£35k tax free for working 20 hours a week....

[BitchyWitchy]

In response to the 'Benefits' thread, I thought I would post this...

We took the decision to reduce DHs hours a few months back as we realised we are better off with him working part time than full time and this is what we get WEEKLY (4 DCs):

Wages (20 hours per week) £209
Housing Benefit £188 (leaving £7 for us to pay)
Council tax benefit £19 (leaving £3 for us to pay
Tax Credits £196
Working tax credits £13
Child benefit £60.50

Thats over £35K tax free! DH's fulltime wage was £34k before tax.

Also get free prescriptions and dental care, discounted kids activities and leisure centre membership. DH is home 5 days a week and I am loving having him around to help out with the DCs and doing stuff with them which he could not do when he worked 50 hours a week! 3 DC are at school so we get quality time with the youngest.

We are also doing free OU degree courses so we can get better paid jobs in a few years.

Wish to bloody god we did this earlier when we were BOTH stressed out working fulltime and brought in LESS that what we get now after childcare.

We shall enjoy this until 2013 I can tell you! I don't give a monkey's what anyone thinks of us. DH is still working after all and who would really continue working fulltime knowing they get all this? It may not be right but while it's on offer, should we refuse it?

DrJones, it isn't. Not in my view anyway. Both are probably morally questionable but legal.

I'd go further and suggest that I think it's more understandable when you're at the bottom of the heap and scraping together every penny.

It isn't what is different is you don't have someone coming on here boasting about what they're doing and taking the piss out of others not as well off.

Scapegoats are far more effective when they (a) are engaged in an activity that is straightforward enough to summarise well in a headline, and (b) can't get away.

i think then that the government needs to radically overhaul the benefit system as this is not right or fair IMO>

I suppose at least your husband is working part time and not like some families who do not bother to work and receive alot more on the social.

Childbearinghips - But there may not be any blame. If the purpose of the policy is to get women to stay at home for nine months it is doing what it is mean to do.

That doesn't sound terribly likely.

I can't see why it's so different in principle from the OP's situation. I am contemplating not working for a period for the sole purpose of increasing my income during that time due to the benefits I will receive.

Presumably going back when the Mat All runs out though? That's fair enough, but not doing it for years on end.

It's the tax free bit that gets me with the OP; that equates to almost 3 grand a month. People only just on higher rate don't get that.

don't forget that it's not 3 grand of benefits - the child benefit (which they'd get anyhow) and salary (which they do pay some tax on) amounts to over 1k "tax free" plus they would have still got some Child Tax credit on his higher wage (I think around £350 a month irrc from my calculations the other night).

If he lost his job and they went onto full benefits they would be £500 worse off a month fwiw.

Still think she's a loon - and I didn't bath my kids tonight

Perhaps scaryteacher. I must admit the prospect of working for £100 a week is not thrilling me atm.

If the figures in the op are correct then obviously this is unsustainable. I don't think the OP herself is necessarily wrong to do it (if indeed it is genuine which is highly questionable), and it is certainly as acceptable as that other method of legally maximising your income, tax avoidance. I realise of course that the preferred euphemism term is tax "planning" nowadays.

The OP has a three-month old baby. Her husband works 20 hours a week. They have four children. She also has/had health problems. This situation is not going to last forever - maybe 5 years. It's just a pity about her attitude.

Childbearinghips - I'd pay for you myself to take the full 9 months off. That is what the benefit is for, to allow parents to stay at home with their babies if they want to.

It's sooo difficult going back to work after five months for heavens sake. We don't have to be miserable all our lives - take the nine months. I certainly don't begrudge it to you.

No-one is to blame, btw. The government is to be congratulated for providing a humane and civilised way of allowing young families to be well-looked after. Nowhere near as generous as in other parts of Europe, but still.

WetAugust had it correct way back.

This situation is fraudulent - the OP and her husband have intentionally deprived themselves of income with the specific intention of claiming benefit instead, this 'lost income' would be treated as 'notional income' which has a box on the tax credits form.

