Can anyone explain the logic of this please?

I was always sceptical about the tax credit system when still living in the UK.

I would not agree that its the same the world over. I can only speak of my own experience. I live in Belgium
And the system is different. They have a government set wages index according to job, age and experience. There are no tax credits to top up low wages . There are no wages that are so low that people can't live on it. To be honest, I think people live rather well here, not such a rich poor divide.

It is wrong that wages are so low that these benefits are necessary. A complicated system.

MissAdventure

It means that money paid to people on benefits goes straight into the pockets of people who may own multiple properties.
Then people complain about people on benefits.

I dread to think how much has been paid out in rent for the ex council flat above me, to people who live elsewhere, do little maintenance, and rarely even visit.
£850 a month, a good few years ago.

The people on benefits don't gain anything out of it at all, because the amount paid actually to the person is the same, across the board.
All of them have had to spend a good amount of the money meant for them, to pay the "top up", since the amount of help they can get is capped.

yup loads of 'taxpayers money' is paid to landlords via housing benefit, no one gives a shiny shit about it do they?

I was under the impression that private landlords don't like letting to anyone on benefits

Yes, sadly the very little help option is reality, for home owners and renters alike.
Having to pay a huge amount out of the money meant for your everyday costs isn't easy either.

There isn't anyone who is getting loads of benefits, contrary to popular belief.

It's hard on everyone.

very little help, MissA. My AC is very clued in and knows what is available. Selling is not a good option, only option is to struggle on. This is the situation for many. Sometimes its hard for people with children working full time to stay optimistic with this government.
The private rental market is a big factor imo.

It's not the same situation, so people won't get exactly the same help.
Do you think we should pay people's mortgages?
There are people who would be only too happy to point out that people shouldn't have taken on a mortgage for others to end up footing the bill.

The loan is cheaper than a credit union one, as well as every other option, and in reality only needs paying back if the property is sold.

A loan to help with the interest part of a mortgage is not the same as getting help with rent, though. IMO, governments should help all claimants equally.

I’m not sure of the rules now, but years ago a friend of mine left an abusive husband and was not allowed to use her share of the equity when they sold the house on another mortgage, as she had custody of two babies and couldn’t work. It all had to be spent before she could get supplementary benefit as it was called then, so it was used on rent. It set her back years, and some temporary help to see her through until she was on her feet would have made a difference to her life and those of her children. Her ex, of course, used his share as a deposit on a new place, moved in a girlfriend and never looked back.

nadateturbe

What help do they get with their mortgage MissAdventure?

As said, they can claim for a loan to help with the interest.
Jumping through hoops, though, is quite usual for anyone needing financial help.

Obviously the employers don't benefit per se from UC but they are making larger profits by paying low wages. Where their poorly paid employees get their financial assistance from is of no importance to them whatsoever.
Exactly

What help do they get with their mortgage MissAdventure?

MissAdventure

People with mortgages do get help though.

Support for Mortgage Interest is paid by the Government if someone is prepared to jump through hoops but it is a loan on which interest is charged, which has to be repaid at some future date.

growstuff

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.

Obviously the employers don't benefit per se from UC but they are making larger profits by paying low wages. Where their poorly paid employees get their financial assistance from is of no importance to them whatsoever.

People with mortgages do get help though.

FarNorth

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

So what?
It would help renters. If home owners need help they need to make their case for that and have it treated separately.

Simply pouring out more Government money so that it can be paid to landlords sounds like a bad plan.

I think that everyone should be able to get help if they need it. I'm not saying that people should necessarily be able to get a house bought for them, but I see no reason why renters should have a safety net denied to those with mortgages.

A welfare state should provide for all citizens while they are unable to provide for themselves.

It means that money paid to people on benefits goes straight into the pockets of people who may own multiple properties.
Then people complain about people on benefits.

I dread to think how much has been paid out in rent for the ex council flat above me, to people who live elsewhere, do little maintenance, and rarely even visit.
£850 a month, a good few years ago.

The people on benefits don't gain anything out of it at all, because the amount paid actually to the person is the same, across the board.
All of them have had to spend a good amount of the money meant for them, to pay the "top up", since the amount of help they can get is capped.

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

So what?
It would help renters. If home owners need help they need to make their case for that and have it treated separately.

Simply pouring out more Government money so that it can be paid to landlords sounds like a bad plan.

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?
Absolutely not.
Part-time work (even zero hours work) is needed by many people.

However there has been a reduction in the proportion of full-time jobs and increase in part-time ones. Particularly, in retail, 'flexible' part-time which means employees are expected to be available for extra hours which then prevents them from having a second part-time job.
If enough extra hours don't materialise, they are short of money.

No, they don't support them because they have rents to pay.

Maybe it's me but I don't get what you're saying.

Pammie1

* 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.

Agreed. It doesn’t matter where the money goes, in this context. It would make as much sense to say that food manufacturers profit as people have to eat.

I should have remembered that I would be picked up for not stating that VAT is, of course paid by everyone, although when it comes to a conversation about employers benefiting from ‘the system’ by allowing the government to spend public money to pay some of the expenses of the low paid, that is irrelevant, surely?

In any case, when non-earners pay purchase tax it is the equivalent of children buying parents presents with their pocket money - it recirculates the money but is not adding to the household income. Again, not particularly relevant in this context, but maybe worth saying.

nadateturbe

Yes, I get your point Growstuff and agree totally about private landlords. but many wages don't even support those living alone.
And yes, many home owners would cheerfully sell up and rent if they could get a long term tenancy and security.

No, they don't support them because they have rents to pay.

The main sticking point is housing costs.

Somebody working 37 hours @ £8.91 per hour earns £329.67 before deductions. It's not a fortune, but it's survivable before housing costs and children. I don't think I've ever had that much disposable income in my life.

The tax/benefit system should interact and ensure that everybody receives at least a minimum and asset owners should be taxed more and efficiently to pay for it. There's an overlap, but I would prefer assets to be more highly taxed than business profits because the latter do at least provide others with jobs and an income. Conservative ideology will never do that. Unfortunately, just paying people more is inflationary and would force businesses with tight profit margins to close. Market forces can't and won't ever achieve that on their own.

Yes, I get your point Growstuff and agree totally about private landlords. but many wages don't even support those living alone.
And yes, many home owners would cheerfully sell up and rent if they could get a long term tenancy and security.

MaizieD

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.

But why are you obsessed with 16 hours? It's irrelevant with the current system.

PS. The current minimum wage for those 23 and over is £8.91 per hour.

Pammie1

* 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.

Why not tax businesses who are "underpaying" their employees and making excessive profits? The taxes could be redistributed via the benefit system to those who need support.

nadateturbe The point I was trying to make is that the state has been supporting children one way or the other for decades. Firstly, it was through tax allowances, then through child tax credit and now as part of Universal Credit. Many advanced countries support children financially one way or the other. Employers have never been expected to subsidise those with children.

I agree that regulating rents wouldn't help those with mortgages, although people who can't really afford mortgages might not be tempted to take them on, if rents were more affordable and tenants had more secure rights. The whole property situation in the UK is perverse and needs major reform because it's so expensive to keep a roof of any sort over one's head. Books have been written about how property distorts the economics of the UK and I haven't gone time to write about it now. There's an imbalance between the wages the country can afford to pay and the wealth which is invested in property. It's a fact that wealth is slowly and surely being siphoned off from producers/business/industry to property owners.