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

Well, many of the other benefits are not classed as income.

and I reiterate: I am a tax payer. Pay the higher rate of tax. Don’t recieve child support etc. I’m contributing: and so yeah, I expect to get something when I am not working.

To have that £16k in the bank, I’ve budgeted and saved every month for 30 years. I’ve not splashed every penny I earn. I’ve not just been handed it.

Yes, it was the income contributions type JSA. I actually have a new job now. I applied for over 100jobs and took job seeking really seriously.

Are all benefits not taxed if they bring you over the personal allowance? I wonder what the rationale behind that is?

I agree it's disheartening OP, I sometimes wonder why I bother saving and paying into a pension and not racking up an instagram lifestyle on a credit card but I'd rather have my life so let it go.

I mean in reality it's £98 a week - it you are a higher rate tax payer that isn't going to touch the sides of your monthly expenses. So you would have had to have saved anyway. Saving means you had freedom from worry when you were made redundant and the space to apply for jobs you wanted - that is worth it.

Seriously, don't waste your life being envious of people who have to claim income related benefits - you can work, earn well and save. This gives you have the freedom over your life and choices in a way people who are long term dependent on state benefits will never have.

YABVU.

It sounds as if they have applied an emergency tax code to your JSA.

As they often do in a new job.

So you will get it back if you don’t exceed your personal allowance this year. And you have your savings as cash flow in the meantime.

It is wholly reasonable for JSA (or any other benefit) to count towards annual income for tax.

State pension counts.

Your tax got used to pay for things that you benefited from; roads, health, defence, education, policing etc.
NI is used for child benefit, maternity benefit, your state pension.
It goes to "the greater good".
It's not a private savings scheme.

@RantzNotBantz that is a good point - one tax year I worked two months in higher rate tax job, got made redundant with a lump sum payment (mostly not taxable) and three months pay in lieu of notice (which was taxable), claimed contributions related JSA for three months and then got another higher rate tax job. It sent HMRC in to meltdown but it did all come out in the wash and I think ended up with a small rebate.

It's really disheartening reading this thread, not only that the OP can't seem to grasp the tax and benefits system, but that she seems so nakedly envious of other people having anything.

The £90 a week that she despises so much would seem like a fortune to some other people.

I am retired now, still pay tax, and I sincerely hope that part of that tax pays for a modest, decent lifestyle for those who have to claim benefits. Not those who feel entitled to hoard house deposits. Doesn't she know that helps to fuel house price inflation?

Now that you’re retired, do you receive the state pension? If so, lucky you. I honestly don’t think I’ll be receiving that

And as for hoarding house deposits: house prices have risen under the boomers watch: it’s your generation that mostly benefited from them. Our first house cost £125k, whereas our boomer neighbours cost £5k. So yeah; I’m making sure that my son at least gets a deposit as he’s unlikely to get any inheritance

In Sweden if you choose to you can pay into the job protection insurance scheme. If you do so any you are made redundant you get 80% of your previous earnings for 2 years. If you haven’t paid in or haven’t worked you get nothing from the scheme. There may be other benefits available but they would not be generous as people are supposed to be working.

This would be a far better way to operate benefits in my opinion as it wouldn’t penalise the worker for having been sensible and saved. It would also insure the redundant worker is given enough to cover their likely expenses.

Be grateful you haven't worked hard, taken risks, lived in dodgy places to try to have a decent pension to have it taxed at 40%!

Have I called you names? There are many I could think of. I do get a state pension, I also started working at 15. It was completely legal to pay me less than a male doing the same job. I had 6 weeks maternity leave. My employer was under no obligation to take me back after that. My NI contributions paid for the pensions of people older than me in the same way that your contributions help to pay for mine. If you don't think that you will get a pension look to blame people younger than you, not older. They are the ones who will decide not to pay it.

Maternity leave sucks also, paid into the pot …from I could work, I did work, they give you a Year but pay you a measly £184 a week for only 9 months. I’ve no choice but to go back after the 9 months

My parents paid into the pot from very young, died before they could claim their pension.

make it all make sense!!!

Since when is a pension taxed at 40%?

I think a lot of people deil to understand how pensions work. Money is taken - untaxed - from your monthly salary to go towards your pension. The money instead is treated as income earned in the year in which it is drawn down. Because it wasn’t subject to income tax when it was earned in 2005 (for example) it is subject to income tax when it is drawn down in 2025.

Even then it isn’t subject to 40% tax. You have a nil rate band of £12,633 then income up to £50k is taxed at 20% and anything ABOVE THAT is taxed at 40%. Which is fair enough really as this money wasn’t subject to income tax back in 2005.

It’s taxed. There’s nothing “lucky” about paying NI contributions for the best part of 50 years and then the government fulfilling its side of the social contract. You take great exception to anyone referring to your “luck” and are correspondingly envious of other people’s.

Why would she if she’s always worked and never had to claim it?

I know it and I’ve always worked and never claimed it. How did I manage it and she didn’t?

No; you haven’t called me names. Boomer is a reference to a generation: not an insult!

and the Boomer generation were very fortunate that they got to receive a decent state pension, many of them from the age of 60. Many have took more than they ever put in

at the earliest I will receive one at 67. But, that looks increasingly unlikely

It’s not something that I’ve had to know to be fair!

Ah, so you want the government to uphold their side of the bargain, but I’m greedy for wanting the same for me?

Did I say that? Did you even read the post you quoted?

I didn't know this! My husband was made redundant and was unemployed for roughly 4 months. Lost the tax free childcare element for working parents so faced higher bills on top of managing all other bills on just my salary. Don't blame you for being pissed, I certainly am! Will look out for that letter :(

Lost the room?? Everyone, however much savings or income is entitled to contribution based JSA (New Style JSA) as long as they have paid the appropriate NI. Some people need to claim so they get the NI credits.