To think paying tax on jobseekers allowance is just crap

[20thcenturygirlwithherhandsonthewheel]

I was made redundant a few months ago. I have worked just under 30 years and never claimed any benefits before. DH and I have always saved to make sure that we have money aside just in case of emergencies (especially as housing benefits don’t pay the mortgage), so we have over £16k in savings and can’t claim anything means tested.

fair enough.

the only benefit I could claim when unemployed was contribution based jobseekers allowance: a massive £93 a week that I could only claim for 6 months.

thankfully I was only unemployed for 8 weeks. But to my surprise I’ve just recieved a letter from HMRC telling me that the paltry £93 a week was taxable. So really; probably will end up about £70 a week.

really pissed off: being putting money in the kitty for 30 years but getting so little when we needed it

But you have £16k in savings so you didn't need any benefits surely?

Surely this was only because you had used your personal tax allowance in the time that you were employed this financial year

Why shouldn’t I claim as I have paid tax and ni for 30 years? those savings would quickly run out if I didn’t find a job reasonably soon; as I need to pay mortgage.

Meanwhile; if I spent every penny I earned and just and rented, I would be recieving full universal credit, housing benefit, child tax payment, council tax refund etc etc

Not yet: (I’m sure I will at some point now that I’m thankfully back working)

Tax and NI payments aren't like a savings pot that you pay into and claim back when you need 😂

You even say in your OP you saved for emergencies as you know benefits wouldn't pay your mortgage and yet you seem surprised you couldn't claim benefits? Of course the savings would run out, that's what savings for emergencies are there for, to be spent when needed in an emergency like losing your job

can you genuinely not understand why I’m annoyed to pay for others to recieve benefits, yet what I recieve when I need them is very limited.

If my savings ran out; then I would lose my home. Whereas if I was renting I would get housing benefit.

Are you saying benefits/welfare state should be increased?

I’m inclined to agree tbh, I don’t understand how anyone can live of £93 pw especially if they don’t have savings.

So many ppl complain about benefits being too generous when in fact the reality isn’t great as you’ve found out.

For the record, I’m grateful I’ve never had to claim but have always been aware of how shit it would be if I was unemployed.

Contribution JSA is taxable, but is below your tax free allowances of £241 a week, so if you have handed your P45 to the jobcentre you should actually get a tax refund when you sign off. Failing that ask HMRC to issue a cumulative code to your new employer which includes the amount of JSA you had plus your earnings from your P45.

It’s classed as income do liable for tax like anything else

Benefits exist for people who are in a tight spot. They are not a savings scheme, neither are they a reward for saving or "doing the right thing".

But this is a different issue to you getting taxed on the benefit you are getting. Contribution based benefits are a thing. Are you getting income from elsewhere?

I think the issue here is your definition of 'need'. You are in the privileged position to be able to save over 16k and have a mortgage.
You also were employable enough to be in work again within 8 weeks. Lucky you its the first time in 30 years.

Well this is what NI used to be. Hence the word “insurance.” OP is correct that the contributory principle has been eroded over time and today the welfare state is pretty worthless if you find yourself unemployed with savings, no matter what contributions you have made over a working life. Whether that’s fair or not comes down to your political opinions.

If you ran out of savings then you’d be entitled to more money. You’ve saved for an emergency and that was your emergency, yeh it sucks having to spend it but that’s what it’s for. You can’t expect to sit on a lump of cash and be given lots of money so you don’t have to spend your own

No you wouldn't. Rent is taken into account for UC.

I recieve a pension because of ill health. All of it is taken in to account. Like you I have a full NI record. So I have paid in to two systems.

Everyone’s unemployment benefits count towards their tax allowance and have for as long as I can remember. I’m astonished you didn’t know this.

Thanks for explaining this better than I could. NI was supposed to be an insurance that people pay in return for money in their time of need

Well; in fairness. I’ve never been unemployed before or had to claim benefits.

What did you expect and how much did you expect when you became unemployed?

Loads of angry, unsympathetic people on here. It's crap that there's so little support for people who have a temporary problem. It doesn't mean others don't have it worse

Honestly, no idea how much I expected. But not £93 a week. And certainly not for that paltry amount to be taxed

But it's only taxed because your income this year will exceed the tax allowance.

If your income this year is below the tax allowance, then it wouldn't be taxed

But everyone is entitled to their personal allowance tax free before they start paying income tax, so unless you have already earned that you should get it tax free (or get a refund later)

I agree with you.

people forget that you have worked hard.

You have used benefits as a safety net and not a hammock which is exactly what they’re there for!

It’s not “free money”. I’ve paid tax and NI for 30 years