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Tax credits - working more then 16 hours? Is there a point


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Old 24-02-2010, 12:34
Stralis
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There seems to be alot of posts on this forum moaning about benefits, and I would like to point this out.

Mainly the fundamental flaw of actually encouraging people to put in the extra hours once they have made the transition from income support to work with help of tax credits.

I will not list figures in depth but I was stunned at what I found.

Basically the difference between working 16 hours a week - and 25 hours only resulted in an overall increase of 19 a week... for 9 hours extra work.

If those hours go above 35, at 6.60 an hour - the threshold for help with council tax and housing benefit will be breached, so that will be lost, and earnings increased result in lower tax credit help.

I appreciate that these benefits are there to help out during the transition of going back to work, to help families back on their feet should things be tough, but really... when it comes down to it.. Unless the job your in is definatly going to lead to a way for you to completly earn over a certain ammount of money - what is the point?

Every penny earned in one hand is taken away by the other - as the government has laid down a figure of how much is required for you to live on and will make up that figure via these channels.

EDIT - I forgot to mention that someone working 16 hours on less than approx 6.50 an hour would not be making TAX or NI contributions. (They dont earn enough)
Yet over 25 hours they would earn enough money to pay both TAX and NI.

Are we going to see a ton of folk, who have been kicked off income support due to their children being aged 7 and above enter a slump where working above 16 hours.. just simply is not worth it! Especially if these jobs pay minimum wage - with no real future prospects, training or opportunities to ever reach a salary that matches the government cut off point.

(Currently housing benefit / council tax benefit is approx...
If your income is more then this you get no help)

for 1 child, 2 adults - 9,560
for 2 children, 2 adults - 11,980

The tax credits figures seem to vary on previous years earnings, current earnings and dependants - so I cant give exact figures here.

I wonder how bad the system is for single people, with no dependants. Do they even get any help if they work a minimum wage job? I know they have to work a minimum of 30 hours to qualify for tax credits. - Once again, is it worth upping that 30 hours to 40?
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Old 24-02-2010, 12:46
tghe-retford
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I wonder how bad the system is for single people, with no dependants. Do they even get any help if they work a minimum wage job? I know they have to work a minimum of 30 hours to qualify for tax credits. - Once again, is it worth upping that 30 hours to 40?
No chance, other people who do the same job I do have already faced cuts in their hours. Under 30 hours and as far as HM Revenue and Customs are concerned, you can go jump. A double whammy if your employer has asked you to drop below 30 hours to keep their job, you lose both wages and tax credits. An utter joke, and its difficult enough trying to get one job, let alone two to keep a roof over your head! The threshold for benefits as a single person is very low, even a part time worker or minimum wage worker on low pay wouldn't be eligible for the likes of Council Tax and Housing Benefit because they earn too much!

Upping the threshold to 40 hours would put many workers further into poverty, because employers are not going to up hours for workers, particularly when the talk is of cutting hours, pay and redundancies. All Government staff who work a standard 37.5 hour week and claim Working Tax Credits would lose out. The threshold needs to come down to 16 hours a week, or at least less than 30 hours a week.

Working tax credits are a joke and personally I would like to see them axed and replaced with changes in Income Tax so everyone benefits and no-one is discriminated for their choice in how they work.
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Old 24-02-2010, 12:49
tysonstorm
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I find it funny that if you work 16 hours or 30 hours+ you are entitled to some form of benefit. So you can imagine my supprise that because I work 28 hours I'm entitled to bugger all. I have even worked out that if I worked 2 more hours a week, I'd get around 15 a week benefit. It's crazy.
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Old 24-02-2010, 12:54
SheepdogNo1
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The tax credits system is just another new Labour state employment scheme. It just serves to keep 900 Geordies off the dole. Quite what they do except send 10 copies of the same letter out the lord alone knows.

Me & Mrs Sheepdog get them, why not just alter the tax system or just pay nursery direct & save the hassle? But no , another layer of paper shufflers / phone answerers is needed to administor this nonsense & what they spend in postage must add up to a sizeable amount. Not to mention phone call costs & postage in returning information to them. Its just a total paper chase & the sooner its axed the better.

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Old 24-02-2010, 13:00
newwoman
 
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The tax credits system is just another new Labour state employment scheme. It just serves to keep 900 Geordies off the dole. Quite what they do except send 10 copies of the same letter out the lord alone knows.

Me & Mrs Sheepdog get them, why not just alter the tax system or just pay nursery direct & save the hassle? But no , another layer of paper shufflers / phone answerers is needed to administor this nonsense & what they spend in postage must add up to a sizeable amount. Not to mention phone call costs & postage in returning information to them. Its just a total paper chase & the sooner its axed the better.

