To be shocked at how much we would get in tax credits if I did not work

[peppapighastakenovermylife]

I sense this thread might go wrong - I do not mean it to. I am not saying people should not receive the money, nor that they should be forced into work. I am just shocked at how much we would get!

Bit of background. My job is at risk so looking at worst case I wanted to see what we would be entitled to if I was made redundant. I expected it to be very very little.

I put our details into the tax credits website and based on me staying at home with the DC's and DH continuing to work full time we would get £600 a month . That is not considering any other benefits which we might be entitled to (DH earns around 18k)

Ok so that is not a huge amount of money to live on but after childcare costs that is more than I have left over after working full time in a well paid job!

I fully admit I enjoy my job and working. I also get more out of it than salary - pension, fulfillment, career advancement. Also, childcare costs are a relatively short term thing - in four years once all DC are in school they will come down considerably (they are very high at £1400 a month now).

I have no intention of leaving my job but it does make me wonder why I am missing my DC's, running round like a mad fool organising childcare and picks ups and am absolutely exhausted and dont have much time for myself when I am in the short term worse off financially.

It is nice to know there is the safety net though I guess although I now understand why some people make it a choice not to work (and I mean some not everyone who doesnt work, stays at home etc). I genuinely never expected it to be that much. I guess it will also be at risk with the current government.

YANBU

Wages therefore need to go up and/or childcare costs need to go down in order to make working worthwhile.

Now you will get a deluge of posts saying how benefits and credits should be cut in order to drive people back into (non existent) jobs. At some point a flatscreen TV will be mentioned. I wanted to say my bit first.

YANBU. I think the government has made it too easy for people not to work - and I say this as a staunch labour (old labour) voter!

YANBU to be surprised. I did a similar exercise for someone I know and was amazed at the sums of money available if you fall into the right income brackets. The assumption on which it seems the entire welfare state is built is a rather sweet old-fashioned one i.e. that given the choice between working for £1 and doing nothing for £1 or even £1.10, the average decent person would always choose work. This is not a reliable assumption and stretch that to £1.20 for doing nothing and the person who still chooses to work is a rare creature indeed.

I agree, it's crazy! If I earned 19k then with tax credits I'd get double this!

YANBU. We did the same exercise, but based it on me earning far less than I do at the moment in a p/t job working at the weekend or evening to allow me to stay at home with the DCs. It actually made financial sense for me to give up my job and take a lesser paid job (and consequently pay less tax into the economy).

Utter madness.

Tethersend - I really hope it doesnt get into a flatscreen tv / unemployed should live on bread and water alone type thing but unfortunately it probably will though. Really not my aim.

Wages up / childcare down. Not easy really. I have a good job (30k). DH is doing his best. Childcare - is fantastic and I couldnt justify working if it was sub standard. I keep telling myself it is short term and we are going to feel rather rich in a few years time!

I guess its the age old argument of how you make sure people who genuinely need benefits short term are supported but people cannot see them as an entitlement. How do you make sure someone in my position who loses their job but wants to work has enough money without making benefits an attractive prospect. I also support the idea of enabling parents who want to stay at home with their children have that option - its just shocking that there is little difference in working full time and I have an above average wage!

Guess it depends on whether you have a career where you could pick it up where you left off.

Maisie - I hadn't thought about the tax element. Instead of me paying the goverment £600 ish in Tax and NI I would be taking £600 leading to an overal deficit of £1200

They need the money for all those flat screen TVs though

Well I get no where near that amount a month on about the same money ...so fuck knows how other people do... I only have one Ds at home though

Usual - that seems to be key. We have 3 children, so would get far more on that basis although as Peppa says, my giving up the job I have would cause a deficit.

