To be shocked about tax credits....

[butterflyroom]

I earn slightly too much to receive tax credits following government changes. My colleague who earns less than me, told me that she receives working tax credits AND child tax credits of around £80 per week. I am shocked at how much this totals monthly!

AIBU to be shocked and to wonder why I work hard and full time to earn more when it's probably not financially that beneficial to do so?

Hard hat at the ready.......

Sorry to hear that smelly. That is what I am worried about too. Not heard yet.

To use a simplified analogy, common sense tells us that if person A works 4 days a week, and person B (same job, same living costs and number of kids as person A ) works 2 days a week, then person A should earn significantly more.

Daft government policies chose not to recognise this common sense, and created situations like people have described here, where there can be little or no incentive to work more, because you can work less then tax credits will top you up to virtually the same amount.

Of course now, with changing policies, many of the people reliant on tax credits are up shit creek, or if not now, have the threat of that hanging over them.

It would have been far simpler in the first place to pay a sensible living minimum wage, and ensure that if people work more, they earn more.

Doesn't seem rocket science does it

"She works so she clearly earns."

Well, duh. But not as much as the OP. Thereby the difference between what she actually earns and what she gets is not ^earned". Hence she makes the same as OP but OP has more responsibility and longer hours.
Do I need to include a dictionary definition of earning or are we all up to speed.

Just because you see "poorbashing" doesn't mean its there. Probably the big chip on your shoulder is clouding your vision.

Tax credits deduct 41 pence from every pound over a certain threshold.

So in theory no-one should be worse off, but I guess of the 59 pence earnt, there is tax and NI and once travel and other work related incidentals are taken into consideration then I can see how it is possible to be worse off working over a certain salary.

They certainly do want the money back... OH has just got a well-paying job after three years of fairly awful self-employment and they want four and a half thousand pounds back.

Because of the way they are applied by "period" we have to give the money that we don't have, because it hasn't yet been earned, back.

We are in a position where we have negotiated a payment plan with them , but a friend of mine was actually bancrupted by them.

I recently went up from 21 to 37 hours and I'm miles better off! I do pay more in child care now but I've definitely gained from wage increase and haven't lost very much in tax credits, so it balances out the increased childcare. Not sure really how it works for everyone but it has been in my favour to work more (one DS aged six, single parent).

It is a daft system but I'm not complaining. Dh earns 14k , we have dd aged 9 and ds 11 weeks and we get £190 a week. The effort involved in me working to earn maybe half or near that amount just isn't worth it. If things change and we suddenly receive less then I will return to work. It seems stupid that when I used to earn 35k we seemed to have less money than we do now esp taking of travel and lunches for work etc.

Dont get me started on Tax Credits and thier bloody stupid system.

DH is SE - last year he had a really bad year and only earned £10k, but this year he is already on course to earn more than that. I have tried until I am blue in the face to get them to change what they pay us, but all I ever get told is that any increase that is under £10,000 is disregarded.

Yes disregarded, but it doesnt disappear does it!

You sound like a marvellous person wigglewoo

Good thing other people do see the effort in working eh!

I have made a log of all the calls and the people I have spoken to so that when they come back to me and say they want their money back I can tell them I tried. I have made 26 calls about it.

Well don't work as much then & get tax credits like she does. Problem solved!!!

we get tax credits, we run out own business and while we have been building up our business the amount we get has gradually gone down (as our income from work has increased). we are at the point now where there is a sudden cut off which is worrying but also feels like a goal - as in we dont need it anymore as we needed it just to buy food a couple of years ago. Maybe im just really really sad!

there has to be a cut off somewhere and wherever it is some people will lose out.

Problem solved? If thats the way you want your society to run, I suppose you could say so. Most of us would say its a whole new problem, but there you go.

whatyou your post came across as getting more tax credits than wages not, like the difference between not earning/earning but that people in jobs near the tax credit cut off would be getting more in tax credits than they earnt. it also kinda sounded like you were saying that she didnt work.

and i didnt say anything about poorbashing,did i?

What is the tax credit cut off this year anyway?

I assume it's different for 1/2/3/4 DCs and extra if you have childcare costs?

Oooh - I think the stuff has certain levels and if you're just above it you lose out. I noticed that when ds was born and I got a job I got my hours fixed so I needed minimal childcare. I got almost no childcare element of tax credit. My boss then changed my days and I needed more childcare and it worked out cheaper for me as the childcare went up - very odd.

I'm now in a different job and it's lower paid - but they've changed the rules and we're on the threshold of getting nothing - and now my childcare costs are going up - yikes.

I'd like to increase my hours but can't in my job and there's nothing else out there so we're actually worse off.

The goalposts keep moving - I've abandoned that system and we'll just muddle on through.

We don't get tax credits (DCs too old) but DH finds workers won't do overtime because it affects their tax credits - doesn't help getting the work done!!

Y'think maybe I was talking to the person who did mention poor bashing? .

But why should you have to do overtime - surely it is better to employ more people to do less hours so more are contributing to society?

i expect so,im just knackered and couldnt remember if that was me or not

Vag You've informed them of an increase in this years expected income of up to £10k so you don't need to worry. There will be no pay back due, so long as you have infomed them.

Tax credits will only increase your income to a certain level. No-one eligible to receive tax credits is rolling in it! Nor does receiving tail tax credits make you eligible for housing benefit or council tax benefit for those doubters out there. But I do agree that arbitrary cut offs are sometimes unfair.

redhelen I assume you've never employed anyone or run a business.

Often overtim eis unpredictable and insufficient to justify an extra body.

It used to be that workers were often glad of a bit of overtime from time to time. They got double pay and it helped at times like xmas etc.

Tax credits make it impossible for workers to change their hours, even if they'd like a litttle extra from time to time.

Mixed it's true that no one on tax credits will be well off. But it does mean you can be on the same income as someone, and work less hours than them because your income is being 'topped up'.

Ermmm I've been a very high earner (or highish) so paid lots of taxes and undrstand both sides of the coin. You can hardly blame people for choosing to be a sahm when tax credits rewards them not to work if their dh is on a low ish wage. That's not my fault, its the governments. Its not a reflection on people's morality. You could say people are stupid to choose to work if they get more to stay at home.