Working more really doesn't always pay does it :(

[Redwineandroses]

Just a little whinge really. I was working 30 hours a week term time, as I'm a single parent and it fit around looking after my dc. Now they're older (teens) I thought I'll go for a job promotion at work.

I've been claiming tax credits to top up my income and when I got the promotion it was 37 hours per week, 42 weeks a year (as opposed to 39 weeks term time.) Tax credits reduced but the extra money I was earning evened out.

Then the opportunity for a further promotion came up, which is a full time position as in not term time at all, still 37 hours a week. So I went for it as it is a strp up and got it which meant my income went up and tax credits reduced significantly. So this month, after tax, NI and pension contributions I'm actually only just a tiny little bit better off.

The point I'm making is, I am now only just a little better off now working full time doing 7 more hours a week than I was doing 7 hours less a week and working term time 😐 Plus that's based on a lower april - march 22/23 estimated earnings (due to me earning less until I got my promotion/s in August/September)in comparison to what 23/24 will be, where I'll most likely loose all TC.

Nothing I can do and really just having a general moan because I was hoping to be better off as I'm struggling (like everyone), especially as I don't have a partner to get that second income for the house.

Just for a general guidance, I was earning around £14,500 for 30 hours term time which was topped up in TC. When I got the first promotion I estimated my earnings between April - March would be around £19,000 as it covered both jobs during that period. Then the further promotion I estimated between that period I'd earn around £22,500 which is when the TC reduced significantly. It is annoying having to estimated based on 3 different periods of working income!

Next April I can just give my current jobs annual amount (£28,000) without having to work it out/divide it up as I don't plan on changing jobs!

Not saying I shouldn't work for the income etc but you can see why people don't take on extra hours/go for job promotions!

Due to

Yeah I have no savings, I haven't been on holiday for over 10 years, I had to buy my second hand car on credit card (0%) when my old one literally died as I couldn't afford to buy one otherwise and yeah, apart from the odd lick of paint, no major decoration. But I'm not earning anymore now than in my previous position on TC so it'll stay having none of things for quite some time yet. I'll still be living month to month unfortunately.

This 👆

I found it to be a huge relief when I was finally warning over the TC threshold, and didn't have to rely on them any more. Especially the prospect of incurring one of their stupid overpayments which they managed to make despite me being really careful with my claim and calculating my expected earnings almost to the penny. Once I'd paid that back and my annual review was done and dusted for the final time it was a good feeling.

Everytime dh got a raise suddenly we owed huge amounts back tax credits was is crazy. Somehow we got a 2k over payment. Got it deferred due to hardship but then the next year it was 4k because they kept over paying rather than a correction but not paying back. Then when they finally where taking it they took half per week obviously as over a set amount but means they gave us like £20 a week leaving a huge overpayment again but if you don’t claim anymore they wanted the full lump.

I remember one year after tax ni etc his raise was like £50 a month but we lost more than that from tax credits we spent many a year worse off every time he got even a 1k a year raise because it just seemed to drop off. I’ve never worked out how they manage to give such huge overpayments either when you keep them updated. I’m yet to meet someone in person who hasn’t been hit with a massive overpayment within 5 years of tax credits ending when they suddenly claim they found a mess up where YOU definitely did not tell them. Even though you did.

Yes, I'm significantly financially worse off after getting a better job and no longer receiving benefits, but now I don't have to worry about my income being reduced arbitrarily, apart from the worry about child maintenance disappearing with no recourse, that is. My goal is to now earn enough so that portion of our family income isn't depended on. I'd like to stand on my own two feet financially in all ways possible!

Well you are no longer being subsidied by other people
because you don’t need to be.

This. And also you're only working 7 hours more a week and three more weeks a year, which isn't a lot more so you're not earning a lot more. You only earn a lot more if you make a significant change, e.g. move to a new role at a new company. Working a few more hours won't make much difference, but it's a good thing to have done so you're not relying on subsidies when you don't need to.

But you don't have to rely on the benefits which could be reduced/taken away at the government's whim.

It's not 3 weeks extra per year, it's going from term time, so 39 weeks per year with 13 weeks of holidays (but paid for 5 and a half weeks of them) to working full time, as in 52 weeks per year with standard holiday entitlement of 28 days. So working an extra 7 or 8 weeks a year.

