To ask a benefits question and hope it's not controversial?!

[YoshimiBTPR]

I am job searching just now and realistically am not going to be paid a great deal. Salary and child maintenance will cover mortgage, bills and wrap around child care (maybe). So I'd be living on tax credits - food, fuel, clothes etc.

But everyone always stresses that you can't rely on benefits. Which I understand. It's a huge worry. What are the actual chances of tax credits/universal benefit going and there being nothing to replace them?

I feel clueless. In the past would a single parent have had to make it work on whatever they earn?
I'm trying to assess the realistic possibility of having to do this. No idea how I would.

Low.

Until recently I'd have said the Tory plan was death by a thousand cuts, so keep paring away until tax credits became a very minimal thing only the poorest got. Now, I don't know. Politicians seem to be realising that austerity is very politically toxic. It may well be that even the EU referendum will come to be interpreted as a reaction to austerity, and this year's GE certainly appeared to be.

However, the main way to solve the cost of living crisis would be to seriously address our property bubble, and I don't see any politician really, genuinely doing that. Labour have some policies, but nobody is really saying that in order to do this properly, a lot of people would be left in negative equity. So that still leaves us the question of where the money for all this is going to come from.

I do think the conditionality in UC isn't really going to work, especially as we get more and more automation over the next couple of decades. We're going to have to divorce ourselves from the idea that the best way for people to contribute is to work full time. Lots of people's labour simply isn't going to be worth what it would take to coerce them: it isn't now, so it certainly won't be when we have fewer unskilled roles.

We're going to have to divorce ourselves from the idea that the best way for people to contribute is to work full time
That's fine, as long as people working FT don't get penalised, otherwise, why do so to pay more taxes, to support those who will only work PT? How else can you contribute more than you take out?

The system needs to be fair if it wants all to support it.

It also needs to be workable. If it isn't possible for everyone to contribute more by working full time than they do by part time, ie if we're going to expend more resources coercing them than they could put into the pot by working, then making them do it becomes a net drain. A luxury. Something that has to be paid for either by cutting elsewhere or more tax on those who are contributing.

I can see why people have concerns about fairness, but this is the way it's going to go with automation. Fair won't come into it. The question will simply be how we choose to deal with it.

swingofthings that's why I support a universal basic income at just above substinance level so it would always be better to work but not necessary for survival. I reckon you'd get a lot more people working then but most working fewer hours than they would have before (leaving more time for their families)

Universal Basic Income seems like the obvious way to go, but I think we need to fix our property costs first otherewise it's going to be far too high to be affordable. That's before the cultural shift to accept it! But I do think we're going to have to end up with something like that eventually.

My mother was widowed in the 1960s with two children - me being only 2 - and had to continue to work from the minute my father died. She had a mortgage to pay and his debts apparently so times were absolutely appalling All that was available then was widow's pension and her wages and no free or subsidised childcare. Looking back it must have been really really hard. We had to sell the house and buy a much smaller one ( fair enough) and I remember clearly when I was about 15 her sobbing with worry as she had around £10 a week to live on ( obviously worth more than now but still). Not saying that all that today's benefits are amazing but things have changed a lot - I was a single parent to my eldest daughter when she was small and I did manage - this was in the 90's and it honestly didn't seem too bad.

I think a universal basic income is a great idea

The system needs to be fair if it wants all to support it.

This!!

Before 1970, there was no such thing as tax credits, only equivalent of child benefit. I don't think our society would accept the level of poverty that existed amongst poor families pre 1970.

It's also important to remember that in order to be a net contributor, you have to be a fairly high earner. The large majority of the population aren't. Even for a single person without children it's something like 30k: slightly over the median full time salary. While that's not an astronomical wage, it's also one that's simply beyond some people and always will be.

The majority of childless people are net contributors.

Are you sure brasty? I didn't think the majority of childless people were earning 30k or over. Childless people of working age, I should say.

I guess if tax credits in some form didn't exist ( highly unlikely seeing as how many people rely on them) , then between you and your kids dad you would have to sort childcare between you and he might need to pay more to ensure they have what they need. I don't quite understand why people get tax credits when the non resident parent is working and willing to pay maintainance for their children. I know this isn't the case for some lone parents and that they absolutely need tax supporting through tax credits but many nrp are willing and able to pay and do so regularly and reliably.