Totally agree, they are bloody useless too.

Spoke to them a few times when I was on the unpaid part of ML and got a completely different answer from each person I spoke to.
In the end, I discovered I could have claimed while on ML but it was then too late and they don't accept backdated claims despite the fact my claim was late due to them giving me the complete wrong information in the first place.

If Gordon really wants to help 'hard working families' as he drones on about, why not just hange the tax codes which would save money, time, admin, red tape, paper etc?
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Old 24-02-2010, 13:08
squidsin
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Why are they even called tax credits? A lot of the people who get them don't work at all, so they're not getting tax they've paid credited back, they're just getting another form of handout.

Maybe I am being dim, but I am not sure I get the point of the OP's original post. Is he saying you ought to be able to work full-time and get benefits as well, instead of only being entitled to some help if you are working part-time? I know people who work f/t and who receive housing benefit, so I am not sure the OP's statement is true.
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Old 24-02-2010, 14:01
Stralis
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Why are they even called tax credits? A lot of the people who get them don't work at all, so they're not getting tax they've paid credited back, they're just getting another form of handout.

Maybe I am being dim, but I am not sure I get the point of the OP's original post. Is he saying you ought to be able to work full-time and get benefits as well, instead of only being entitled to some help if you are working part-time? I know people who work f/t and who receive housing benefit, so I am not sure the OP's statement is true.
The point I was trying to make, is that there is no insentive to get off your butt and work more hours then 16, as the government balances out the overall income.

If earning more money, and working more hours - means you get less benefits (but the overall yearly sum of total income stays around the same mark) - then why will people bother?

Also -

The figures for housing benefit are correct, and calculated from forms I have actually seen of relatives.

If Your friends are working full time and in recipt of housing benefit it may be that they have more then 2 children.. or they have an overall income less than -

for 1 child, 2 adults - 9,560
for 2 children, 2 adults - 11,980
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Old 24-02-2010, 20:26
roland rat
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I claim working tax credits when I can, but the system is unfair

2005-2006, I just started work, after being unemployed for 5yrs, so i was entiltled to the full tax credits allowance of 2100 for the year. I worked an average of 45 hr per week, and to my cost i found out, my entitlement was reduced to 50 per week, and I had already been paid 1200 in tax credits. Well the tax credit office wanted 1000 of this wtc back, I was now actully alot worse of

Tax credits for 2010-2011

Due to me working less hours last year due to poor health, my earning for this year are 9000, which means I should be getting tax credits this year, but only after i can confirm with the tax office, that I have a contract for 30 hr, currently I have a 26 hr contract

So if you work hard to pay bills, 45 hr per week, and have earnings of 12,500 PA, more or less you wont get working tax credits; how ever if you work less hours 26 hr per week, and have earnings of 9000 you will be entitled to WTC, but in doing so how are you meant to pay your bills,, as you dont have the same money coming in

It would be far better if the tax credits were added straight on to your tax allowance, so my allowanace without WTC..6450... and with WTC 8500, and the goverment dosnt even need to pay out on the tax credits, as yopu would get this through your wages
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Old 24-02-2010, 20:39
kyresa
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Totally agree, they are bloody useless too.

Spoke to them a few times when I was on the unpaid part of ML and got a completely different answer from each person I spoke to.
In the end, I discovered I could have claimed while on ML but it was then too late and they don't accept backdated claims despite the fact my claim was late due to them giving me the complete wrong information in the first place.

If Gordon really wants to help 'hard working families' as he drones on about, why not just hange the tax codes which would save money, time, admin, red tape, paper etc?


They backdate for three months from the date of the claim. How long after you went back to work did you put in the claim?


And the OP is right, I would be on the same money for working 37 hours per week as I am for working 16 hours per week with tax credits (and child tax credits) as a single mother! I'd rather work the two days per week and spend the rest of the time bringing up my son (who in the future will be paying into the pot for the current generations pensions so he'll be giving back that way!)

(And all those who moan about how bad I am etc etc and spending their hard earned tax can drone on as long as they like, I paid into the system at a very good rate for 20 years so it's MY hard earned tax money I'm getting back, not theirs!)
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Old 24-02-2010, 20:42
kyresa
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It would be far better if the tax credits were added straight on to your tax allowance, so my allowanace without WTC..6450... and with WTC 8500, and the goverment dosnt even need to pay out on the tax credits, as yopu would get this through your wages

so someone on 700 per month gets about 115 a week on top as tax credits (that includes the child element!!) by your method, they'd be getting only the tax back, so about 100 per month.

