West, and now has wealth inequality not seen since Edwardian times.

First we need to address the root causes of the problem: poverty. Increase the tax bracket. Increase the minimum wage to a living wage. Build more houses. Enact rent controls. This will go a long way to reducing the cost of the tax-payer towards the social security bill, and it will do so without making thousands of people homeless or starving.

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