From the BBC:
But ministers claim that the welfare reforms, far from pushing people into poverty, are helping them escape it by encouraging them into work. The number of workless households is at a record low and the proportion of lone parents in work is at a record high of over 63%.
We will have to take those statistics as a given; the flip side is that terms of employment (low wages, zero hours contracts etc) at the bottom end are worsening.
It won't have been easy for many, but the offer of working tax credits if you are employed for more than 16 hours a week has encouraged tens of thousands of lone parents into jobs. That is what welfare-to-work policy is all about.
1. Labour introduced Working [Family] Tax Credits back in 1999. Why would it suddenly start working now?
2. The extra you can receive if you work 16 hours a week is not necessarily the headline figure of £1,960 a year, because it is reduced by 41p for every £1 you earn over the first threshold of £6,420 a year.
For example, 16 hrs x £10 x 52 weeks = £8,320.
£8,320 minus £6,420 = £1,900
£1,900 x 41% = £779
So in this case, the WTC you get is £1,960 minus £779 = £1,181 = £22/week.
3. Your Housing Benefit and council tax rebate is also reduced, probably by more than £22 a week, plus hours of hassle filling in the forms, minus the expense of travelling to work, organising child care etc.
4. And all this compares to £73.10/week Income Support a lone parent can claim if not in paid employment, plus probably most of their rent and council tax paid for them.
5. What also riles is the notion of "tens of thousands", there are five million working age households claiming some benefits or other (as well as seven million pensioner households, of course), "tens of thousands" is not statistically significant.
"Work is the best route out of poverty," the Prime Minister has said. But David Cameron is not the first PM to make such a claim…
6. It's a truism.
7. Fair play to the Tories for increasing the personal allowance for income tax to alleviate the poverty trap slightly, but they haven't increased the threshold for National Insurance, which is just as important, so this is a gimmick.
8. For some reason, the Tories appear to have singled out Working Tax Credits as something which they'd like to reduce significantly.
Sunday, 28 June 2015
From the BBC:
My latest blogpost: Welfare reform: wilfully misleading reporting by the BBCTweet this! Posted by Mark Wadsworth at 12:20