AIBU about Tax Credits cuts,

[Weathergames]

Commons back Osborne plan for tax credit cuts
www.bbc.co.uk/news/uk-politics-34260902

I don't claim anymore because I now earn enough to support myself - because I could work and progress my career as well as my life while being a single parent.

AIBU to think this is a total travesty and so many single parents are going to have their life's devastated by this - and what about people in domestic abuse situations who will now be more unable to leave?

Maybe I some benefits scrounger - but the tax credits enabled me to be a good parent and role model to my kids - without their feckless father affecting that .... AIBU?!

Osolea - the reason tax credits were introduced in the first place is to reduce child poverty. And I think they did reduce child poverty. The problem is that Labour made them available to people who didn't actually need them. I think they used to advertise that 90% of families were entitled to claim?

What this government has done is extremely cruel. A lot of people will also realise how instrumental the Lib dems were in reigning them in.

reading between the lines of some people's posts (re: well jobs like that aren't meant to be able to sustain a family etc) there seems to be an implication that actually only those with the capacity for high earnings should be able to have children.

working hard in low paid work used to be enough to meet the cost of living - now it is not and the answer for some, whether they're willing to say it or not, seems to be well if you can't afford kids you shouldn't have them.

that sounds awfully sensible to some but with the cost of living and the rates of pay and the reality of what percentages of people will never earn much more than NMW in the labour market we now have (re: no manufacturing or other 'labour' type jobs where sheer hard work and manual skill can accrue financial benefits and progress) you'd be talking about having children becoming some elite privilege.

life is becoming more and more degrading. apparently now someone working 'their arse off' and expecting to actually be able to afford not only to have a roof over their heads and food in the cupboards but to also be able to buy a pint or a packet of sweets for their child of a friday is a horrendous entitled scrounging pig responsible for the fall of society.

we are all so terribly entitled with our ideas that society is meant to work for us, that we should be able to organise our institutions and economics in ways that allow us to live dignified lives and raise healthy children, how very dare people think that life should be affordable.

I will pay a contribution back for help when I was down on my luck - in taxes I am able to pay throughout the rest of my working life because I was able to progress my career, I won't be occupying social housing for the rest of my lifetime and I'll pay stamp duty when I sell my house.

I thought that's what the benefits system is for? You pay in in the good times you take out in the bad times while making every effort to improve your situation.

Weather,. that is how it works in much of Western Europe too. However we have always had this problem in the UK as to whether we want to pay minimal contributions just to ensure a basic welfare system which most of us never need to draw from or whether we want a contributory system. I remember there used to be a fairly large difference between unemployment benefits if you had worked and paid NI and those if you had not. It rally did make work pay. We seemed to lose that over the last 20 years - you are no worse off as you get housing benefit and all the rest if you have never paid an NI contribution not in any major way. So that difference we used to have has gone away. Similarly with state pension - if you don't get it because you never worked you get housing benefit and pension credit which are about the same.

Many other EU states just pay unempoyment benefits for a short period until you find a new job. Iain Duncan Smith says though that most people out of work tend to be back in it within a year so it may be okay if we changed thing to one year unemployment benefit only. I think Spain does that.

However the tax credits issue is not about non workers as we all know. It's about state handouts for those in work having subsidised employers to pay low wage plus the huge issue that we have to spend less because we massively even under the old Coaltion spend more than we take in. Hardly anyone earns a lot so taxking high earners 12% stamp duty and 52% tax/NI or 60% at the margins is not bringing in anything like enough money as there is hardly anyone to pay those high taxes. Most people don't earn much so the hard truth is it is only by things like removing all child benefits from me and my siblings for all the cousins (ouch) etc etc and the tax credit changes that we have an impact in actually saving any money - £4bn with this tax credit change.

Some women and men may well have to work at weekends as me and my children's father have always had to do over 30 years so no change there.

I think this is an area where there is an ideological gap.

The Tory party holds the rhetoric that 'hard work should pay' and that 'we reward those who work hard for their future.'

I'm not a fan of the Tories, tbh, probably because I was born in the Thatcher years (1979) and had no experience of the terrible conditions before her election (my parents are Tory loyal and it's the only thing we argue about discuss with passion). However, I agree with that rhetoric - hard work should pay.

However, the way the policies are being implemented smacks of a different rhetoric:

"Hard work should pay, but only if it pays on its own."

