£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?

Nancy66 A question..

what did you mean by
"I wish people would remember there are some countries where there is no safety net at all - if you're poor you starve."

?

If the OP thinks of her family as a small business, then I think it seems she is running it 'legally & financially astutely'.

Maybe the next question might be, do a business & a family unit have the same moral obligations to contribute to the state as a whole, as far as they are able?

I think the identity of the OP, and her previous posting history, is a shame since this is an interesting subject.

I will repeat, since everyone has ignored my questions. If it is not acceptable to reduce one's working hours from 50+ hours to 20 hours, if that leaves you claiming benefits, what is acceptable of the following, if any, and why?

a) reducing working hours from 50 hours to 35 - 40 hours?

b) the above, in a different job that commands a lower hourly rate

c) refusing a promotion that would bring in more money but require more hours

I am just trying to understand exactly what the moral reasoning is behind people's outrage (leaving aside any issues about baths or the tone of the OP).

Maybe the next question might be, do a business & a family unit have the same moral obligations to contribute to the state as a whole, as far as they are able?

Perhaps a business has a greater obligation, since:

Typically has more power

Has employees, who follow the directions of the business. Notionally it is accepted that "hard workers" are moral.
It follows therefore, that the business and its instructions to employees must be moral, if this is to be true.

My husband reduced his working hours from full time to part time, the situation was completely different though. We did not ask the state to pay for this decision, we paid less tax although his reducing his hours allowed me to take a promotion so we have made up the difference. He also needed to work less hours so we could care for elderly and unwell parents rather than expecting the state to do it. We were not rubbing our hands in glee at the thought of taking the state for a ride.

For someone who used to be on £34K and not beholden to the benefits system, apart from child benefit & tax credits, I think fully engaging with it will be a bit of a shock tbh.

If you are a private tenant, your landlord may not like it if you claim Housing Benefit (isn't there some problem with insurance?)

If your tenancy ends - perhaps now you are claiming Hb, your landlord will not wish to renew your tenancy if it affects his mortgage- and you need to find a new house to rent, being dependent on Housing Benefit will make it extremely difficult to find a decent landlord who will take you on. You will need to find someone who earns enough to cover their own rent/mortage plus enough to cover yours, who is willing to act as guarantor. Even if you have never been late with a rent payment in your life, this is standard practice.

Perhaps your Housing Benefits office will be understaffed and fail to process your claim correctly, leaving you with no money to pay your rent for months on end.
You will not have enough savings to cover this - if you did you wouldn't be eligible for HB in the first place. Your landlord may move to evict you because of this.

As other posters have mentioned, even things like free dental care, school meals aren't
quite the bonus you may imagine once you factor in your lack of choice.

I think there is generally plenty to deter most people from claiming means-tested benefits unless they have to.

I what annoys me about the OP situation is that they made the decision to reduce hours so they could rely on the welfare state to pick up the rest of the tab. Not for any other reason. Not because 50+ hours was killing him slowly and he wanted to reduce to "normal" full time hours, not because he was unhappy in his job and the only way to get out of it was to move to a job that paid less, not because taking a pay cut would increase his future job prospects, not because the added pressure of a promotion and more hours would negatively impact on his family life. But because they wanted to take advantage of the system so they could both be at home for 5 days of the week together with the children.

I agree MaMoTTat.

(and my children are now officially dirty as I've discovered that exH didn't bath them on Saturday night - ooops)

OK MamoTTaT - so that would suggest that from your POV at least, it is the intention behind the reduction in hours that is the bottom line. Is that not a little to do with the tone of the OP though? Are you saying that had the OP been phrased differently, eg "DH had to reduce his working hours as he's going spare and I can't cope with the kids on my own. Would you believe we get more money? How can that be?!" - you wouldn't have a problem with it?

It is all very well for people to say that it's OK to reduce working hours if it doesn't involve help from the State. But that would have to be a very well paying job indeed, certainly with 4 kids. That pov implies that people with more children have a moral obligation to work even harder and longer hours than your average person. Is that what people are saying? That it's alright to reduce your working hours if you have one or two children, because you still won't be eligible for much in benefits, but if you have more children then it's not alright? I'm not saying that's an unreasonable pov, just trying to get the arguments clear in my head.

If the OP's husband has reduced his hours, but his company still needs the same amount of work completed, and they then employ a single parent, who then stops claiming income support, ceases her dependence on Housing Benefit and also starts to employ a childminder, and there is then a net gain to State, would that make it OK .

If it did, would it be prudent for the State to encourage more 2-parent families to follow the OP's example & opt to work part-time for a few years while they bettered their prospects in life?

The basic problem is that both the tax and benefits systems are too complex. This is to prevent people from seeing what the ACTUALLY do (so that you can tell people it does different things), but has the side effect of making the effect of changes unpredictable - leading to results that may not have been intended.

