AIBU to think benefits are needed to push earners up from avg. wage to increase equivalent of 10k p.a. in salary?

[williaminajetfighter]

So I'm watching very bad tv 'Rip Off Britain' and they cover someone who is having debt problems. They show him reviewing a spreadsheet about his debt and and it shows his income:

Wages - 1,600
Tax credits - 280
Housing benefit - 200
CSA - 190
Child benefit - 80
TOTAL - 2350

Assuming he works FT then his income is circa 24,600 which is pretty typical of the average wage in the country. Removing the income from CSA, his new income is 2,160 which works out to what your take home income would be FT at a salary of 34,000. So essentially benefits have given him a 10k salary increase!

I don't know a great deal about the benefits system and obviously have no idea of his personal circumstances - can glean that he has a child and is getting ex-spousal support.

But what I'm struggling to understand is that his salary is pretty much the average across the country so I wonder -- are most parents on an average wage in need of such a significant top up? I'm sort of blown away by the fact that an average wage does not provide enough to live on and that benefits can increase someone's 'salary' so significantly.

[expatinscotland]

Finally, we have it, after over 100 posts: it's all because of buying gadgets, clothes and holidays. Have we had the drinking and smoking gambit yet?

[Sparrowp]

Expat, its just because janey68 has more money than sense. With increasing wealth inequality, this is happening more and more. All the excess money clogs up their brains and makes them infernally stupid.

[Oceansurf]

I like to know how

We get £150 a month tax and child credits - one child, on a combined income of £14k and nursery costs are £400 a month for 2 days.

I've never understood how some people are able to exploit the system and end up substantially better off than others. I might add we are incredibly grateful for our £150, we literally can just afford to eat with this. No room for any luxuries in this house at all. No one has had new clothes for over 3 years, i only own 2 bras for eg and even DD who's only a baby is in second hand clothes handed down.

There are a lot of benefits out there - but seemingly, all handed to people on income support (how do you even get on income support???) and help given to people with their rent (as on the OP's eg) but god help you if you tried to make your own way and got a mortgage.

[candycoatedwaterdrops]

It doesn't matter if I forgo clothes and gadgets and food and shoes, I still won't be able to get the mortgage I need to buy a small one bedroom flat and I am fortunate enough to have quite substantial savings.

[hardboiledpossum]

Sparrow, that is ridiculous. 34000 is more than enough for a single person in London. Most of my friends earn around that and as well as being able to pay there rent and bills they also have great social lives and frequent travel abroad.

We pay about 1150 for a two bed flat in London. We have an income if around 40000. Its not luxurious but we can pay all of our bills, have a bit of a social life and go abroad at least once a year.

[janey68]

Fabulous inability to read and comprehend my posts there - well done!

This is all an aside anyway, about how expectations and spending on things like the entertainment sector have mushroomed.

The key issue is that if people can receive almost as much through fewer hours or an easier job as they would by working more hours or taking on a higher paid higher challenge job, then it's no wonder our economy is screwed. Simple.

[twistyfeet]

yeah, I was at the holidays and eating out. Not done either in 12 years.

[dirtyface]

oceansurf that sounds really low to me, i am sure you should get more than that based on your income, esp if you pay for childcare.

but why are you saying that people are "exploiting the system" ? who is?

[GinOnTwoWheels]

Dirtyface, I have several relatives who are exploiting the system, like the couple with 5 DCs who both work a couple of days a week each and receive over £20k per year in tax credits and child benefit. They have a tiny mortgage and don't have to pay for any childcare.

I work long hours in a high stress job to earn £40k per year. I pay nearly £1k pm tax and NI and their monthly income is higher than mine.

[dirtyface]

seriously gin ??

thats absolutely crazy

they will be screwed once the kids are bigger though

[Oceansurf]

Exploit was probably a poor choice of words, but I relate to these 'stories' (and there are plenty!) that people refer to (in the papers etc) where people are doing 'well' on benefits.

