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tax credit changes


wahl
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RE article in WW today...

change to tax credit rules which means thousands of families will lose all of their working tax credits unless they can significantly increase their working hours.

It means that couples with children earning less than around £17,700 will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.

Government figures revealed in Parliamentary answers show 275 households in Warrington North, 185 households in Warrington South and 212,000 households across the country, could lose out.

For once I agfree with Mrs Jones that this is a sneaky underhand move by some incompetent in DWP to deprive the less well off of some financial aid, and it needs stopping.

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I don't really understand tax credits but does it mean that a couple with kids will now have to work a total of 24 hours between them or each to be eligably for their extra free money ? :oops:

 

If a couple are both working and qualify they have to choose which one can claim the tax credit.

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Ok but does that mean between them they currently have to work for at least 16 hours a week

 

eg can one work 9 hours and the other work 8 hours

 

OR can one work 35 hours but as long as the other works 16 they get it (providing they don't jointly go over the £17.7k threshold :oops:

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If one works more than 16 hours a week (soon to be 24) and earns less than 12k then that person can claim tax credit.

 

If 2 work more than 16 hours a week (each) and earn between them less than 17k then one can claim.

 

If 1 works 10 hours and the other works 16 hours then the one working 16 hours claims.

 

If 2 work 15 hours each (soon to be 24) neither can claim.

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As I've commented on the news article, we never had tax credits when bringing up children and I don't really understand why it happens now. There is Family Allowance and if people fall below a certain amount they are entitled to other benefits such as housing etc. It's the parents job to provide for their children, not other taxpayers, except in situations where they really cannot work due to sudden illness and that is when the Welfare State should provide a safety net.

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What is really crazy about the tax credit system is the state taking money off people with one hand and giving it back with the other, with all the bureaucracy that entails. One of the big problems is that the personal tax-free allowance is so far under what the state admits is a living wage. If the tax-free allowance was set at the living wage level then there would be no need for the tax credit sytem. This was one of Prudence Brown's sneaky little tricks to increase the tax take without putting up the income tax rates. And it has been shown time and again that income tax, with a low allowance, hits the poor hardest. Someone earning £15000 PA pays income tax on 50% of their wages while someone earning £45000 PA only pays income tax on 20% of their wages (assuming a personal allowance of £7500). So it can clearly be seen that if the personal allowance was raised to £15000 the low wage earner would pay no income tax while the higher one would be paying tax on 33.3%. Don't you just love Labour, the party of the working man. Oh yes!! :roll: :roll: :roll:

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As I've commented on the news article, we never had tax credits when bringing up children and I don't really understand why it happens now.

 

SL, tax credits are not solely for those people with children.

Anyone who is working more than 16 (24) hours a week and earning less than 12k can claim tax credits. (17k for a couple)

 

For those over 25 years of age the number of hours increases to 30.

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Think you may have the logic slightly wrong there Asp. If your personal allowance is £7500 then your entitled to earn that amount before paying tax. So agreed that the person earning £15000 a year is paying tax on 50% of his earnings but the guy earning £45000 and also having an allowance of £7500 would be paying tax on £37500 which equates to 83.3% of his income not 20% as you suggest.

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Do you mean £150,000?

 

 

No I mean £15000. If the personal allowance is £7500 then he is paying tax on 50% of his earnings at 20%. To then pay a civil servant to give him some of his own money back to give him a living wage is pure madness. :blink: :blink:

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My German mate could never understand the tax credit system when I tried to explain it to him a few years ago....

 

"Yes, you go to work and earn money and then pay tax....."

 

"If you do not earn enough money, the government give you some back!!" says me....

 

"So you pay money to one person, who gives it to another person who then gives it back to you???" says my friend....

 

"How did you ever win ze war!!"?? :D

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No I mean £15000. If the personal allowance is £7500 then he is paying tax on 50% of his earnings at 20%. To then pay a civil servant to give him some of his own money back to give him a living wage is pure madness. :blink: :blink:

 

2nd apology today, totally misread the post :roll: :roll:

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