Half of £34 is £17K for 20 hours a week, I think a single mum with one child woud probably do OK on that without too much help from benefits .

well lots of SAHP's sturggle looking after their kids on their own........not sure I buy that as a reason for the DH reducing his hours to part time (obviously cases such as Riven where SN is involved is different). Yes reduce them from 50+ to "standard" full time hours as he's going spare, but down to 20?????

Nope. Sorry - don't buy it.

Psammyad - I think your point is a good one that demonstrates why it pointless to look at these issues from the position of a single family. Either people have an inherent problem with a family where only one parent works part time, or they don't. The amount that the State does or does not supplement that individual family shouldn't really come into it, because it's all swings and roundabouts.

psammayd - is that with or without the CTC and any other benefits - such as CB, HB that she'd get

as low earners, dh works part time (he has had a heart transplant, and is building up his hours slowly).

this time last year i was offered a full time job. working nights. with dh working days, we had to look into childcare. 4 kids, one would be in childcare full time, other three would be in afterschool and breaskfast clubs.

we worked out, we would be £20 a week better off. which would be fab, but the stress of juggling al that, plus dd2 additional needs (suspected AS), dd4 severe allergies (under consultant, several days in hospital for tests, sees a dietician) and dh hospital appointments, it just wasnt worth the stress.

so am hoping that soon, i can get a twilight evening shift to work around dh hours, to avoid the need for childcare. and allow us to attned all appointments as needed.

we do get some benefit top ups, but really cant wait for the day we can stand alone, and not need those top ups.

gaelicsheep-

a) we have agreed as a society that it is an appropriate expectation for those who can to work up to 40 hours per week (hence the regulations related to working hours)but that more is too much to ask.

b) This is why the tax credit system was introduced. It recognises that people working to support their households to the best of their abilities(in terms of earning power/acceptable hours) can still be in poverty given the level of wages/family size and so can still need assistance.

C)Refer to a and b

MaMoTTaT - my imaginary single mother proves herself indispensible to the company and increases her hours to from 20 to 35pw, thus increasing her annual income from £17K to £29750*.

Per year she receives £547.50 CTC, £749.84 Hb and £1040 CB, totalling £2337.34.

However she pays £7296 total in tax & N.I., so this year she is paying £4958.66 more to teh state than she is receiving.

*this is because on 20hours a week, at £17K a year it was touch and go whether Entitledto said she was earning her keep or not, and she is a good little cog in the machine so she asked for more hours & responsibility, not like the couple next door with the 4 kids who hardly seem to work at all but do spend a lot of time 'studying' and always have enough money for holidays & a flatscreen TV .

So we're not saying then that we all have to work ourselves to the bone to avoid claiming anything from the TC/benefits system. Good - glad we got that clear.

FWIW, I think that in a two parent household someone in the household should be working more or less full time - say at least 30 hours - for the door to be opened to all the benefits listed in the OP, unless there is a good reason like the health of a child/partner. It's not just WTC, HB, CTB, but all the other free stuff that gets my goat. It also annoys me that only people who are renting can afford not to work full time.

The new 24 hour threshold for WTC does at least go some way towards redressing the balance. I still don't blame the OP's family in particular for taking advantage while they can, although it's a shame she sees fit to gloat about it.

Off topic, but how can anyone on £29750 pa be eligible for any HB? I'm already confused by the OP being eligible on £20k. When I was on £18k we were not eligible IIRC. Does it depend on family size? The hypothetical single parent only has one child, so HB how?

where did you get those figures from for the imaginary leap to 35hrs for 29k??

As if I exclude childcare costs (haven't got a clue what those would be for 1 child let alone 3 yet as I'm not quite at the working out childcare arrangements stage for myself) , and put those figures in for me as a single parent of 3 children I would get (according to entitled to)
£283 a year in housing benefit.

and tbh if I had a job paying £29k a year I wouldn't bother claiming my £5.43 a week housing benefit - all that bloody form filling and traipsing back and forward with stuff when they lose your proof of income stuff for £5 a week - no thanks

If you work full time you probably have a company pension so reducing your hours and claiming benefits might be good in the short term but you will be poorer in retirement.
Off Topic This JRF report is interesting looking at taxes and benefits over time

There would be no HB payable to a single child family with an income of £29750 unless they had a very very high rent, and even then not unless transitional rules around the level of rent HB will include in the calculations also apply.(ie unless old rules apply rather than new rules-and I'm talking 1990's not changes due to the spending review).

Local housing allowances have been used in HB calculations in place of the actual rent charged for years. The spending review reduces this imaginary figure even further and IMO is a the most damaging change in the whole fiasco- or at least a closely challenged contender.