Sunday, April 19, 2009

Tax credits encourage the idle

At work I am a senior department head with direct responsibility for nearly 30 staff who report directly to me. Not all of them are full time, the nature of my employment means that the industry relies on part timers due to the long trading hours and to cover sickness/holidays etc.

Now, most of the part timers would rip your arm off for extra hours, which are available pretty much every other week. However, there is a certain group of hard core part time workers who refuse to work over their contracted hours. Fair enough, they can't be forced to, (although I always remember when any 'favours' are asked of me), but when asked why not the reason always makes me so bloody angry.

The reason?


This 'hardcore' always consist of the same type of person. They are married or living with a partner, have children and are male.

The younger part timers still living at home with Mum and Dad gladly take the extra hours, after all they don't get the luxury of tax credits, and quite rightly so.

We all know that our hard earned tax money helps to finance the benefits class who use the system as a lifestyle choice, but how many of us know that we also finance the lifestyle of the 'working idle'?

The system is all wrong.


Mark Wadsworth said...

These people are responding rationally to the 70%-plus total withdrawal rate.

i.e. if you pay them £6 an hour + Employer's NIC, they only keep £1.80. For that sort of money, why would they do overtime?

It's the government that invents the rules, not your employees. Change the rules and their behaviour will change.

Rab C. Nesbitt said...

You totally right mark. I should have been more clear in my post. I will edit it later. (Being dragged out shopping at the moment!)

Faux Cu said...

Get out yer pit boy, and post some more.

Eats shoots and leaves

Mark Wadsworth said...

R, re your comment at mine:

... this morning I found out that one of my full timers wants to drop his hours. I'm sure the fact his missus is due to drop their first sprog anytime is sheer coincidence...Nope. Going by last year's Tax Benefit Model Tables, assuming his wife does not work and they are private tenants (Tables 1.4c and 1.5c to be precise) the household's net income after housing costs will be about £70 higher with one kid and 16 hours than it was with no kids 40 hours.

If he continued at 40 hours (assuming £7 an hour), then the extra income would be a princely £10 per week (Table 1.5c) (i.e. £80 more than what they get now, rather than £70 more).

Chalcedon said...

Once again I'm sure there are the best of intentions behind these tax credits but the consequences are I'm sure are unintended. Why don't these buggers ever really think things through and do some scenario planning? Or is that too old fashioned?

captainff said...

I remember from years ago one of the managers in the company I worked for, after a particularly difficult divorce, went from full time hours to part time so that he could look after his children. Each time there were wage reviews he had to argue against getting one so that he didn't cross particular earning thresholds and lose chunks out of his housing, and other, benefits.

I agree that there is an optimum income level above which the rewards for working are diminished and that it acts as a discouragement. The system needs changing asap

Anonymous said...

I don't know anything about tax credits - I never claim any handouts, whatever - but I do know that once I hit the 40% threshold in any given tax year, that's it. I stop looking for more contracts.

I just started this year's work this week, we'll see how long it takes this time.

The only bugger is you never get the summer off, because you can't count on getting work when you need it, but must take it when it comes.