Earning €38k per year? Your better off on the dole

roosterman71

Letter in The Independent April 15th (sorry i can't find a link)

"I recently had a long conversation with a friend of mine who lost his job. He was in a reasonably good job and after a little bit of overtime was earning a gross salary of €35,000 per year.

So I asked him the obvious question of how he was going to cope now with four children to feed and, I have to be honest, the answer startled me. He was actually a lot better off and now in a position to go out golfing every day while his children are at school.

Frankly, I did not believe him until I sat down and did the sums. On a salary of €35,000, his annual net income after the mini Budget was €28,854, after all deductions.

Now he is on the supplementary welfare allowance which -- with a wife and four children -- gives you €443.90 per week, or €23,083 annually.

As he also has a mortgage, he is entitled to mortgage interest supplement which pays all the interest on your mortgage. In his case, this was €1,200 per month of his €1,500 mortgage, or €14,400 per annum.

He is also entitled to back-to-school and footwear payment of €905 per year for four children, a medical card which is worth, on average, say €500 per year (probably more) and a heating supplement which I cannot quantify. In total, he now has tax-free income of €38,888, an increase in his net income of €10,034 per year for working on his golf handicap.

Based on the calculations after the mini-Budget, you would need to earn more than €47,000 per year if you have four children to justify continuing to work.

This is even before taking into account the costs of working, such as petrol, car maintenance, tolls, lunches and so on.

Now in any civilised society, and especially in a society in a deep recession with a huge welfare bill, surely the government must give people an incentive to go out and work

Making the child benefit taxable or means tested later this year is just going to make the situation worse and encourage more people to give up work and rely on the State to live.

It could even drive our small economy to collapse as the welfare bill gets bigger and bigger as more people, including myself, ask: why should I bother to go out to work when it is basically costing me money to work? Unless something radically changes, I will be joining my mate on the golf course very soon.

jon1981

http://www.independent.ie/opinion/letters/now-golfing-pays-better-than-work-1708412.html

I recently had a long conversation with a friend of mine who lost his job. He was in a reasonably good job and after a little bit of overtime was earning a gross salary of €35,000 per year.

So I asked him the obvious question of how he was going to cope now with four children to feed and, I have to be honest, the answer startled me.

He was actually a lot better off and now in a position to go out golfing every day while his children are at school.

Frankly, I did not believe him until I sat down and did the sums. On a salary of €35,000, his annual net income after the mini Budget was €28,854, after all deductions.

Now he is on the supplementary welfare allowance which -- with a wife and four children -- gives you €443.90 per week, or €23,083 annually.

As he also has a mortgage, he is entitled to mortgage interest supplement which pays all the interest on your mortgage. In his case, this was €1,200 per month of his €1,500 mortgage, or €14,400 per annum.

He is also entitled to back-to-school and footwear payment of €905 per year for four children, a medical card which is worth, on average, say €500 per year (probably more) and a heating supplement which I cannot quantify.

In total, he now has tax-free income of €38,888, an increase in his net income of €10,034 per year for working on his golf handicap.

Based on the calculations after the mini-Budget, you would need to earn more than €47,000 per year if you have four children to justify continuing to work.

This is even before taking into account the costs of working, such as petrol, car maintenance, tolls, lunches and so on.

Now in any civilised society, and especially in a society in a deep recession with a huge welfare bill, surely the government must give people an incentive to go out and work

Making the child benefit taxable or means tested later this year is just going to make the situation worse and encourage more people to give up work and rely on the State to live.

It could even drive our small economy to collapse as the welfare bill gets bigger and bigger as more people, including myself, ask: why should I bother to go out to work when it is basically costing me money to work?

Unless something radically changes, I will be joining my mate on the golf course very soon.

Saruman

Holy Jebus is this for real?

dsane1

Somethings gonna give very soon in this country, people cant handle any more of this.

Danbo!

1. Quit Job
2. Adopt 4 kids
3. ????? Sign on
4. Profit

Finally!! We have the missing piece!

Alun

See here http://www.boards.ie/vbulletin/showthread.php?t=2055540985 for a discussion on this, and some comments on the trustworthiness of some of the figures.

bladespin

Not sure of the accuracy but I remember hearing that by 2060 the amount of people living on benefits in the Uk will outnumber those paying taxes by 3:1 I wonder how that'll work :eek:

panner

I was let go after xmass and have been not been able to find work. Just been through an episode with FAS and they have let me down in a big way.