A person who spends 40 hours per week doing domicillary care work is working 'hard'. It's very labour intensive, often dull, repetitive, exhausting. They will earn a very low wage.

A person who spends 40 hours of their working week (I acknowledge that their week may well be longer) in banking may also be exhausted and consider their work dull and repetitive. However, the reward for their hours of repetitive, dull work will be far, far higher than the care worker.

So, in the capitalist world, the economy is driven by supply and demand. If you have skills that are scarce and in demand, ie. short supply, then you are rewarded more highly. If you have skills that are plentiful and in lower proportional demand, you are paid less.

Suddenly, it isn't about 'hard work paying'. It is about having the skills that are scarce and in demand. Hence the fact that brickies, plumbers, mechanics, etc., used to be fairly looked down on as tradesmen and it was seen as a job that you did if you dropped out of school, yet now they can charge a mint and turn down jobs simply by quoting silly money for it, or rather just not turn up to quote at all.

This is where I have the problem. If you choose to take a low earning job when you are capable of more, fair enough - you've sacrificed earnings for lifestyle.

If you are working hard in the highest level job you are capable of, it doesn't seem fair that you are judged by society to be a scrounger.

Other EU states pay more than we do. They also have a system for when people are unemployed for longer than the specified period Most have contributory and non contributory plans. They don't just abandon people when the unemployment benefit runs out.

"This is where I have the problem. If you choose to take a low earning job when you are capable of more, fair enough - you've sacrificed earnings for lifestyle."
(My son - the graduate who has been a postman for 2 years and is very happy doing - his choice (silly choice in my view), pay is £20k. I would not support him getting tax credits or housing benefit although to be totally honest he does currently live at home and is the au pair in a sense of his younger siblings)

"If you are working hard in the highest level job you are capable of, it doesn't seem fair that you are judged by society to be a scrounger."

It is always hard taking money away from people but the state can only pay what it can afford. These BBC Q&A are interesting on tax credits:

"How much do they cost?

It's estimated the taxpayer will spend £30bn on them in the year from April 2015 to April 2016. That's 14% of the welfare budget (£220bn).
How many people claim them?

About 4.5 million, 4 million of whom have children. People may be eligible, broadly, if they earn less than £32,969. If a person's income is below this level and they also have children they'll be eligible for child tax credit. Eligibility for working tax credit depends on how many hours a person works.

How much do claimants get?

The average award of tax credit was £6,340 per year. But it can be far more than that.

Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child .

Then there is working tax credit. Claimants must work at least 16 hours if they are single, 24 hours a week if they are a couple with kids and 30 hours with no children. They get a basic of £2,010 plus extras. In addition, claimants may get up to £210 per week to pay for childcare.
Image copyright Press Association
So what's the maximum claimants can get?

It might be far more than their earnings. Take a single parent with three children, working 16 hours on minimum wage of £6.50 an hour. Their wage would be about £5,400 per year.

Child tax credit would be £8,885 a year. The basic working tax credit would be £3,970, including an allowance for being a single parent. But then add in the childcare element. At the maximum this is worth £11,000 a year. A total of £23,855 per year - more than four times what that single parent is earning.

This is why, for a single parent, it pays to find a job working 16 hours a week. But finding a full-time job is another matter. For every additional £1 a single parent earns, they will lose 41p of tax credit. So the incentive to work is there, but there is less of an incentive to work more than 16 hours. "

Interesting stuff.

What that doesn't tell you is that a single parent who chooses to work full time is going to cost you far more than the one who works 16 hours, because of childcare costs.

16 hrs at £6.50 = £5408
40 hrs at £6.50 = £13520

That extra 24 hours will result in a reduction in tax credits of £2911 ([13520-6420] x 0.41).

However, let's take the cap of £300 pw for childcare. Each day's cap is £60 and 70% is paid in tax credits.

The 16 hour week requires 2 days childcare. £120. The claimant gets £84 (70%).

The 40 hr week requires 5 days childcare. £300. The claimant gets £210 (70%).

So, although there is a £2911 reduction in tax credits for working 40 hours, there is a £6552 increase because of childcare. So a net rise in the claim by £3641.

The increased earnings are taxable, but only £2900 is subject to tax, so will net the treasury £580.

So the cost to the tax payer of the line parent working full time is actually £3061. We're better off if lone parents only work 16 hours.