So if this was investigated, it would be found to be fraudulent. People saying it's ok because you are entitled to it are simply wrong!

Interesting - would cutting your salary to drop out of HRT to receive child benefit be treated the same?

Yup mole1.

But proving is another matter eg:

Employer Yes Ms Investigator because of our financial and strategic position at the time we offered him [and perhaps other employees] this package. He was happy to accept.

What now ?

They can ask him how he thougt he was going to pay the rent. He can think of [fairly] good answers to this.

Round and round we go.

Have only read short bit of thread but
YABU

benfits are not a life style choice

they are a safety net for those who need

you should be ashamed

Yes, I wonder how many successful investigations there have been based on this 'notional income'. It's all a bit difficult to pin down.

But the basic principle is that this is not how the benefits system was set up to work, even under Labour!

Quite right, you should be ashamed.

Have come back to this and the figures really don't add up.

When I was living in social housing I applied for HB and CTB.I was earning less (quite a bit less) than OP claims her DH is earning, got HB, didn't qualify for CTB.

And I'm not sure how HB is paid if you have a mortgage/rent privately.

I find it a bit weird someone who has been working in a high powered job for much of their adult life and earning a reasonable salary would be living in rented accom too (private sector not very secure)but I guess it's just about possible.

Plus, it's true that you can give tax credit people an estimate of your income but you need to give actual figures to get your award finalised otherwise they stop your payments. And if you have underestimated your income you'll end up with a big overpayment.

Just doesn't add up.

"This situation is fraudulent - the OP and her husband have intentionally deprived themselves of income with the specific intention of claiming benefit instead, this 'lost income' would be treated as 'notional income' which has a box on the tax credits form."

I think the part about intentionally depriving yourself of income, is meant to cover things like (e.g.) taking a wage of £10K when other workers in the same job are paid £25K, in order to be eligible for a lower rate of tax. If this was discovered, you could then be taxed as if you were being paid £25K.

If the OP's husband is genuinely working & getting paid for fewer hours, I don't think it actually (legally) counts that they have intentionally deprived themselves of income, even if that is what they have doen in one sense.

Like DrJones, I don't see that this is morally any different from tax avoidance.

If you think tax avoidance is morally acceptable, then you should think the OP is morally acceptable - both are simply maximising the unintended consequences of the system (as was explained to me on a previous thread )

If you think the OP is morally wrong, then you should also think tax avaidance is morally wrong.

If one was to think that the OP was morally wrong but that tax avoidance was acceptable, I think that would be a failure of logic.

On a separate note: If the OP originally faced a prospect of being long term dependent on benefits (e.g. low waged with no prospect of promotion & likely to claim tax credits & HB for the foreseeable future) but could follow their plan to go part-time for a year or two, do the OU courses & then move into jobs that paid well enough that they didn't need to claim any benefits in the future, would that make it morally acceptable? As the ultimate intention would then be to cost the state less over the course of their lives?

Has anyone said that this is morally unacceptable and Tax Avoidance is ok?

Mole1 - This IS how the system was set up to work. It may or may not be what it was set up FOR.

"I find it a bit weird someone who has been working in a high powered job for much of their adult life and earning a reasonable salary would be living in rented accom too (private sector not very secure)but I guess it's just about possible."

I also find it hard to believe they would not have either assets or savings which would probably disqualify them from many of the benefits they claim they would be entitled to - though I suppose its possible they could live on their savings for a few months till they were under the limit.

How is this any different from Tax avoidance (legal)? Why is maximising your benefit less socially acceptable than paying as little tax as you can.

It isn't any different and we generally don't think much of those who avoid their obligations as much as those who milk the system do we ?

Has anyone said that this is morally unacceptable and Tax Avoidance is ok?

How many responses, I wonder, would this AIBU get:

to have run my small business legally and financially astutely ?

I think there would be very few responses with several .

psammyad I am in a good job, hrt tax payer blah blah blah but am in rented accomodation. We sold up to pay for the care of elderly relatives and now we are glad to be out of the whole property market tbh.

I do think tax avoidance is morally wrong as well.