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!

@Redwineandroses - completely understand your frustration / disappointment that after working and studying so hard, you are not tangibly better off. I really admire you for being a single parent (I was raised by a single parent, and know only too well how tough it is), and for continuing to study and develop yourself and apply for promotions. Although I completely understand the frustration, please keep doing this! It will eventually pay off. A huge hug, and a pat on the back, to you xx

Thank you. My ex husband was such a financially abusive bastard I vowed never to rely on a man again for finances.

I'm in exactly the same position as you, so I get it. I have teenage children and this is the first year we haven't qualified for tax credits.

But, I used to work in debt collection and I remember the biggest drop in household income came from children growing up and families losing benefits then, with no income to make up the shortfall.

Both you & I don't have to face that in a few years.

I worked term time whilst they were primary age and the first couple of years into secondary, during which I was also studying to gain qualifications, and now they're teens I've gone to full term working. I'm not sure you read my op right?

I hear you! That's exactly the same thing that motivated me and still does 😀. It's not easy doing all the juggling and budgeting but keep that drive, it's worth it.

I'm not being subsidised with teenage children as I'm working full time 🤷🏼‍♀️

This is really hard in the short-term but just remember that you've got a bigger plan. Keep looking for how you can earn more for working the same number of hours. A better paid job is the next step - not increasing your hours...that's only if you're at emergency point and need it to get by or want to purchase something big.

I took the same path as you in building myself up again after having children and divorcing a husband. It takes time but keep going and take every opportunity that comes your way. It sounds like this is what you've been doing so a massive well done and you should take great pride in your independence and work ethic. :)

Yes. There's definitely a tipping point for single parents on the old tax credits where it really doesn't pay to increase your hours, especially if you factor in commute costs, extra childcare costs etc. I was in this situation once and worked out I'd have been marginally worse off working full time. Definitely worthwhile in a situation like yours though OP where you're not just increasing your hours, you're actually increasing your earning power and going for promotions. Mine are teens and I'm now self employed and working crazy hours but it's so worth it to be fully financially independent.

Thank you.

I think this thread has giving me the reassurance I needed to know I have done the right thing. I just have to look at it like I've used the benefit system for what it was intended for: to help during a period of financial hardship and now I'm better off in my job and my dc are older, I no longer need that financial help. Let's face it, without it I would have either been working term time and struggling on 14 k a year so I could look after my dc, or work full time and pay expensive childcare. So during that time I was able to still work and still look after my dc without paying childcare. So I am better off now because I can earn all my money myself, even if its not as much as I'd like, and I don't have to worry about it being taken away.

Plus "the fear" of overpayment is gone. Oh that dreaded April fear of "sorry we've accidentally paid you too much..."

Short term you may ask yourself if it was worth it. Long term you will look back and realise you have benefited so much.
No overpayment risk.
Freedom from benefit trap.
Learning new transferable skills.
Variety during your day.
Role model to your DC.
Better pension.

I know what you mean tbh I would feel a bit hard done by too.
You have worked and studied hard, gained promotion , work lots of extra hours and at the end of the month your net income hasn't really increased.
It is dispiriting but as you and others acknowledge its about the long game. In the end you will be better off, relying on your own resources , future proofing for when DC are older and moving up career ladder. But right now it's does suck to have achieved all that and be barely any better off at the end of the month.
So totally get why some decide not to bother and spend more time with kids especially if a single parent with no childcare support.
Congratulations on your promotion it will work out in the long run but I hear your pain!

Op isn’t wanting to be subsidised just pointing out how it’s easy to see how some people reject extra hours and pay rises and promotions because you can be working many more hours, more responsibilities but be the same take home as when you worked less.

The balance isn’t right, it shouldn’t be equal pay for part time hours because it’s being topped up. Op should be able to work more get a promotion and feel that extra in her pocket to get someone she couldn’t have before not still be scrambling whilst working even harder.

I know what you mean. I get Uc and whilst I’ve taken on more hours and increased my wage by a good bit over the last few years since my divorce (I now work full time) I don’t think I’m better off day to day. I recently got a new job which was £5k more a year. Really though by the time you pay tax/ni/ pension then Uc take back 55p on the £1 of whatever is left then I get an extra £40 a week which balances out the additional cost of petrol to get there. As a bit further away.

It will be better in the long term though. It’s also given my self esteem a boost, much less of a pushover with my ex too.

Yes , all of this.

I don't know what the answer is because as people have said, they can't lower the benefit people get because they need it to survive but at the same time there's so real incentive to progress either.

It's a catch 22

It's to do with the tapering, that's what they could adjust to make it more beneficial to work/earn more sooner. A bigger offset/allowance and more increments of working 16/20/25/30/35 hours etc.

You could have a variable work allowance or taper depending on hours worked. Once you take into account tax/ni/ pension then the taper then really you take home 20-25p per pound earned. I think if you were working minimum wage there isn’t a lot of incentive to take on extra shifts if you’re going to incur travel costs etc. Different if you’re more career orientated and are taking a short term hit for long term gain.

@bloodyeverlastinghell I think the issue is for some people the cost of working is so high for them due to commute costs/travel care they actually can't afford to take the hit and work more hours because they are worse off each month and if you are living hand to mouth what can you feasibly do?

The bus fares where I live are extortionate.

@RandomMess Its true. I’ve gone back to a professional job but I cleaned hotels last year. Roughly travel costs were a tenner a day so doing an extra shift Id be up a fiver for six hours work plus an hours commute. I have worked in a hotel where they send you home early when it’s quiet so you could turn up at 9 finish at 12 and not earn enough to cover travel costs.

The problem is that it should not be an option to work or not to work if you are not disabled.

I don’t think it’s an option not to work but if you have primary school aged children you’re required to do 25 hours @ min wage to meet your work commitments. The way the system is set up unless you earn substantially more than min wage there’s very little incentive to increase your hours beyond that as you can be worse off overall.

10 years ago when my DC were 6 and 1, after running two cars required for work, tax etc, we earned below the benefits cap of £26k but above the threshold for what was child tax credits. No help. I kept going for the reasons on this thread. My view was our income would go up, whereas heading down the 'better off on benefits' route long term, income would likely suffer once DC got older. We've had a few pay rises, change of jobs, DC are now 16 and 11 and we are a lot more comfortable now. Pension is okay (not huge but not state only).

I get the view that is doesn't seem worth it on a month by month basis, but on a decade by decade basis it definitely is. I kept reminding myself of that at the time 💯

I know what you mean op. I am expecting my 2nd child. Not a big earner. Earn 23k, when I go back to work I'll be on the same but also studying a degree through work which after 3 years will be starting salary of 33k. Our first born is disabled and we receive dla for him.
My partner makes 1500 a month. We did a benefits calculator and IF he didn't work when i return, we'd get just under £1000 UC and a stay at home parent. So work does pay in the sense of, We'd have 500 more take home and pension contributions but by the time we've paid for full time childcare, my partner will work for about 400 a month and our child will be looked after by others. So our options 1000UC and a SAHD or 1500 earnings wiped out. We will work and think of the bigger picture but it's very easy to see why people don't, especially with younger kids and the cost of care. We will be at a financial loss to work... BUT for a short few years and that's what we will be telling ourselves.
Well done you for all you've achieved. I hope your teenagers feel proud of you

How very black and white of you.

The problem with that is proving you are disabled/not able to work.
Many people get found "fit to work" that absolutely are not.