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AIBU?

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Original poster

Tax credits reduce incentive to work more?

126 replies

11stone4 · 07/02/2013 17:11

My best friend Has found this to be the case. The more hours she works the less tax credits she gets. So what's the point exactly to work longer hours to get working and child tax credits to be reduced. I'm a SAHM FWIW

OP posts:
Lovelygoldboots · 07/02/2013 17:13

Do you get tax credits out of interest?

expatinscotland · 07/02/2013 17:13

Another one! The DM readers will along shortly.

I think we should just open workhouses and stop beating around the bush.

usualsuspect · 07/02/2013 17:15

Waits.....

HollyBerryBush · 07/02/2013 17:16

Well i think its a peculiar sstem - nut run with me on this!

to simplify, as I understand it, you get tax credits in a low paid job? So effectively you pay tax, then they give you some of it back in these credits? have I got that right?

Well why not raise the personal allowance and stop collecting the tax? would save millions on employing people taking it in, counting it, sending it to another depatrment to be sent out again.

I'm going for Chancellor - anyone with me on this?

Original poster
11stone4 · 07/02/2013 17:17

No I don't receive tax credits. My BF has been offered more hours at work but has refused to take them as she said it would reduce the amount she gets in tax credits.

OP posts:
ouryve · 07/02/2013 17:17

Tax credits aren't reduced at the same rate as net pay increases. Leaving childcare, housing benefit etc out of the equation (because they're the things that can scupper plans for people with families wanting to increase hours), someone who starts earning more will always be better off.

Lovelygoldboots · 07/02/2013 17:18

I have just got a job as a lunchtime assistant. I find it keeps my hours really low and my tax credits really high. I love milking the tax payer.

usualsuspect · 07/02/2013 17:19

I might give up work altogether just to piss a few more taxpayers off, not the OP though as she doesn't work.

Skittish · 07/02/2013 17:20

Your friend's a twit then.

When UC comes in she'll have to work more hours or lose her TC.

gordyslovesheep · 07/02/2013 17:22

as a scum bag single parent (with flat screen goat) I work more hours ...I pay more in childcare ergo my tax credits GO UP see ...

Original poster
11stone4 · 07/02/2013 17:23

Lovelygoldboots, are you being serious or do I hint some sarcasm ?

OP posts:
LST · 07/02/2013 17:25

I receive tax credits and if dp worked less hours we would be better off. Fact.

And I don't read the daily mail.

MrsVJDay · 07/02/2013 17:25

Ignoring all the emotive crap above, I also would prefer a much higher personal tax allowance than all the nonsense of giving with one hand and taking back with the other - must be hugely expensive administratively.

HollyBerryBush · 07/02/2013 17:26

No one think my idea is pure genius? I think its brilliant!

but Im sure someone will point outa flaw in it

gordyslovesheep · 07/02/2013 17:26

No she is deadly serious - as well as her £546464.99 an HOUR working in school TC probably give her an extra £658787849794980595 per child per day

Milky milky

Original poster
11stone4 · 07/02/2013 17:28

Can I not get a sensible response without all the bitchiness> minus Mrs vjday!

OP posts:
Lovelygoldboots · 07/02/2013 17:28

11stone4 yes I am being an arse but people make decisions based on a broken system. Dont judge your friend.

gordyslovesheep · 07/02/2013 17:28

yes - yabu :)

usualsuspect · 07/02/2013 17:28

I used to have that milko emoticon on my MSN Grin back in the day.

Writehand · 07/02/2013 17:30

HollyBerryBush, you wrote to simplify, as I understand it, you get tax credits in a low paid job? So effectively you pay tax, then they give you some of it back in these credits? have I got that right?

Well why not raise the personal allowance and stop collecting the tax? would save millions on employing people taking it in, counting it, sending it to another depatrment to be sent out again.

No. It doesn't work like that. I get Working Tax Credits and don't pay tax at all because I earn so little. It's a lot of money to me.

Thing is, when my DSs are both 18 my financial position will become dire as from the Tax people's pov I become a single person (only technically single as I will be supporting both boys in education when, of course, they have no source of income). This whole business of adult children in education gets very difficult money wise.

gordyslovesheep · 07/02/2013 17:30
Grin
CloudsAndTrees · 07/02/2013 17:31

This is a common story. The amount people earn and spend in childcare and travelling to work often doesn't amount to more than they currently get on tax credits, and sometimes if it does, it makes a difference of next to nothing.

It happens a lot, and that's why we need benefit reform and UC.

ihearsounds · 07/02/2013 17:32

Yes wtc, without the childcare element decreases. But this is off set because income goes up.
My tc are less than last year, but the income is up, and we have more money.
Your friend needs to look at total household income, not just tc which will be changing anyway. Tc should be really be seen as a bonus, and the guranteed income used in calculations.

Original poster
11stone4 · 07/02/2013 17:32

Lobelygold, I'm not judging her, I'm trying to make sense of it all. Do the government not want us to work more?

OP posts:
Original poster
11stone4 · 07/02/2013 17:34

Do what changes are being made exactly? Can someone please explain so I can inform my BF. She's clueless.

OP posts: