To think Tax Credits *are* benefits?

[Bluemoonrising]

One of my friends was being very derogatory about a mutual friend who gets additional benefits for her son who is seriously disabled. She was saying that 'she didn't know how she could justify receiving benefits, just to raise her children'.

Apparantly she's not on benefits as such as child benefit is different, because everyone with children can get them, and tax credits are not a benefit, it's a 'credit for tax paid'.

Ummm.... no it's not. It's a benefit.

karmabeliever, now please don't be silly if people like philip green paid his employees a living wage - well he wouldn't be able come up with cunning plans to make sure he his wife didn't pay tax on the profit. Why on earth would he want to do somethng like pay a living wage when the government will top up his lower wages?

Gosh or the likes of sainsbury not paying justin king 10 million if they had to pay the cashiers a living wage

please karmabeliever don't talk sense it doesn't suit some fat cats

Sorry ivykaty.

Regardless of whether or not your friend IBU she's a twat. HTH.

Tax credits are a benefit until the point you pay more in tax than you get back.

Tax credits are benefits not tax credits as its possible to get back more than you pay in tax.

Tax credits are benefits. Anyone that actually recieves them and thinks otherwise is just kidding themselves.

Tax credits are means tested and yes are benefits. You dontl have to have ever paid ontopt hte syetme to get them and some who get them will never pay the equivalent tax. Equally Child benefit is soon to be means tested and some disabled "benefits" aren't means tested though.

Mine's even more complicated. I get Incapacity Benefit, and don't pay more in taxes than I receive at the moment.

But it's an insurance payout. I only get it because I paid National Insurance premiums (ie stamp). No different from car insurance or holiday insurance.

Can you not get incapacity benefit if you haven't paid NI then?

I thought you could, but then luckily for me I've never had to claim so I genuinely don't know. I'd be screwed if that's true and I needed it, I only work part time and don't earn enough to pay any tax on my earnings.

If we didn't receive benefits to raise our children then we would starve. It is that simple.
DP is self employed but earns a bare minimum so we have to rely on tax credits, DLA(DS), housing benefit, council tax benefit and child benefit.
It would be lovely if he could earn a 'living' wage to support our family but he isn't skilled enough to earn a few grand a month.

And she is being unreasonable.

You're screwed.

If you haven't paid enough NI, you will be "borne for National Insurance purposes" only, meaning, IIUC, that if you fill in all the horrid forms and go to the horrid medicals, you still get no money but are credited with NI stamp towards your pension.

Some large percentage of those numbers quoted in "sick Britain" Daily Mail articles actually receive no money, they're just borne for NI.

If your household income is low enough, you can apply for what is basically income-related Income Support like the rest of the proles (although I think it may be come with the words "Incapacity Benefit" or its new name "Employment Support Allowance" on the tin, so that you get summoned for Mandatory Job-Training Courses for the Sick rather than Generic Mandatory Job-Training Courses.)

This is all changing anyway. Soon, even if you've paid enough NI, you will only get Incapacity Benefit/ESA for one year anyway. It's to give you an incentive to go back to work and not languish on benefits for the rest of your life. You just need a bit of encouragement, and your eyesight will return, your limbs will regrow, and the degenerative disease that forced you to leave work after struggling on for years will abruptly reverse progress once you've had 12-months on benefits.

But don't panic, there is a very small group of people (I think 25%), usually so disabled they need intensive care from others, who will get IB/ESA till they die improve. Maybe you'll be lucky and be one of them.

The obvious answer to the National Insurance problem is to take out private insurance (which may or may not pay out, depending on the small print).

And guess which industry has been lobbying for these changes to welfare, particularly sickness benefits?

'The impending changes to the State ill-health benefits system will create unique sales opportunities across the entire disability market and we will be launching a concerted effort to harness the potential in these.'
Ward E. Graffam, UnumProvident 2001

Tax credits strictly speaking aren't a benefit otherwise everyone working who has a tax code is effectively getting a benefit. It's just that the tax code reduces the amount you pay as opposed to paying tax on 100% of your income and getting the tax free amount back in line with your PAYE code.

Tax credits were labours long winded way to up the tax free allowance for lower earners with children but by giving money back they secured votes. Psychologically thinking people were getting something rather than paying less tax in the first place.
However, child benefit is definitely a benefit.

Yes they are benefits.

No shame in either situation. What a stupid woman.

tax credits are a benefit,years ago it was called family income supplement or fis for short.

tax credits are benefits. i think they were probably called tax credits to make them sound less like benefits but you don't actually have to have paid tax to get them. it's a bit like "income support" - as i undertand it you don't actually have to have an income at all to get it.

shewasashowgirl that simply isn't true

Tax Credits are a redistributive benefit. Those who are working on a low wage (such as my DH) may pay £2k in tax pa, and receive £12k in Tax Credits. So they have a net gain of £10k overall.

i think my tax credit replaced the married man's tax allowance and is exactly the same amount.

Alemci, it doesn't work like that. It is a co-incidence.

Lougle
I stand corrected.
No need to bang head bit over the top!

I was wrongly referring to working tax credits not child tax credits. Again no need to bang head!

Well, the thing is, there are threads on Tax Credits, discussing their status as a benefit, almost every month, even every fortnight.

Every time, there are a selection of posters who claim that they are just a complicated refund of tax paid.

Every time, people come on to say 'that's not true'.

I get a bit frustrated. It is a simple concept. Some people pay lots of tax because they earn lots of money. Other people pay less tax because they earn less money. The Government gives those people some extra money, and calls it 'tax credits'.

Who dreamt up the name I have no idea, but it was very misguided.

Tax credits are benefits, they come out of the welfare budget. I think they could be far better targetted and that a lot of the time its just the Government bribing people with their own money.

If I was frustrated at a post being repeated I would probably not read it Lougle.

Tax credits = taking tax off you, paying a little bit back and telling you its a benefit (oh and please vote for me).

Here's an idea, simply not take the tax off in the first place?

It doesn't solve the need to top very low incomes up - which IMHO is important - but the top end for tax credits is about 45k!!

Wouldnt stopping it all together for this kind of earner and simply not taking it out of the persons pay packet be as easy? It would of course mean less complex nonsense for HMRC to handle, therefore less people, oh and people wont be grateful to the munificence of the state for their bit of benefits.