Wednesday, 25 March 2009

The Benefit Trap

An opinionated mother on how government hand-outs combined with high taxes make it uneconomic to work:

. . . when I return to work, I'll only keep 32 pence in the pound for every pound earned over the tax threshold.
22 p for tax 9 p NI and 37p lost from tax credits leaves only 32p. Whilst both of us earned money it was worth me working as I would keep all but the tax and NI. Whilst at the bottom of earnings, it is clear that the Government really makes it difficult for me to take more money home. I haven't even factored in affects on council tax relief and income based- jobseekers allowance yet (the information isn't available to work it out)or indeed the cost of working (transport, clothing etc).

So do not doubt it when people talk about the benefit trap - it's real.

2 comments:

OOM said...

I think the irony is that whilst you are well off: its worth working

the governemnt was also giving us money we didn't need whilst we were earning slightly over national average - I'd much rather have that money now!

OOM said...

oh and the numbers are slightly wtong - 20 p tax 11 NI ..still 37 clawback on Tax credits..same difference really.