Can anyone explain the logic of this please?

Growstuff I can assure you my AC earns nothing like that, nor do colleagues, for doing a difficult stressful job.
The subject came up when they were all saying how they would miss the £20 as it enabled them to eat decent food for a change.

Private landlords are taking the piss, but regulating that wouldn't help those who own their homes.

I'm sticking with what I wrote previously. If wages increased, the claimants would receive less, so wouldn't benefit. The extra wages would still go to landlords.

What’s wrong with that ? It’s called paying your way.

* It's a mistake to think people are being "topped up". The Universal Credit element most people receive is for rent. The Local Housing Allowance has just been raised (about time!), but that money is paid by the claimant to the landlord.*

But they ARE still being topped up. If employers were paying a decent wage there would be no need for UC at all - rent element or otherwise. What might help is a cap on the rents landlords are able to charge at the expense of the tax payer. Most elements of the benefit system are means tested, so why not means test landlords by clarifying how much of the rents they are charging are actually justified and how much is profit. IMHO landlords are taking the piss out of the benefit system at the moment but no-one seems to want to address the problem. But then I suppose, realistically, we can’t expect a Tory government to do much about it.

growstuff

Maizie NICs don't depend on the hours somebody works, but the amount.

Anybody earning £184 (or more) a week pays NICs. That works out to just over 20 hours a week on minimum wage. but would obviously be fewer hours if the person earned more.

I told you. I was working it out on 16 hours paid at the current minimum wage of £8.42 per hour. I am not altogether stupid you know.

The total cost of Universal Credit was about £8 billion in 2018 (couldn't find a later figure). Most of that goes towards housing costs. Rather than concentrating on the amount paid towards individual claimants and the amount they earn, it would be more effective in reducing poverty, if rents were to be reduced and that can only be done on a national scale by building more rent-controlled social housing. UC is currently subsidising high rents.

nadateturbe

Can I just say one of my children works full time in the Civil Service. Every colleague with children is in receipt of UC and finding it hard.

Do they seriously discuss how much they receive in benefits? They receive a small amount instead of the old Child Tax Credit, which was paid on a sliding scale to people earning about £40,000pa. Historically, it replaced the former tax free allowance for children, which always was a form of state aid for people with children and was paid by employers.

Doodledog

Anyway. Re the question of who gets the UC money- is it not the case that without it the claimant would have to pay the rent out of their earned income, so would not be able to live on the remainder, which brings us back to what I said in my post of 00.21? However the money is divided up, employers are getting ‘taxpayers’ money’ to enable workers to make profit them.

Firstly, every single person in the UK (unless they live off-grid) is a taxpayer!

Secondly, of course employers are making a profit - they wouldn't be in business if they didn't. What about public services? They don't make a profit - and many millions have public service jobs. Paying them more would cost the "taxpayer" (ie all of us) more.

Thirdly, rents and the cost of housing are the big problem. The way UC is calculated, almost nobody gets anything for the "work" element. They get UC for children and for rent. Would you pay people with children (they only receive it for two) and high rental costs more?

I'm sticking with what I wrote previously. If wages increased, the claimants would receive less, so wouldn't benefit. The extra wages would still go to landlords.

Can I just say one of my children works full time in the Civil Service. Every colleague with children is in receipt of UC and finding it hard.

Anyway. Re the question of who gets the UC money- is it not the case that without it the claimant would have to pay the rent out of their earned income, so would not be able to live on the remainder, which brings us back to what I said in my post of 00.21? However the money is divided up, employers are getting ‘taxpayers’ money’ to enable workers to make profit them.

I don’t know how that last post got there. I thought I had posted it hours ago. Maybe it got stuck in a time warp?

It’s almost as if the people profiting from these bailouts are more likely than the low paid to be political donors, isn’t it?

Regarding NI contributions, people often like the idea of the threshold being raised so that they don't have to pay, but in fact it saves employers a lot of money, and the workers are unable to claim sick pay, maternity pay, JSA or a pension without enough contributions.

I agree. Unfortunately, too many people don't realise what they're losing if they don't pay NICs.

Doodledog Please look at the details of eligibility for Universal Credit and the way it works. I'm not disputing that employers get away with paying as little as they can while paying as much as they need to get the staff they need. However, generally it is not the employers who benefit from their employees' Universal Credit. It wouldn't make any difference to employers, even if employees were paid more benefits. Hardly anybody receives the work allowance of Universal Credit - it's almost impossible for self-employed to receive any at all. It's a mistake to think people are being "topped up". The Universal Credit element most people receive is for rent. The Local Housing Allowance has just been raised (about time!), but that money is paid by the claimant to the landlord.

