Should Tax Credits Be Means Tested?

[Octopus]

I've got a bee in my bonnet about tax credits - they are handed out to millions on the basis of the number of hours you work, the number of kids you have and your income......

.... but they are not means tested, so in the case of an absent parent paying maintenance, this is not included in the "income" of the household

..... they do not make any assessment of "need"

My very real example (my misses mate)

Her income £1100.00 per month (for working 20 hours per week)
Tax credits: £500.00 per month (2 kids)
child benefit £130.00 per month

So you think £1730.00 - it doesn't sound much BUT......

..... the absent dad pays £800 per month

..... the house is owned outright

So her income is £2530 after tax per month - yes that's right £2530 per month (actually its more like £2582 as tax credits and child benefit are paid every 4 weeks).



I know all this because she has the chance to get a better job (doing 30 hours per week) and needed me to check she would earn an extra £400 per month.....

She's just had a foreign holiday, whereas we (yes we both work and as we earn "too much" we don't get any tax credits), we have just had a staycation at a friends house.....

Doesn't seem right to me

 

[Dan]

This is terrible. The system is screwed. I know a few people well enough off for them not need their handouts.

Including some tv presenters who work less than x hours!

 

[Andy78]

I have to say that I would not be where I am today without working tax credits. Certainly not self employed and possibly not with this roof over my head.

They took up the slack between redundancy and scratching out a business from nothing. Things were very slow to build for my first couple of years and I feel certain that without working tax credits I would have been back on the dole, waiting it out for a job to come along when there weren't any.

It allowed me the freedom to provide for my family whilst build up a workable business. As I earned more the tax credits went down, so I was on a stable income, albeit a very modest one, but at least I knew where I was.

On the other side, as in Murdoch's example sometimes it doesn't work. If it puts people in a position where they will be better off if they work less then it is obviously not conducive to an economically productive society or the health of the govt budget.

I agree that more factors need to be taken into account when dishing out the monies. When I was on jobseeker's allowance straight after getting made redundant, I was given forms to fill in to see if I could receive income support and other benefits. This form was almost as thick as the regs book ! It asked everything. Every bill outgoing, savings, investments, bank balances, lodgers etc. I have no idea why the same scrutiny is not placed on those who are working albeit part time. I did not even apply for working tax credits, they just started going into my bank when I declared myself self employed and signed off jobseeker's allowance.

 

[Adam W]

It always seemed unfair to me how you can only ever get working tax credits if you have children. It has been mentioned in the past that some companies relied on working tax credits to top up their employees' salaries so they could pay paltry wages, well that only applied to women with children - young single childless people who had bills to pay and could only get that kind of job were just expected to get by.

In the debate over changes to doctors' working patterns with regard to providing effective 24/7 healthcare, some women doctors have complained that the new contracts are 'sexist' because they will mean they have to work weekends to care for the people who have the gall to get sick out of school hours; in a radio interview one even described them as "blatantly sexist" because apparently it discriminates against anyone with children, ie women.
Would this not mean that working tax credits are also (blatantly) sexist?

 

[Leesparkykent]

It always seemed unfair to me how you can only ever get working tax credits if you have children. It has been mentioned in the past that some companies relied on working tax credits to top up their employees' salaries so they could pay paltry wages, well that only applied to women with children - young single childless people who had bills to pay and could only get that kind of job were just expected to get by.

In the debate over changes to doctors' working patterns with regard to providing effective 24/7 healthcare, some women doctors have complained that the new contracts are 'sexist' because they will mean they have to work weekends to care for the people who have the gall to get sick out of school hours; in a radio interview one even described them as "blatantly sexist" because apparently it discriminates against anyone with children, ie women.
Would this not mean that working tax credits are also (blatantly) sexist?

why would working tax credits be sexist?.........its based on the income of the couple, single dad or single mum.

 

[Andy78]

You don't have to have children to get working tax credits. But you do have to be over 25 and working 30 hours.

Child tax credit is awarded to those who have children on top of their working tax credit. It was always itemised when we were in receipt of the credits.