AIBU to resent my agency social worker colleagues?

[jollo]

I'm a social worker. Work alongside 'agency' workers who are paid between 25-30 quid an hour, have a 'LTD company' set up and pay themselves £11,000 a year, claim working tax credits, and squirrel away the rest. 'They also get agency bonuses of £500 at xmas and for staying with them for a year...

This is the public sector of today. I'm paid £34,000 a year. They cost minimum of £45,000 and have the gall to claim tax credits!

And how are all the vulnerable people that you are dealing with doing? With all the cuts going on has your pay taken that hit yet? Probably not. Pretty soon everything we pay into the budget that pays you and your agency co-workers will just do that, pay you, with nothing left for the actual services that you provide. Of course, you only do the job because you 'care', not because of your job's T&Cs.

Agency workers have to cover insurance, tax, sickness, holiday pay, and pensions out of their wages. They have a lot of overheads which employed workers don't.

If you think that is bad you would be horrified if I told you what locum Psychiatrists make. (I'm not going to name figures but it can be a LOT)

TBH with you, most tradesmen, along with child minders, hair dressers, mobile nail technicians, beauty therapists etc I know are self-employed. That's why they aren't poor. Everything is tax deductible. But, balance that out with bad weather, not being able to earn for the best part of 3-4 months a year, accidents, you can't sign on for SSP if you're self-employed.

I would still take the soft option and be an employee.

i don't understand the resentment - as others have said, they're being compensated for the very real risk that they are let go when not needed. Firms like contractors because they're easy to get rid of when the budget gets squeezed. You have these choices, presumably you prefer stability and are compensated for the degree of risk you're taking.

I feel the same. We have one team that is all but one staff member is agency. There is 11 team members. It's madness. Such s high turn over for children too.

A few years ago I made the mistake of leaving my job to do agency nursing. I specialised in critical care and the agency rates if pay especially for unsociable hours were brilliant. The problem was the work was so sporadic and inconsistent, I found myself working every shift going, days, nights in quick succession because I had weeks with no work at all.
It was so stressful, I ended up driving miles for work and not always treated nicely by staff on the units.

I ended up back in NHS employment 3 months later...never ever again.

I think there is alot to be said for job security, working relationships and knowing you can pay your bills.

The reason people don't do it is out of loyalty to the system and to the poor service users that the service is there to support.

I've carried out a number of studies into this area and there is a huge cost to the LAS, nothing comparable about it. As well as the inflated hourly rates they also pay in poor service to service users - turn over of temporary workforce or agency workers being poor quality which means longer term and more intensive interventions, salaried staff getting passed off and leaving, all salary rates including for managers being pushed up to address the arbitrary inflation to name a few reasons.

But once the cycle has begun it is very difficult to stop. The west midlands have had some success - Google wmadcs social work agency if you want to see.

Yeah I don't understand the resentment either. More to the point to be annoyed with your organisation if they fail to recruit, attract or retain permanent workers...there are usually reasons why which they are failing to address.

It is a whistleblower issue. The LA is colluding with benefit fraud through allowing them to be paid via ltd companies. They are not allowed to claim benefits as their dividends are considered income. If collusion occurs the onus is on the employer to ensure that they employing tax payers.

The Ltd thing is stopping in April, but the responsibility of checking if the contractor falls under IR35 is going to the employer and it only effects the public sector.

Flat rate VAT scheme is stopping I believe though.. Which is annoying so will probably come or of paying any VAt now personally if my income allows it this year.

I find both these new changes personally mind boggling...

Isn't stopping rather!

Hmm..and now I know what is meant by "I work in the public sector but could get more money if I worked in the private sector"...I have often thought what private sector version of social worker, local council administrator, policeman, etc is available and if it is available and better pay why don't you go and work there then? But this example of being a self-employed via Ltd.Co-type consultant, no-contract example is what you mean I think. Probably better all round than a Council paying an Agency fees and not having to fork out forever towards a Pension. Swings and Roundabouts. Still I'm concerned that this is a big concern of yours, rather than the concerns of the vulnerable people your spec states you should be concerned about.