That's before we even think about the fact that the person looking after the children will also be low-waged and themselves claim tax credits and may themselves claim for childcare costs.....

i just can't see how we can have it all ways.

if you don't want to have pay tax credits and housing benefit etc to workers then you have to have strict rent controls and realistic minimum wage and caps on how much profit utility companies and public transport can make.

if you don't want a world in which there are rent controls, profit controls and decent wages to make life affordable then you either have to top up incomes with benefits or watch people starve on the streets.

there's a whole lot of ideology etc but realistically either you control costs or you subsidise those who can't afford them or you live in a society where people, including children, are left to starve.

where realistically are these plans going? if they keep cutting and cutting how much people have without doing anything genuinely proactive about the cost of living then there is only one outcome eventually. if you still have a situation where there are billion pound profits at the top of a company and people who can't feed their children at the bottom and a state washing their hands of bridging the gap then?

i just don't see how this can be sustainable or lead into anything other than abject poverty, homelessness or disgustingly inadequate housing with families living in one room and eventually the complete collapse of social order and civilised living.

does anyone really believe that rent will magically get cheaper or wages higher because the poorest just got even poorer?

where is the plan?

I disagree I don't claim the child care element at all my family help out ( I'm very lucky ) so I assume there will be others in a similar position or with kids already in school whose tax credits go towards the basics because there wages don't cover it !

if you don't want to have pay tax credits and housing benefit etc to workers then you have to have strict rent controls and realistic minimum wage and caps on how much profit utility companies and public transport can make.

I agree, you can't have it both ways. I absolutely despise our broken system of endless housing benefit. But you are right you then have to have rent and prices within reach. you have to have enough houses. You have to discourage foreign buyers who leave properties empty. You have to crush nimbyism. Finally, you have to build houses. We have so much cruft around homes building in this country (a BBC article recently gave the stat that Canada, with half the population of the UK, builds twice as many houses, so 4x per capita house building), that for about 15 years it has been far behind what's necessary. This is more than a problem for government. It's a cultural problem. We are more interested in making sure all the windows on a street look the same and all the roof heights are the same, than we are in building houses for people.

rent controls are the last thing you want to do when there is a housing shortage.

Once rent comes under control, a lot of problems go away. Since everyone including businesses have to pay rent (although residential rent and commercial rent don't always move in tandem), prices will come down across the board.

The problem is this anglo-saxon view on home ownership. It's the only class of things where inflation is a good thing (i don't mean economically, I mean politically). Imagine if food prices went up in cost the way housing did. Everyone, including the wealthy, would be rioting.

"if you don't want a world in which there are rent controls, profit controls and decent wages to make life affordable then you either have to top up incomes with benefits or watch people starve on the streets"

Agreed honeybadger, people seem to forget we are living in a supposed civil society, why do we need to be going backwards. I do think Tories realise there would be anarchy if they cut benefits too much but they seem to be experimenting with how far they can go.

Rents in SE at least seem to be going up regardless of benefits and wages, they might stabilise but they wont go down. Landlords have mortgages leveraged against them so they most likely want to recoup that and maintenance costs as its being run as a business.

If they cant get the rent to make it work then guess a few properties might appear on the housing market but will get snapped up by majority/cash buyers/foreign investment.

We only had meat once a week back int 80's during the thatcher yrs, we rented a Tv and the central heating system was cobbled together from different sources, we didn't have regular holidays, neither smoked or drank, they just couldn't afford it.. They bought a run down terrace and they've spent their life modernising it.
No fancy toys or clothes, no nike twainers.. Plus my parents worked, my mum cleaned and my dad worked all hrs mon-sun, eventually jumping into hands on management, then office based management, now entering his twilight yrs in charge of 250 construction industry workers..

I started out with NO quals, YTS and it's taken me 25 yrs to become relatively stable but I've had to work hard, I once did 12 months 7 days a week 6-6, I run my business, sometimes there's a brief lull like now, but when it's busy it's 24-7, if I'm not working out of the house, I'm working on the business at home..
We have, paid up to £2000 per month for childcare, it's easing now the kids are getting older but it's a huge burden, but it doesn't last forever..

My point is, nobody said life was going to be easy, its taken my parents the best part of their working lives to become financially stable enough to have some sort of pension and own a home and we've all had to work like dogs especially in the construction industry, which is relentlessly tough, dangerous and hard physical and mental graft and you sometimes you have to literally fight for your money..
I just get the feeling that people think life is going to be a cake walk and the government owes them something..

