Tax Credits = benefit-dependent society?

OK, using a wage of £26328 for the man:

ctc/wtc337.12
housing benefit75.94
child benefit47.1
net wage 386.29
ca 53.90
Woman net wage 92.80
total 993.15
childcare costs 300
NET INCOME 693.15
546.45

Woman not working
ctc/wtc133.97
housing benefit66.80
child benefit47.1
net wage 386.29
ca 53.90
total 688.06
childcare costs 0
NET INCOME 688.06

NET INCREASE FOR FAMILY £5.09 pw
COST TO TAXPAYER £305.09

How can it be a good thing for children to go to childcare for 18 hours per week, and the taxpayer to foot an extra £305.09 each week, when the family in question only gains £5.09 for it????

en.wikipedia.org/wiki/Income_in_the_United_Kingdom

UK Region Mean Income % earning over £ 50,000 % of households receiving income related benefits
North East England £19,127 2.78 % 31 %
North West England £20,483 3.99 % 27%
Yorkshire £20,247 3.83 % 24%
East Midlands £20,868 4.34 % 21 %
West Midlands £20,530 3.94% 25%
East of England £24,401 6.83% 20%
London £29,947 9.49% 24%
South East England £26,328 8.50% 16%
South West England £20,954 4.47% 19%
Wales £19,007 3.05% 24%
Scotland £20,895 4.32% 26%
Northern Ireland £19,705 3.22% 26%

Why are you so against single parents working part time foureleven?

As a lone parent tax credits mean we can survive. I work 20 hours a week and have a 1yo and 3yo in nursery.

foureleven Working full time isn't practical, I need to juggle my time and have free time in the week to take the dc's to doctors apts when they are ill, which in the winter months is pretty often. There's no way an employer would have me coming in late / leaving early if I was on 9-5 mon - fri. I will be able to work more hours when the dc's are older and at infant school.

I was working before I split up with XP and so I have no option but to continue, AFAIK I wouldn't get a penny if I was to stop work, just child benefit but that won't pay the bills.

I find tax credits very confusing as I had ds in 1995, and I went back to work when he was 6 months old. He went to nursery 3 days a week, I had him at home for 2 days, and we paid. There was no subsidy.

Mumblechum - an AWFUL lot of people earn less the 40k.

Imsonottelling - I'm gonna file for divorce tomorrow. That is clearly where I am going wrong. I reckon DH must be hiding the other £25000 and I am being taken for a fool

Vinegartits and Janos, when I was a single mum I relied on them too, I worked full time and tax credits paid for about 70% of my childcare. Great, thats what its for. What i dont understand is why if people choose to work part time (including single mums, Its not your choice to be single maybe but its not a disability) or not at all... they shouldnt in my mind get tax credits- another benefit maybe so that children arent living in poverty of course.

Or maybe it could be claimed for a period when one becomes a single mum to give time to find ones feet after separating. But lots of women once becoming single go on and on for years and years choosing to work part time and relying on tax credits to top up their wages. I dont think it is a right for someone to not work every hour they can to support their own family themsleves if they are able to.

Before all this tax credits business if a family couldnt survive on one wage then both parents worked. I thought tax credits were brought in to encourage people to go back to work and be able to get help with childcare costs... instead because of the way they work it actually makes it easier for one parent to work part time or not at all in many cases.

Lou; I see your point completely, no one would argue that your family shouldnt get some help. or that you should be made to work, one of your children is disabled so its not going to be easy to find the care that they need, and your DH is on a very low salary. Its not an 'average' situation.

Oh and the avaerage low earning less than 40k??? What? the average salary is 25k no?

I didn't 'take on' my job because of tax credits - I was already doing it, then my circumcstances changed.

In fact, I was earning a lot more pre DS. Whole other thread there though..

lou I think you'll find that is impossible as men in the SE do not earn less than £40K.

Is it possible that you have got confused and actually live oop north or something? You may have got carried away watching eastenders or something.

I do wonder if tax credits are New Labour's version of Thatcher's buy your own council house which won over many working class voters.

I just think there is something very wrong in a society when those earning above an average wage need state handouts to survive.

Mumblechum, sorry. To clarify, that 'case study' is actually my family. The man is my DH. We live in Hampshire. South East England.

Leningrad - it's as Minthumbug says: If employers pay above the minimum wage (in some cases) they are forced to pass on the costs of that to the pricing of the goods they produce, which, in some cases, prices them beyond what the market will stand. So Tax Credits is a business subsidy.

(Can't believe I'm arguing this, as a leftie!)

Now, my take on Labour is that they felt they inherited a situation in which Britain was effectively positioned as a global, not national market, and a lot of their economic stuff was determined by this interpretation. The rights and wrongs of this are a bit beyond my skills. And it's possibly too early to give a judgment on that.

So I also see tax credits as a sneaky national subsidy, subsidising goods for a global market ... .

So, wrt increase gap between rich and poor, decreased social mobility, I see that as a global phenomenon, partly brought about by a super-rich class. And studies have shown Britain has not done badly relative to other first world countries. It looks as though Labour had to do a lot of work just to slow that disparity down. Persoanlly, I'd have liked them to do more, but when you consider our major industry now appears to be the finance sector ... they're a bit hamstrung. And goodness knows what it'll be like under a non-progressive government.

MintHumbug - I guess I just disagree re. benefit dependency =Labour dependency. Agree it's all going to look a bit ... peanuts in the next few stormy years. But I know I'd rather have a progressive government, committed to making things as painless as possible for the most vulnerable, rather than a government that doesn't have that basic commitment at its heart.

And I think that a lot of what Labour proposes makes sense as regards positioning Britain globally. They won't do anything insane to the financial market (however much as a leftie I cringe at that), they will support the national market. But as you say, that is pig in a poke time.

"Lou, can you run that formula again but using a more realistic salary for the man? In the South East, I doubt there are many average Joes earning less than £40k pa. "

What a bizarre comment.

There are stacks and stack of "average joes" in the SE earning much much less than that.

I'm genuinely by that statement.

sorry meant to say so I can easily see why people might not want to get out a this state inflicted trap

I believe the point of tax credits was to allow people on lower incomes to pay less tax without giving a tax break to people on much higher incomes.

ie. If the tax threshold was raised to 10k then those earning £100k per year would also get this extra cash as they would also start paying tax at 10k.

Whether the administration costs associated with the system negate the benefits, well that's another discussion altogether.

"I think that tax credits do encourage dependancy on a Labour Government for many families."

of course they do
we are currently on benefits (til tomorrow yay) and we will be getting less money with dhs new wage even though its a reasonable middle of the road wage. Enough to live on (just- but I aint called scrooge by my mates for nothin)

animula I totally agree!

In addition to making it financially viable for people to get back into the workplace (and all the benefits that provides, self esteem, self progression, training, education etc} it also goes someway toward ending the situation where children grow up in families where no one has ever worked and the limitations that places on the child's future.

It's not there yet, it does need tinkering with (childcare costs are still a big issue, but that's not being ignored, free nursery places etc) but it's a great principle.

I think tax credits used as benefits and tax credits used to top up wages need to be completely seperated.

mumble I think you will find there are awful lots of main wage earners only earning between £17k-£26k in the SE - there are about 800 of the them up the road from me, all the shop staff etc etc etc

Lou, can you run that formula again but using a more realistic salary for the man? In the South East, I doubt there are many average Joes earning less than £40k pa.