A worker on £40k per year is £39 pw better off than his unemployed counterpart.

[orwellian]

I find this astounding.

A nuclear family in one of the outer London boroughs (2 parents, 2 kids) with husband sole breadwinner will have an income of £30,007 (£577 per week) on a £40k wage plus child benefit of £1,750 per year or £33 per week. Council tax is approx £30 pw. A travelcard from zone 4 into town is £43.60 per week.
Pay in full for school meals.
Pay in full for prescriptions.

Weekly total (minus council tax and travelcard) of: £536.

A nuclear family where both parents are unemployed in London would get;

child benefit x 2: £33
child tax credits x 2: £115
2 bedroom LHA allowance (outer London) of: £236 or 3 bed if children are different sexes and over a certain age: £300
income support/jobseekers allowance: £112.55.
No or little council tax to pay.
Free school meals.
Free prescriptions.

Weekly total of: £497 (2 children both same sex) or £560 (if different sexes or one over ten).

So, the household with one earner on £40k per week is at the most £39 a week better off than their unemployed counterpart and the unemployed family is not affected by the benefit cap unless they claim the 3 bedroom rate of LHA.

Work really doesn't pay does it.

Soul - it probably does mean that.!!! I am often the stupid one on here!

Anyway - thank you for discussing it with me. There was me thinking I had come up with the answers to the countries problem and everybody ignored me except you - so thank you.!!!!!!!! Obviously it wasn't as good as I thought!!!!!!!!!!!!

Thanks Frog. Say a small company is not making any profit, why not reduce their vat bill to 10% or less if the company paid the saving to the staff.

Another stupid thing is business rates are killing many small and family owned businesses. These family owned businesses in many circumstances
only have enough to pay their staff "CRAP"wages.

I know of families who own business that have been going 75 years plus who "EVEN KNOW AFTER THE SUPPOSED RECOVERY" are not taking salary's these long established companies are fighting for their survival.

soul - its rubbish isn't it.

There is so much that is wrong that it is hard to know where to start.

The problem is that the councils probably cannot afford to cut business rates as their budgets are being slashed all the time too. There will come a time I should imagine where we have to pay for some of the basics in life such as bin collections as councils won't be-able to afford to pay it out of what they get. The council priorities will always have to be services for those who can't help themselves such as child protection, schools, social care, benefits, council housing etc. For those in work the services they receive may have to be paid for I would think. Then it will get even harder.

I think in parts of Ireland they pay for bins.

Soul, Say a small company is not making any profit, why not reduce their vat bill to 10% or less if the company paid the saving to the staff
Firms would employ some creative accounting procedures and file accounts showing they were breaking even. VAT is paid by customers to the firm, the firm then pay this on to HMRC so reducing VAT to small firms wouldn't necessarily benefit the firm. It would, of course, mean they could perhaps undercut larger rivals by charging a lower overall price.

House prices are high here and wages are very low. Very rare to encounter anyone on 40k. Average hoise price is 14 times income

We are on 32k between us and I would describe us as affluent compared to the vast majority

£300 JSA?
The couple rate is about £120.
I smell shite.

I agree with everyone who has said the issue is not with benefits but with wages. We have artificially suppressed wages - maybe partly related to our credit culture and because home owners have become dependent on property price inflation to provide them with cash rather than lobbying for better wages.

There are also huge benefits with being an earner that those on benefits do not get:

• pension contributions
• private medical cover
• sight test vouchers
• maternity leave
• childcare vouchers
• sick pay
• death in service benefits
• support and infrastructure.

I would take that £39 any time. (not that I believe those numbers add up)

rates on small businesses are weird, its councils taxing oeople on low incomes and irregular salaries so that duffers in nice suits can have big pension plans and bice workibg environments. Cuts mean..oh no we must raise more money from the businesses that can't object. . so they go out of business and bigger businesses in out of town sites who can resist get better deals.. its all about pushing money upwards at tge moment. ..

I got out and looked at this year and last years tax credit award.

2013-2014 I've told them I will earn £2500 more than the previous year 2012-2013.

I assume this takes me above a special threshold... As my tax credit award is now less £4500 than last year.

My pay rise and promotion has actually meant I'm £2000 worse off.

I don't blame the unemployed or the people who earn less, I blame the stupid system!

No, the numbers do add up - he hasn't counted the CTC twice. However, if like I say you discount housing benefit (which goes to the landlord) our hypothetical unemployed family's income is £261 pw. If you make the deductions I stated ie that they are paying some rent, some council tax and say £10 a week transport costs from that, they are left with £198.05 which sounds like a lot but that's for four people and will have to cover all household expenses, bills, food, clothes etc.

The figures in the op are right.

Cb is not deducted from Income support either. You get the 70 odd pound (single person amount) plus the cb and tax credits.

Why is it when people want to talk about how much benefits actually are, others accuse them of getting the numbers wrong?

It must be really hard for people to hear the truth.

I think the numbers do stack up. Once the figures are worked out there isn't a lot there for a family of 4.

The simple fact is that in the same breath there isn't a lot left from a £40k wage for a family of 4 either - particularly as to work costs quite a lot of money in real terms (running an extra car for anybody rural, travel, parking, suits or work clothes).

I just did an entitled to on myself to see if I could afford to live without dh income. If I reduce my working hours to 20 and earn £18k, I will receive over £14k in benefits (mixture of tax credits and housing benefit). That's equivalent to a wage of £32k for working 20 hours a week. In real terms it is equivalent to more as the benefit part of the income would be tax free.

If I was in this situation why would I choose to work full time for a wage of £32k when I can get that (and the extra due to it being tax free) for not working full time.

The system is very odd.

All figures in above post made up of course. Just did another one based on having a dh and it isn't so successful. Guess I will just have to get rid of him then!!!!!!

I really don't think that it can be stressed enough that the problem isn't with benefits (people have got to be able to live) but with the high cost of living and the low wages.

frogwatcher - Most people would prefer to be working full time with a dh than being single on benefits with no prospects

Agree entirely that we are becoming a low wage economy with a high cost of living. And the biggest cost of living is housing - as seen in the example worked out in the OP, housing benefit is their biggest chunk of income, and that will just get passed on straight to a landlord. There are £billions every year going from public funds to private hands in this way.

And to the poster who said the op incorrectly doubled the tax credits ...

When I was unemployed with 2 DC 4 years ago I got £100 per week tax credits. So it sounds about right for it to be just a little over that now.

Olive - I think it is naive to assume that working part time and getting benefits in the form of working tax credits and housing benefit means you have no prospects. You have the same prospects as somebody working part time with a dh in the background, but not getting benefits due to the second wage.

I also think you are wrong re most people wanting to work full time with a dh. There are many of us that choose to work part time. Also there are many women who choose not to have a dh - they are not single simply because they cannot find a dh!!!!! If I had my time again (and it is still a possibility now!) I would choose to not have a dh!

Definitely changed. I first claimed benefits in April 2004. I think this was when the changes happened because I remember it really mattered if my DD was overdue or not ( she was).

Cb was not deducted then and again when I had to claim 4 years ago it was the same.

Definitely changed. I first claimed benefits in April 2004. I think this was when the changes happened because I remember it really mattered if my DD was overdue or not ( she was).

Cb was not deducted then and again when I had to claim 4 years ago it was the same.

I work part time as a solicitor and receive tax credits. How interesting to learn that I have no prospects.