Rubbish frank, there may be some who think like that but the vast majority of folk experienced just what you did. They are just trying to make ends meet.

Fact is that even with two wages coming in some are still priced out of the market when it comes to housing.

My parents coped with much the same as yours in the 70s and 80s. They both worked, could never afford to buy a home but their wages meant rent paid, food on the table and a few luxuries.

Compare it with now when two wages don't add up to enough to pay the bills as rent is so high. its not the same anymore.

The best that can be said about these tax credit cuts is that it won't affect existing children.

Yes it will affect existing children. The changes to WTC and therefore CTC thresholds take place in April. The two child TC limit is new claims after 2017. If you lose your job and have three four or more dc those children will be in poverty. This at a time when many councils have scrapped uniform grants and severally restricted bus passes for school.

They bought a run down terrace and they've spent their life modernising it.

impossible now. can a cleaner + (sounds like manual unskilled labourer) by a run down terrace now?

I find there is a complete lack of empathy for the young from the old, and your post sums it up. For many people a trip to the moon is more likely than buying a house. So, why save for it? why not just get an iphone 6?

frank. Dh and I both worked. We have four children. Dh became ill. Seriously ill. He can no longer dress himself, toilet himself or walk. He's 45 next week. He has got progressively worse over the last five years. We were insured but due to a medical difference between here and the USA the insurance won't pay out either. So, no, nobody said it was going to be easy, but not all people are on benefits because they think life is a cakewalk and the government owes them something. Don't judge everybody by the same standards. You have no idea about the lives of others.

The thing is though. We shouldn't be on here talking WTC cuts as WTC should not exist. Oh don't get me wrong I'm glad it does, but it should not need to exist. Wages alone should be paid affluently enough for people to live, and by that I mean living, going on holiday buying new clothes eating out ect, not merely existing.
If people are going out to work but still need to claim in order to just about live, never mind anything else, then. That is very bad day
A fair days work for a fair days should mean exactly that. Not a pittence that you can rely on tax credits to hold your hand and top up.

Frank. It's wonderful that you have prospered but giving how you remembered your own parents struggling. Is not fair to say that "You should be more understanding than anyone inreguards to poverty

No, he had a manual skilled trade.. And I've said and other posters this is not about the disabled or maligning the disabled..

I don't have a house, we rent too, our basic plan is we both graft now, 5-7 days a week, deposit, jump on the ladder and then work to pay the mortgage off and then down size once the kids bugger off to work/uni/work..

And yes people on low incomes do buy houses.

For many people a trip to the moon is more likely than buying a house. So, why save for it? why not just get an iphone 6

When you write it like that, you suddenly realise that the powers that be have got every incentive not to solve the housing crisis.

How many pension funds are invested in Apple ?

Frank is taking about the 1980s, when it was possible for a cleaner and a construction worker to borrow 2.5 times their joint salary and buy a propery with it. Even in London! My first property was a zone 3 maisonette costing £55k in the mid 1980s, affordable with my new-graduate salary and my partner's driving job (we earned about £22k between us). These days similar properties go for upwards of £300k, probably quite a bit more now, and are out of reach for anyone in low paid work. Even renting a similar place would cost you between £1500 and £2000 a month.

I can't ever remember the gap between the cost of living and average wages being so high, at least in the South East.

I've struggled, I remember toasting bread on my electric fire, sitting in the dark and cold because the meter had gone off, no carpets in my house, no tiles around my bath.. I bought a second hand cooker, the door was broken so I propped it shut with a fork, I remember smashing the fifty pence leccy meter open so I could buy food..

I've been there and bought that t shirt, my only way out was to work, I look at a lot of people, even the most foolish of people back then have managed to dig there way out to some semblance of a life..

this is not about the disabled or maligning the disabled..

Well actually it is. My dc is disabled, and i have just given up work to stay at home to look after him. We did this on the basis that we would get tc which would make up some of the shortfall of my wage. Between dh wage/tc/dla/carers allowance we are able just to pay all our bills albeit having to significantly alter our lifestyle (which was not particularly fancy, le.g. last holiday we had was in 2005!) being one wage down and tc/dla not making up the whole shortfall. And I dont doubt im the only one in this position. There will be plenty of parents with disabled children who are going to see their tc cut and sod all we can do about it. So i say fuck off to those who think that its not affecting/about the disabled (as well as the low earners).