A worker on £40k per year is £39 pw better off than his unemployed counterpart.(181 Posts)
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.
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.
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.
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.
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.
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.
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.
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?
Jack it in and go on benefits if it's such a life of Riley.
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.
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!!!!!
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.
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.
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.
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.
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.
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 .
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?!!!
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.
£40k outside of London is enough, oliveoctagon?
Do you have a couple of kids and live and own a house in the South East?
Join the discussion
Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.Register now
Already registered with Mumsnet? Log in to leave your comment or alternatively, sign in with Facebook or Google.
Please login first.