Honestly, I don't know anyone like that in real life. So who are these people!

candycoat I take your point. I was a lot better off financially (earned £30k) when I took out a mortgage. However, I had no savings, and after being made redundant, and then losing another job...baby on the way etc, we are now in the position of struggling to keep our heads above water.

I know rents are high, but a friend of mine on low income gets nearly all her rent paid and her council tax. We don't get any such help. My substantial savings were used as a downpayment on the house, which then crashed in the housing market.

[lilystem]

I find this argument fascinating.

It's something I think about a bit as I am an employer.

I currently produce a very basic foodstuff I would bet 90% of mumsnetters put in their trolley once a week.

I get no farming government subsidy for this product before any of you say I do!

I pay my staff above minimum wage but below the "living wage" (I read somewhere it's £7 per hour) I would love to pay a higher rate of pay but my business cannot sustain it long term. This is for a very basic manufacturing type job. There are some employees with many more skills and experience who are on a fair bit more.

The answer I can see is that the cost of the basic foodstuff goes up in the supermarket. a

How do we as a country solve this?

[Viviennemary]

I think the system needs to be overhauled. Why are people on £12,000 a year paying tax when somebody is being topped up when they are on nearly double this. It's just encouraging firms to pay low wages knowing the workers won't strike and won't do anything because benefits top it up. House prices and rents in the south are massively distorting everybody's idea of what a living wage is. And they are being subsidised more and more and rising ever higher with nothing being done about it.

[lilystem]

But I'm not being encouraged to pay low wages. I cannot afford to pay higher because consumers already think the cost of the item is too high!!!

[passedgo]

Interesting to hear everyone's stories, it would be helpful for George Osborne to listen to them as well.

We arr generally as a nation working hard for little gain, someone must be making money.

I suspect the main beneficiaries are big businesses, they sit on our hard earned cash and expand their empires.

[Madamecastafiore]

People just don't cut their cloth anymore.

You live in a 2 bed flat but have 4 kids anyway. You then say you are over crowded and so demand a new house. I remember friends sharing rooms with 3 siblings, 2 sets of bunk beds. They are not scarred in any way. Or people didn't have more kids than could fit in their houses or they could afford.

Now as soon as you say something like that people chuck arguments about failed birth control and human rights to have as many kids as they want.

Parents are being absolved of responsibility to provide for their kids as the government will provide for them!!

[passedgo]

Don't you think we should have made a little progress sinve your childhooe? Four to a room should be an accepable norm?

The only people not cutting their cloth is the big businesses, the banks and those who have made a fortune out of the sale of our nationalised industries, infrastructure and public services.

The people that really work hard have to ask for handouts from the government.

[Madamecastafiore]

What do you mean by progress? Having more children than you can adequately house without state help? Absolving people of responsibility to provide for said children?

We should be harking back to an era where people didn't rely on credit or top ups to raise their standard of living but raised it by working and saving.

To do this the economy needs to be turned on its head, not sure how this will happen but I truly think if all the credits brought in by the labour government had not had happened we wouldn't be up this particular creek as markets would not have been artificially inflated.

[passedgo]

The Thatcher government liberated banks from restrictions enabling unsound credit to flow, inflating the markets.

Actually.

[Darkesteyes]

This wont help matters.


twitter.com/SkyNews/status/383342225926524928/photo/1

[Darkesteyes]

twitter.com/SkyNews/status/383342225926524928/photo/1

[passedgo]

I can't read it, are they bringing back workhouses?

[expatinscotland]

Harking back to an era? That's the past, when housing didn't cost so much, tenancies were secure and the cost of energy and transport weren't so high millions of people have nothing to save at the end of the month.

I don't want to hark back. The past sucked and it's gone. This is now, a place where the cost of essential and vital provisions that keep society in a good state: housing, power/gas, transport, water have been allowed to balloon in relation to even well-above average wages.

[passedgo]

I wonder if there's such a thing as poverty deniers. Some people can't accept that working people are finding it hard without blaming them for it.

[Viviennemary]

What on earth are tax credits anyway. They are just handouts by any other name. You don't even need to pay tax to get tax credits. I agree with just raise the level at which people are taxed. Or even give them extra tax allowances for first and second child.