Tax credit claimants forced to work more hours ...

[pragmatic]

Ministers want low-paid workers to put in more hours | Politics | The Guardian

From the Guardian so hardly the bastion of truth on such things, probably a few spelling mistakes in there for good measure.

Anyway I don't think I can agree with as it is put forward

The DWP believes its proposals will lead to 1m-2.5m extra hours being worked by those already in employment.

Setting out the need to adopt a new approach, the DWP says: "The current jobseeker's allowance caseload will be joined by current claimants of tax credits/housing benefit who are working less than could reasonably be expected."

It adds: "The Welfare Reform Act enables us to place a wide range of mandatory requirements on this group (eg work search, work availability and work preparation requirements). Any requirement must be intended to help them find work, more work or better-paid work."

The government says a million people will be affected. Claimants will be defined as "working, could do more", according to a formula based on wages, working hours and children's age. In discussing what could be reasonably required of this group, the DWP asks: "Should we require claimants to move job, and when might this become appropriate? Eg, where claimants agree? Where other avenues (additional job, more work with same employer) have proved unsuccessful?"

I can see what they are trying to do, but it feels the wrong way to go about it.

 

[pragmatic]

I guess everyone agrees this is a bad idea?

I didn't quote the more emotive parts of the article, which might have coloured my view more than what I have quoted here. The insinuation is that if the Job Centre determines that someone working but in receipt of in work benefits could have their benefits reduced or removed if they do not successfully seek a job with a higher wage or more hours. The main problem I have is that is up to the Job Centre to determine this, and effectively penalise people who are in work.

A better system would be a tapering of all benefits so that someone is will always be better off from earning more or doing more hours etc. Completely the wrong method for the perceived problem.

 

[fluxo]

I guess everyone agrees this is a bad idea?

I didn't quote the more emotive parts of the article, which might have coloured my
view more than what I have quoted here. The insinuation is that if the Job Centre
determines that someone working but in receipt of in work benefits could have their
benefits reduced or removed if they do not successfully seek a job with a higher
wage or more hours. The main problem I have is that is up to the Job Centre to
determine this, and effectively penalise people who are in work.

They are people in work who remain dependent on welfare. So it's a consistent
extension of the government's existing policy, which is to reduce welfare dependency
through the use of conditionality and a sanctions regime.

The debate as it has been framed so far is a little misleading, in that some people
have been led to believe that the deficit can be eliminated by reducing the
entitlements of the unemployed. But if you look at the deficit numbers, you will see
that is not the case. Even if you removed all those benefits, the deficit would
still be colossal. Consequently, there will be pressure to extract money from some
other group of people. People who are working and still claiming benefits could be
one such group that is considered.

The principle would be that if you are in receipt of state support, you should seek
a better job. If you are unemployed, that is any job at all. If you are employed,
then it is a better paying job. If you are working, you are capable of working in a
better paid job. That seems entirely logical to me.

Personally, I would prefer a positive approach that encourages people rather than
penalizes them. That would apply to both working and unemployed people. But if you
are going to penalize the unemployed for being too lazy to get a job (as some say),
it is entirely consistent to penalize the welfare-dependent employed who are too
lazy to get a better job or work longer hours etc.

As I mentioned above, the debate has been slightly misleading so far. The real
debate, the really tough political decisions are yet to come. Unless the economy
picks up and more money starts coming in, the government will be forced to extract
money from some other segment of the population than the unemployed - cutting
departmental spending is difficult as so many areas have been ringfenced. That means
either reducing benefits or increasing taxation for groups such as the working poor,
or middle earners, or pensioners, etc. None of the options are particularly palatable.

 

[karkus30]

They are people in work who remain dependent on welfare. So it's a consistent
extension of the government's existing policy, which is to reduce welfare dependency
through the use of conditionality and a sanctions regime.

The debate as it has been framed so far is a little misleading, in that some people
have been led to believe that the deficit can be eliminated by reducing the
entitlements of the unemployed. But if you look at the deficit numbers, you will see
that is not the case. Even if you removed all those benefits, the deficit would
still be colossal. Consequently, there will be pressure to extract money from some
other group of people. People who are working and still claiming benefits could be
one such group that is considered.

The principle would be that if you are in receipt of state support, you should seek
a better job. If you are unemployed, that is any job at all. If you are employed,
then it is a better paying job. If you are working, you are capable of working in a
better paid job. That seems entirely logical to me.

Personally, I would prefer a positive approach that encourages people rather than
penalizes them. That would apply to both working and unemployed people. But if you
are going to penalize the unemployed for being too lazy to get a job (as some say),
it is entirely consistent to penalize the welfare-dependent employed who are too
lazy to get a better job or work longer hours etc.

As I mentioned above, the debate has been slightly misleading so far. The real
debate, the really tough political decisions are yet to come. Unless the economy
picks up and more money starts coming in, the government will be forced to extract
money from some other segment of the population than the unemployed - cutting
departmental spending is difficult as so many areas have been ringfenced. That means
either reducing benefits or increasing taxation for groups such as the working poor,
or middle earners, or pensioners, etc. None of the options are particularly palatable.

Their entire policy was based on the private sector somehow coming to the rescue, meanwhile they were and are taxing those wealth creators and their businesses as hard as possible while making it as difficult as possible to employ people and creating regulations and tax schemes that make it expensive to operate.

 

[pandemic]

Interesting topic, the firm my dad works for has a lot of overtime available that pays 1.5x - 2x the regular rate. Pretty much everyone welcomes it being available, but the employees who are also receiving tax credit turn it down because they'd be worse off as they'd would lose the credits by increasing their earning capacity. They often joke the government shouldn't be so generous with tax credits. These guys aren't lazy, in fact they'd like to do the extra hours work just not at the expense of being worse off.

On the topic of low paid workers putting in more hours, I'm sure many would if it were available (which I think in most places is still not available).

So I guess what ministers should be looking at is how can the tax credits (welfare in general) be implemented such as not to discourage people who want to work more hours, as well as initiatives that will help employers grow their businesses so there is a requirement for more working hours and employees. Yes it's easier said than done, but it's the right thing to do and there will no doubt be winners and losers.