So low income families (be they single parent or whatever) will be much worse off!

Not everyone would use their tax allowance up to benefit from it!
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Old 25-02-2010, 17:52
incy wincy
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I find it funny that if you work 16 hours or 30 hours+ you are entitled to some form of benefit. So you can imagine my supprise that because I work 28 hours I'm entitled to bugger all. I have even worked out that if I worked 2 more hours a week, I'd get around 15 a week benefit. It's crazy.
You are entitled to working family tax credits if you work 28 hours a week. You just get a bit more for it. I think it's to encourage people to work nearly full time rather than just the minimum, or something.

The multiple copies of the letters bugs me as well! I get two copies, and my OH gets two copies. Sometimes we've had 4 copies each. Poor rainforests.
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Old 25-02-2010, 20:59
tysonstorm
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You are entitled to working family tax credits if you work 28 hours a week. You just get a bit more for it. I think it's to encourage people to work nearly full time rather than just the minimum, or something.

The multiple copies of the letters bugs me as well! I get two copies, and my OH gets two copies. Sometimes we've had 4 copies each. Poor rainforests.
I'm sure I could only apply for it if I was working 30 hours or more per week. However I did the online calculator and my results were 0.

Oh well. Nothing lost, nothing gained. lol
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Old 25-02-2010, 22:11
Angel Lisa
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You are entitled to working family tax credits if you work 28 hours a week. You just get a bit more for it. I think it's to encourage people to work nearly full time rather than just the minimum, or something.

The multiple copies of the letters bugs me as well! I get two copies, and my OH gets two copies. Sometimes we've had 4 copies each. Poor rainforests.
Tell me about it, i only open mine. My hubbys will remain in the ciupboard for companies who want originals lol.

I work part time (24hours a week) and i take home after tax and NICs, 642 and i get just over 500 a month in Tax Credits (Working & Child) - Thats NOT including Child Benefit (I dont see Child Benefit as part of income because it is for the child)

My husband has just started claiming JSA but he will only be entitled to 2.11 per week due to my employment. Once he gets a 5 day a week job, my children will have to go into a nursery so that i can keep my job.
The nursery i pass on the way to work which is in a good location due to where i work means its the only nursery available to get them into and the only nursery in the area which have places for my childrens ages.
They are asking for 744 per month and an upfront payment of that amount before they can start.

We dont have that kind of money and are not entitled to help towards the first payment from a government funded body due to me working. It stinks.

The way single parents get handled are totally different to married couples and if they think different - Try it and find out. I think its stupid that married couples who earn under 16,000 cannot get the same as a single parent family just because they are in a relationship.
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Old 25-02-2010, 22:15
newwoman
 
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They backdate for three months from the date of the claim. How long after you went back to work did you put in the claim?
About 6/7 weeks as I went back in Febuary and they told me I couldn't put in a claim until the end of the financial year.
When I did, they told me I wasn't entitled to anything because I was now working again but I should have claimed while I was off, even though when I did try to they had told me that it was based on the previous tax year and we weren't eligible.

Tbh, I got told so many different stories by each deifferent person, the whole thing made my head spin.
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Old 25-02-2010, 22:18
Angel Lisa
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I thought TC only backdated birth claims from the date you requested the form. I know this as i got a substantial first payment from them as it was nearly 3 months to me receiving the payment from requesting the form.
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Old 25-02-2010, 22:33
kyresa
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I thought TC only backdated birth claims from the date you requested the form. I know this as i got a substantial first payment from them as it was nearly 3 months to me receiving the payment from requesting the form.

Yup, I thought I wasn't entitled until a friend convinced me to phone up. I did a bit of reading up on the tax credits as well and saw that they do base it on the previous years income, but if you know there is a drastic difference in the previous year and the current year's income, then you can "estimate" and they will pay based on that estimate.

Of course the downside of that is that if you overestimate and bring in more, then they will take the extra money they paid back off of you.

My difference in earnings when I was on Mat leave vs the previous year was a cool 15,000!! A BIG difference.

I also got payments backdated 3 months from the date I requested the form. I actually missed out on a couple of months money because I thought it wasn't worth me claiming.
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Old 25-02-2010, 22:37
newwoman
 
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I thought TC only backdated birth claims from the date you requested the form. I know this as i got a substantial first payment from them as it was nearly 3 months to me receiving the payment from requesting the form.
I only know what they told me.

Tbh, they told me I would only have only got around 300 for the whole year I was off anyway and I just couldn't be arsed in the end arguing with them for the sake of 75 for the 3 months or whatever.
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