WHEN MY DH WAS MADE REDUNDANT i WAS TRULY SHOCKED AT HOW MUCH WE COULD CLAIM *WE NEVER DID GET THE LOT AS DH STARTED WORK 6 WEEKS LATER AND THEY WERE TOO LATE SO i JUST SAID STUFF IT

oh crap sorry for shouting

meant to say if we had calimed everything we would have got more than he earned and way more than nat. average wage

madness

but how can wages go up without childcare also going up or care ratios going down as people working to care for children would also need higher wages...?

it's a catch 22. i don't know the answer

When my dp was made redundant we couldn't claim nowt because he had earnt too much the previous year . we had to wait till the next tax year ..good fun that was ...not

Usual - Yes I put the details in for 3 DC (39 weeks pregnant with DC3 and not the time to be threatened with redundancy really)

Bronze - I hadnt added in JSA. Guess I would get that too if I was actually job seeking.

Ilovemydog - that is one of the key things that makes me think I am better off working in the long run. I would not just be able to pick it up after 8 years at home or whatever. I would also be on a considerably higher salary when they are in school than if I stayed at home.

So in the long term I am not better off - but recognising that is hard.

And I dont have a flat screen TV (much to DH's disgust) - would I get a voucher?

My friend got divorced a few years ago, and having never claimed anything in the way of benefits was clueless as to what she would receive. She found that by reducing her hours at work she could claim all sorts of things - as she says now, she was never as well off as she was then. When she met her now husband, she said she did have to think twice about marrying him because she was going to lose some much on benefits.

I don't want flat screens to be mentioned on here either, but it's an odd situation for anyone to find themselves in. I would imagine she's not alone.

AS you say it's good to know there is a safety net. As you rightly pointed out there are lots of good reasons to work. Makes a career break look tempting if your employer does it.

That's just is drosophilia - am a bit overwhelmed I think at DC3 coming and wondering just how I am going to manage working full time with DS going to school and the others to nursery and me just generally running round like a mad thing. Not having to work seems tempting, not to mention it would remove my working mum guilt!

At least I am not so worried about being made redundant now though

Maisie - now tempted to calculate how much I would get if I got rid of DH

Well i have 3 dc's currently looking for work living the high live on benefits eh? think i should maybe phone up and complain cause i can't make ends meet.

WOW! I had no idea it was that much either!

YANBU to be surprised!

It's only the childcare you pay that gives you that result though, peppapightoml.

The way tax credits work is to give a withdrawl rate of 39% after the threshold of £6040. So, in effect, you are losing 70p for every £1 you earn in tax credits, after the first £6040 of earnings.

In other words, for every extra £1 you earn, you are, in real terms, £0.30 better off than if you were at home not earning. Not much, but that means that if you earn an extra £1000, you are £300 better off than a family with the same constitution who earn £1000 less, but get tax credits.

However, the real difficulty is for those families who either

a) have more than one child in childcare, but earn a reasonable salary, which means they get no help with those childcare costs, and most of their wage is eaten up by childcare

or

b) also qualify for housing benefit/council tax benefit, because the marginal rate of withdrawl (i.e the real-terms loss of income) per £1 of extra earnings rises to something ridiculous like 90%. i.e If they earn an extra £1000 per year, they are only £100 better off. Now, if they are on minimum wage, they will have had to work roughly 172 hours per year extra, or 3.3 hours per week. Who is likely to want to work 3.3 hours per week extra for £1.92? In other words, they end up working for a rate (in real-terms) of £0.58 per hour???

I stopped working when I had DD2, mainly because my DD1 was dx with SN, and she wouldn't be able to access regular childcare. But I was shocked that as a RN, earning £11 per hour, my effective rate of pay before childcare costs, by the time loss of tax credits, etc., and fuel costs, was factored in, was £1.26 per hour. That was without factoring in the travelling time to work.

YANBU - it is ludicrous really, isn't it, that people can be better off by working less!!!

However, you hit the nail on the head with your point about work being more than the immediate income - you have the long term security of a pension, plus you are keeping yourself in the job market, plus you're getting the intellectual and social benefits of working.

Also - change is on its way - I doubt we'll see people so generously rewarded for not working, or for working only up to 16 hours a week for much longer. The system is unsustainable.

Can't win if you work..can't win if you don't work on MN ..I give up