Tax Benefit Model Tables (1)

The DWP update these every year, a few months in arrears. These tables show how much tax and National Insurance people from different household types have to pay and what benefits they are entitled to. The version for 2007-08 appeared recently.

Before anybody - wherever they are in the political spectrum - talks about tax or benefits, I warmly recommend that they familiarise themselves with these tables, and try and do some like-with-like comparisons.

My choice for today, for you all to feast your eyes on, is Table 1.1d "Single earner, aged over 25, LA tenant, entitled to 30-hours WTC" (page 19 of pdf, page 17 of paper version).

a) If this chap or chappess works for 30 hours a week on the National Minimum Wage (£160.50 gross), his or her net income after housing costs is£98.53. If he or she doubles their gross income, their net income after housing costs increases to ... (wait for it) ... £127.47.

b) If this chap or chappess earns just under £175 per week, the tax and National Insurance they pay nets off exactly with the WTC they can claim (£19 each way) ... er ... why not just increase the tax-free personal allowance to £9,125 and have done with it?

So the next time a Nulab politician starts yapping on about the NMW and WTC 'making work pay' just remember that are talking out of their arses.

Or indeed some crusty Tory starts talking about time-limiting benefits to chivvy people into work, just remember that benefit claimants are economically rational - once you have got your benefits sorted there is little point in working.