Can anyone explain the logic of this please?

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.

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.

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.

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.

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.

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?

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?

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.

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.

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.

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.

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.

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.

* 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.