OP, I imagine that’s tough.

Im not a benefit basher (the bill would be so much less if folk were paid fairly), nor have I ever claimed BUT I’d be disappointed if I got a significant pay increase that kept me running in the same spot.

I suppose like if my rise was cancelled out by a tax increase?

Does it help to reframe it that you have had an increase that has replaced the TC (as opposed to TC being ‘lost’).

congratulations to you, your hard work had paid off, make sure you treat yourself.

I hope next years increase will equal more actual income.

Well done OP

I'd love to hear what job you're doing/how you got there.

On the bright side you aren't dependent on the credits any more. And hopefully will also be making pension contributions and so will your employer, so while that doesn't show in your pay packet it will put you in a much better position financially in the long run. So well done on the promotions!!

(and for avoidance of doubt, I don't have a problem with people needing to claim credits, but I found it incredibly stressful during the year I needed to claim them after my husband left and I wouldn't wish dependency on that system on anyone,,!)

It sort of depends what angle you look at it from - you aren't much better off working f/t because your children are older and you are now able to. Or you weren't much worse off because you were unable to work f/t because your children were young.

Not sure if I've explained that well but people moan about the restrictions of working around children, especially if you are single but your situation shows that actually there is financial help to bring your standard of living up to what it would be if you were able to work more hours.

The system is broken in many ways but for you it's given you equivalent to a full time salary whilst working p/t for a number of years.

Thank you. It is frustrating that I'm working an extra 7/8 weeks a year and my hours are now 8 till 4 as opposed to 6 hour days whilst the kids were at school, and still be running on the same spot as you put it.

I think I will end up getting a weekend job on top of my full time work to earn more as I'm literally running month to month.

I've been paying into the company pension for 8 years now but yes the contributions have risen

I used every opportunity I could to gain experience in the company and took advantage of their training/qualification schemes which got me NVQs and other qualifications.

Unfortunately this is the case for lots of working parents, even those who do not get TC find that they are working just to pay extortionate childcare fees. Although it seems pointless at the time in the long term working is the better option for your career and your financial security.

Would you qualify for UC if you increased your pension contributions and built that up for a few years?
You could drop them down when your children get older but still have increased your pension a bit. (Also pay less tax)

Yes I can see why people who don't think of the bigger picture choose to work less and don't go for promotions, but I don't think it's right to choose to do this. I think the system needs an overhaul so that people can't choose to do this.

Agreed.
Op you sound really determined and your drive will serve you well. Focus on the bigger picture - a healthier pension, you aren't dependent, your CV is growing

I know so many women who stay stationary because they don't want to increase hours and lose benefits, it's such a frustrating thing to watch them do to themselves.

The tapering really needs to be looked at so people are better off working more.

The whole cost of working is just not considered - suitable clothing, commuting costs, less time to eat more cheaply etc.

It can vary massively, those living rurally with extortionate public transport costs in particular must really struggle.

Why on earth should other people subsides you to not work for a further 7 or 8 weeks a year when you have children?

ia there a reason you need to only work term time now??

youre not being penalised - you’re not being giving a benefit anymore.

i am a MASSIVE supporter of the welfare state - but it’s approaches like this are why it’s in such trouble.

people with disabled children in genuine need can’t get
adequate support - and you’re upset because you will no longer be supported to have an additional 7 to 8 weeks holidays a year with teenage children.

Not that you shouldn’t get a second job, but before you do this can you speak to your employer to explain the situation in case you can get a discretionary spine point or something?

Have you also added in the cost of working for that additional time (travel/lunch etc).

This will pay off med/long term but in the short term it is frustrating esp with COLC.

That should say why should you be subsidised when you have teenage children…

@Cluelessdiyer I'm not sure 100% that is what OP is saying is it? She isn't complaining about her own situation, but worrying the way things are set up doesnt incentivise enough people to do the "right" thing (ie get a job with more hours and come off benefit dependency).

Even the strongest work ethic and sense of civic duty is going to ve challenged if you are not able to clearly see why you are better off working longer hours.

OP says has gone for the promotion and got the hours and cut back her benefits - point is that it is a very marginal gain now and you need some foresight to see how it pays off in future. The incentive is quite low to do something that has a big downside now (lost time with family) and may only appear beneficial in a distant future which probably seems so bleak you probably can't bear to think about anyway.