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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to ask how you will be affected by the budget announcements?

776 replies

manicinsomniac · 08/07/2015 17:24

Sorry if there's another thread about this, I can only see lots of speculative ones.

Now that it's announced ... I admit I'm struggling to get my head around it. I don't think it's as bad as I thought? I don't think it can be that good though? I don't think there's a single thing in it that affects me. I'm not sure about any of that though because I find it all quite confusing!

So, ordinary people from ordinary families/households - how are you going to be affected, if at all?

OP posts:
Cleo29 · 08/07/2015 23:52

Melamineteapot:

That is not necessarily true what you say - the CTC threshold will also reduce from £16105 to £12125 so if you are working 15 hours and you earn more than 12125 then you would see a CTC reduction as well.

Cleo

wafflyversatile · 08/07/2015 23:56

Is that good or bad for people working 16 hours or 15 hours, Cleo?

I don't have kids and never claimed any benefits so I'm totally unfamiliar.

Senada · 08/07/2015 23:56

I think this is just the start of the tax credits cuts. They'll be reduced again in next year's budget, or possibly the following year.
Also, the new Living Wage, just to remind people that for those aged over 25, it will go up to £7.20 an hour a year from now, but it's going to take 5 years before it increases to £9 an hour.

Cleo29 · 08/07/2015 23:57

Waffly - it completely depends on the income figures involved.

Everyone will need to look at their own circumstances to see how the cuts affect them - but it isn't true to say that dropping to 15 hours would protect you from the cuts in all cases for the reason I give.

Cleo

Ledare · 08/07/2015 23:57

Cleo does that mean two carers on £6458 between them will still have the same CTC?

Carer's allowance is counted as taxable income for tax credit purposes but we don't get WTC, it's just CTC because it isn't earnings as such.

Cleo29 · 09/07/2015 00:50

Ledare - they won't be affected because they are still under the revised CTC threshold after April 16 so will still get maximum credits. The only impact on them will be the freeze, so they won't see a rise in tax credits.

Cleo

OurDearLeader · 09/07/2015 00:52

Does anybody know what will happen to the childcare element of tax credits? It's really unclear and none of the calculators seem to take that into account.

MelamineTeapot · 09/07/2015 01:01

I didn't realise the threshold for CTC had been cut too, Cleo :( i was listening on the radio whilst driving, so missed bits every time we passed as tree and the radio cut out.

Cleo29 · 09/07/2015 01:04

I have just posted about it on another thread. The CTC threshold is not set like the WTC threshold - it comes about because of the WTC threshold, the WTC taper rate and the WTC basic/couple/loneparent element rates.

It is basically the point at which those two basic WTC elements are tapered away to nil and at that point CTC starts to be eaten away.

So it naturally reduces because of the changes to WTC.

Cleo

Ledare · 09/07/2015 01:05

Thanks Cleo. There are carers I know in RL and on MN who will be very glad to hear that Thanks

Cleo29 · 09/07/2015 01:05

Ourdearleader - The childcare element is part of WTC, so it is affected by the cuts to the taper and threshold just the same as the other elements.

Cleo

zarzlee71 · 09/07/2015 01:59

Well according to the calculator that was posted we will actually be a tiny bit better off. slightly reassuring. I am a full time mum and my partner works full time and I calculated based on 3 children incase anyone was wondering

Lazeedayz · 09/07/2015 06:52

Worse off by the cuts to tax credits by around £2000
Married two children, dh works f/t on low wage but is slightly over the £11,000 as is everyone who is on MNW but works full time.
I work p/t and receive carers allowance.
This is not a budget for the working poor.

OddBoots · 09/07/2015 07:02

Does the calculator telling you that you will lose less working 15h simply mean that you had less to start with because you wouldn't be able to claim any or as many tax claims until working 16h or more?

Margaritte · 09/07/2015 07:28

Can't believe that so many people are affected by this. It makes no sense to me, that it seems that the lower income you have, the more is taken off you Confused

Our circumstances are that I stay at home, we have 3 DC & DH works full time. I calculated last nigh & posted. We will lose £2000 (just over). Can anyone tell me when this is meant to kick in?

Margaritte · 09/07/2015 07:29

last night*

serenmoon · 09/07/2015 07:36

I'm shocked at how many are losing out. I agree it's definitely not a budget to help the working poor. It is annoying me this morning that much of the news commentary I'm hearing is glossing over the tax credits cut and instead focusing on the living wage, when it isn't actually a living wage and won't rise to £9 until 2020. It's not going to make up for the tax credit cut.

Cleo29 · 09/07/2015 07:49

Margaritte - the taper and rate changes for tax credits starts from April 2016.

For tax credits - the higher your income the more you lose.

Tax credits are complicated - this change has escaped from any press attention because to be honest most people don't understand it. It is the major change though and will cause the majority of tax credit claimants to lose a fair bit come April.

Cleo

MelamineTeapot · 09/07/2015 07:51

Can I just ask what will happen to those children, come April 2017, who ARE born into families that CAN'T afford to support them, and that the government WON'T support? Because there will be some; not everyone makes sensible contraception choices, not everyone is able to make well-thought out plans about when to conceive, sometimes accidents just happen.

Regardless of whether you agree that 'people should only have the children they can afford' or not, the truth is there will be some babies born, less than 2 years from now, that no one is willing/able to pay for. Unless we go down the route of compulsory abortions for anyone on a low wage/already has 2 kids, I can't see how it won't.

What does everyone suggest should actually happens to those children?

almosthuman · 09/07/2015 08:04

Worse off by approx £1500 a year loss in tax credits which means life will be a lot harder.

Single parent one child working full time not sure where to make savings, I don't drink, don't smoke and go out no more than twice a year. Will have to look for cheaper meals and may have to consider rehoming my dogs.

Egosumquisum · 09/07/2015 08:06

This reply has been deleted

Message withdrawn at poster's request.

angelos02 · 09/07/2015 08:20

About £500 better off. Not much but glad I voted for 'em.

cantgonofurther · 09/07/2015 08:20

We lose £1000 ctc however recently had a £2000 pay rise which also meant a ctc cut. So it is not to bad for us as due to payrise we won't be worse off.

FretYeNotAllIsShiny · 09/07/2015 08:22

I'm confused, because all this is based on tax credits, yet tax credits are being phased out and universal credit is coming in? I'm sure I read somewhere that my area is getting moved onto UC in October.

Also, is the living wage going to be the new minimum? I earn the minimum now but only work 18, so am I in effect getting a 70p an hour wage rise soon? And is the calculator taking that into account when it cheerfully tells me I'm going to be over a grand worse off? (Work pays! Um, really?)

Like a pp, I work in retail. We all had our hours cut recently. If wages go up, the hours available are going to have to go down again, or some people are going to have to go. Yet UC will demand I work 30 hours as a single parent with kids at high school (I think it;s 30, could be more), I'm not sure how I'm supposed to do that without taking on a second job. Me and most other retail workers in the same situation. I'm no economist, but if everyone is losing money, then shops will be losing money, thus hours will be cut and isn't it a downward spiral?

OurDearLeader · 09/07/2015 08:26

The calculators don't seem to take into account the 30 hours free childcare that's coming in I don't think.