"i don't understand the resentment - as others have said, they're being compensated for the very real risk that they are let go when not needed. Firms like contractors because they're easy to get rid of when the budget gets squeezed. You have these choices, presumably you prefer stability and are compensated for the degree of risk you're taking."

Isn't this unlikely though in an area like social work where there is a massive shortage of qualified staff? The local authorities just have to pay up

There are lots of reasons to be an agency worker, not related to pay. It gives a lot more flexibility over when and where you work, makes it easier to have control over hours etc.

It also means you are the first to go if there are cuts so it is swings and roundabouts.

If it's so financially lucrative with no risk, why don't you do it instead of bitching about people who do? If you are going to pretend there is some altruistic, morality reason for not doing it, then fine, pat yourself on the back for saving a couple of tax pounds. But don't berate those who are just trying to work in the way that suits their family best.

There are extra costs that are tax deductible, employers NI which is substantial (e.g. on a net salary of 1500 pm it is around 500 pm NI and Tax bill (employers and employee) this is around as at the moment there is an incentive from the government paying some of the NI liabilities). There is also insurance required I would have thought this is quite high in this field. Then travel would be allowable and other incidentals like laptops and so on for work purposes or if a car is required. As others have also said then you have the insecurity aspect. There will also be a requirement for pensions soon too.

They have to pay corporation tax and dividend tax and some will be paying vat. Along with no holiday pay, sick pay or pension. Along with it being harder to get a mortgage and other credit.

there's nothing to whistleblow; it's all perfectly legal. Just immoral IMHO.

Op please elaborate.

People posting are confused at the difference between being an agency worker, and being an agency worker exploiting the Tax & NI loophole by not paying NI and TAX on the earnings as they pay themselves as a Director...

Agency staff earning a high hourly rate is not the issue (that is deserved to cover the unpredictability, no security etc) it's the fact that they are effectively not declaring it as taxable income due to the current loophole and then claiming tax relief via tax credits...

As a director I assure you I pay:

Corporation tax
NI
VAT
dividend tax

I agree people are getting confused though, a temp agency "worker" is different than employing a person who operates under a Ltd or umbrella.

Yes that's how I understand it as described random- what I don't understand is how they keep their tax credits- surely their self assessment would force them to repay it?

For the posters above- the point of staying under the £11k threshold is to avoid paying tax and NI. I can't think why you would need your own insurance, you would be covered by the councils

You wouldn't pay VAT (why would you register? It's not a vat able service)

You would surely pay corporation tax ON your dividends- what is dividend tax?

No NI or income tax

I don't think it's ethical (or makes good business sense) to claim tax credits if your a director though.

You do pay tax on dividends now, and the only way to get money out of "your" company is to declare a dividend, steal it, or fiddle your expenses.

The latter 2 are illegal.

You can leave the money in the company (as a director your responsible for the money but you do t own it unless you legally take it out). And claim benefits, but the rate that company tax is going up, and the introduction of dividend tax, you are just stupid to do so.

Take it out and bang it in an isa or something!

I feel your pain OP. I work as a mental health nurse and my agency colleagues are earning sometimes twice an hour what I am, and bar a handful of good ones, the vast majority of them don't really care about the work at all and are just in it for the money. Plus because they're not regular staff they can't even do a lot of duties on the ward because they don't know the systems and don't have access to the IT network.

The loophole that is being closed is to do with the fact that they are in effect working as staff yet operating as Directors...

So nobody is paying employers tax, NI, Pension - it is different for someone who owns their own company running a business of some sort and pays themselves as a director.

Not sure if that explains it better. I just know at work we've had to look at the people we employ who aren't "staff" and establish how we pay them and whether they have Ltd companies. So someone who comes and does true consultancy work it's fine, someone who works doing the same thing as an employee = not fine...