And Lakie one reason childcare is so expensive is unlike when I started working we now have a minimum wage so child care workers have to be paid that - that is the main reason childcare is expensive, because we pay the workers at lot. My grandmother worked as a nanny for an English family in India in the 1920s. I bet she was not paid a lot (although was fed and provided with a room - a huge perk when you are one of 11 children in poverty back in the UK).

The Tax Credit reform was a disaster as it was always going to be used as an alternative to working more hours rather than an initiative to help those in need. Indeed, it gradually become more and more abused.

The principles of Universal Credits make a lot more sense. Whichever way we look at it, a family working FT hours should always be better off than a family on an equivalent salary working PT, and this should be taking disposable income into consideration, not just net income.

swingofthings does that only apply if both parents work full time? Or if one works FT the other PT?

The principles of Universal Credits make a lot more sense. Whichever way we look at it, a family working FT hours should always be better off than a family on an equivalent salary working PT, and this should be taking disposable income into consideration, not just net income

How does that work? Disposable income? Are you suggesting we literally police what people buy, what they spend on utilities, petro, insurances etc?

I had to rely on benefits for 15 years as a single mum. I found that by staying informed about changes ahead of time and understanding the system, I never had any issues claiming even when cutbacks came in. We had an income above the benefits cap level at one point but as it was due to disabilities we weren't affected. Our disability benefits were never threatened as we spent ages learning how to complete the forms and gather evidence correctly. We were never affected by the bedroom tax as we did a mutual exchange to a smaller flat. We never had any problems with tax credits and concentrix as I made sure there was no post coming to my house for anyone else, and I had a clean financial break from the ex. So by staying informed you can feel less anxious about the way the system might affected you in future - any changes are always debated in parliament etc, and it's worth reading through the Budget documents in full every year. And in the future, there's every chance you might come off means tested benefits altogether, as most single parents form relationships eventually (based on Gingerbread statistics). I got married last year to a high earner so I just get my disability/carer payments (which we aren't financially dependent on) and we don't get any income related benefits now, not even child benefit.

Childcare is also expensive because the cost of the property the majority of childcare workers work from has to be taken into consideration too. And that's much more expensive than it used to be.

Childcare ought to be subsidised properly though so that everyone can afford it - you'd get a lot more parents working if childcare was affordable.

The Tories stuck VAT on top of fuel to claw back the money they lost on the Poll Tax. If they want to tax the poor the same as the rich, then they have to top up crap wages with benefits.
This country is nowhere near bankrupt. Dont lose any sleep over needing 'benefits'. The most sensible system would be a Citizens Wage, then no one need be snarky about it.

www.independent.co.uk/news/uk/politics/replace-the-benefits-system-with-a-universal-basic-income-paid-to-all-citizens-think-tank-recommends-a6777101.html

antiquesilver that's really good advice. i need to be much better informed.

I know a lot of the discussion is theoretical rather than personal to my post. But for the bits relevant to me...

Without the help of the welfare system I couldn't have left my marriage. My ex pays above the CM rates. He does not earn enough to maintain 2 households. He has been a higher rate taxpayer for a long time. I earned above the £30k figure quoted below before DC. So as a household we have paid a lot into the system. Right now I need a bit of help back from that system.

I wonder how far the tax ex pays covers the help I get. Regardless....

I fully support the welfare system in helping those who need help. I consider myself very lucky to have earned well in the past. I'm not more deserving.

I did not work any harder than friends I know who have relied on tax credits for years. I just had better opportunities.

I plan to work full time in the next couple of years. I have a plan in place. Realistically I am still going to be dependent on welfare help.

Basically our housing costs are high. Ex tied to location by job. I wouldn't take DC far from him. If I sold up I would pay much more in rent for equivalent housing. I could top up my income with my share of equity. But it would soon be gone and then I'd need, and be entitled to, housing support. Over the timespan until my DC are 18 i think I would cost the state more. I'd also have no equity in the future that could fund care in my old age.

So realistically i don't see how I can avoid dependency on state help until DC are adults.

No one plans the breakdown of a marriage. And despite living fairly frugally on income support right now I am one of the lucky ones. I can pay my bills.
Not many want to be in the position where a full time wage is not enough to live on.

Oops. that is long and possibly invites debate I didn't really intend.

Off to read the article linked DJ.