Hard to know how to put the onus back on employers to pay a living wage considering the amount of time state supplementation of wages has been going on. UC is nothing new, it’s just the latest manifestation of the old Income Support and the Supplementary Benefit of the 70’s and early 80’s.

growstuff

Doodledog

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, and the taxpayer, who has been taught to complain about 'paying for' those on benefits, is still paying the bill, but instead of their taxes benefiting society, they are going into the pockets of unscrupulous employers.

Most of the money is actually going to landlords.

A person with no children working 20 hours a week on minimum wage will only receive help towards rent, which possibly won't be covered anyway.

But the employer will make more profit if they can pay workers less, and they can still live (however frugally) on the topped up income. If they couldn't live on it, employers wouldn't find people willing to work, and at least some voters would realise that it was unconscionable to force people to work for starvation wages, even though foodbanks are also picking up some of the slack.

Regarding NI contributions, people often like the idea of the threshold being raised so that they don't have to pay, but in fact it saves employers a lot of money, and the workers are unable to claim sick pay, maternity pay, JSA or a pension without enough contributions.

Maizie NICs don't depend on the hours somebody works, but the amount.

Anybody earning £184 (or more) a week pays NICs. That works out to just over 20 hours a week on minimum wage. but would obviously be fewer hours if the person earned more.

Oh, sorry, growstuff, I've somehow quoted the wrong post. It was your post at 23.15 I was responding to.

growstuff

grumppa

But Boris has announced that we are going to be a high salary economy! I take this to mean that that those who are poorly paid will be replaced by robots, drones, etc., and the managers will be paid more. Thousands more will be unemployed, but average salaries of those in work will have risen.

Another pledge honoured.

That's exactly how it will work.

I was doing my (rough) calculations on someone earning the current minimum wage, growstuff

Doodledog

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, and the taxpayer, who has been taught to complain about 'paying for' those on benefits, is still paying the bill, but instead of their taxes benefiting society, they are going into the pockets of unscrupulous employers.

Most of the money is actually going to landlords.

A person with no children working 20 hours a week on minimum wage will only receive help towards rent, which possibly won't be covered anyway.

grumppa

But Boris has announced that we are going to be a high salary economy! I take this to mean that that those who are poorly paid will be replaced by robots, drones, etc., and the managers will be paid more. Thousands more will be unemployed, but average salaries of those in work will have risen.

Another pledge honoured.

That's exactly how it will work.

MaizieD

It is to the employers advantage to keep hours to 16 pw if the employee is on minimum wage because neither has to pay NI contributions. They are also earning below the income tax threshold, so the employer doesn't have to collect that, either.

This may alter slightly when Johnson's minimum wage increase is implemented as it is a rise of 70p per hour.

NICs depend on the amount a person earns.

My employer and I both paid NICs when I briefly worked part-time (under 16 hours) because I was earning over the lower earnings limit.

Universal Credit doesn't work the same way Working Tax Credit did. Claimants are expected to work or to look for work for 35 hours a week (unless you are the primary carer for a child aged under 5, a disabled worker or a carer). There is no advantage or disadvantage to working 16 hours a week. It's the amount of money you earn, your commitments (eg children) and rent which matter.

It is to the employers advantage to keep hours to 16 pw if the employee is on minimum wage because neither has to pay NI contributions. They are also earning below the income tax threshold, so the employer doesn't have to collect that, either.

This may alter slightly when Johnson's minimum wage increase is implemented as it is a rise of 70p per hour.

I’m trying to understand this. Supermarkets often employ people for about 16 hours a week ( the number of hours that must be worked to claim working tax credit? ) on minimum wage. The amount these people earn is not enough to live on so they can claim various credits. If they were on 35 hour week contracts would that take them above the wage to get these benefits ?

So is the answer to only employ staff full time which will disadvantage people who want part time work, maybe around school hours or while studying?

Apologies if I’ve misunderstood the economics, I’m just trying to get my head around the issue.

I wonder if the carers at my Mums care home, who are paid the living wage which is more than minimum wage, still get these benefits from the government to top up their income.

Callistemon

FarNorth

It's to massage the unemployment figures by having a large number of people employed for very few hours per week.

Yes, I think even if it's one hour per week it is counted as 'employee' if it is paid.

Technically, it's 2 hours per fortnight. I've looked it up a time or two and am shocked each time.