Just like the person above I now have no other choice but to contact the social welfare with regard to my mortgage also to contact the bank to discuss the borrowings I can no longer afford.

I am sure there is thousands just like me all over the country and there is no other choice available.

The whole country is a disaster.

Emerald Lass

but I reckon the SW payments will be the next thing to get hit at our next budget. So it may not be plain sailing for long.
My friend could only get part time work, and took it for a few weeks. By the time her mortgage subsidy was reduced by HSE, and her SW was reduced as she worked p/t, she was €50 better off per week than entirely on the dole. And that was before travel expenses, or child minding (luckily she is getting a family member to help out, but without that she would be WORSE off). And that doesn't account for the time away from her kids for no financial gain. The only reason she is still there is that there is the possibility of her being made F/T in June. If that doesn't happen she'll leave. On the weeks where she is lucky enough to get 4 days work, she gets NO dole as the maximum part time days she can work is 3. And the irony is that the time she works is not calculated by the hour - so if she worked 4 hours every day she would get mothing as once you work at all, you get no dole for that day. Also there is no limit on what she can earn per hour - she could earn a grand an hour or tuppence, once she works within that 24hr period that is all that is taken into account. So someone on say €15 per hour p/t rate working 3 days would still get their dole for the other 3. But uf she earns €10 per hour working 4 days she gets nothing??? such a ridiculous system.
I'm on a six mth contract due to end in a couple of months - I am dreading having to go back on the dole, but financially wouldn't be much worse off than I am now TBH.

InReality

The only question is are the figures accurate.
In the other thread they give a few reasons why the may not be.

The_Conductor

Here is an excel spreadsheet with the figures for someone working in the public sector. The deductions are actually a lot higher than you might imagine.

S.

daveirl

This post has been deleted.

Highsider

For what it's worth i know fella from my previous job who got fired on purpose and then proceeded to claim the dole because he had five childern and claimed he would come out with more money at the end of the week. Thought it was bull**** until he showed me his dole docket from the post office.:mad: Lucky bastard. Those out there who play the system like this (and their number are getting greater) are running the country into the ground.

PGL

roosterman71 wrote: »

Now he is on the supplementary welfare allowance which -- with a wife and four children -- gives you €443.90 per week, or €23,083 annually.

As he also has a mortgage, he is entitled to mortgage interest supplement which pays all the interest on your mortgage. In his case, this was €1,200 per month of his €1,500 mortgage, or €14,400 per annum.

He is also entitled to back-to-school and footwear payment of €905 per year for four children, a medical card which is worth, on average, say €500 per year (probably more) and a heating supplement which I cannot quantify. In total, he now has tax-free income of €38,888, an increase in his net income of €10,034 per year for working on his golf handicap.

Based on the calculations after the mini-Budget, you would need to earn more than €47,000 per year if you have four children to justify continuing to work
.

as a matter of interest can someone tell me what one full year of the jobseekers benefit corresponds to in terms of a gross annual salary?

cheers

Mrs OBumble

PGL wrote: »

as a matter of interest can someone tell me what one full year of the jobseekers benefit corresponds to in terms of a gross annual salary?

cheers

204 x 52 = 10,608

Quite a bit less than minimum wage (8.65 X 2000 = 17,300). But it's all the extras, that someone may or may not be entitled to, that can make it lucrative.

sdanseo

Wait a minute - his mortgage INTEREST supplement is €14,400pa? Something wrong with your man's figures there. No way 80pc of his mortgage is interest...

If that supplement when calculated correctly is less than €4k a year then it's better to work, surely?

Kristopherus

If the mortgage is in its early years then it is quite possible that the interest is 80%, because interest is front loaded on most mortgages.

Xiney

JustMary wrote: »

204 x 52 = 10,608

Quite a bit less than minimum wage (8.65 X 2000 = 17,300). But it's all the extras, that someone may or may not be entitled to, that can make it lucrative.

I wouldn't call an entitlement to a €424 apartment (for a couple with no children in Galway) lucrative. It's likely to be a hellhole. I'd much rather be employed and able to afford a clean place.

The_Conductor

sdonn_1 wrote: »

Wait a minute - his mortgage INTEREST supplement is €14,400pa? Something wrong with your man's figures there. No way 80pc of his mortgage is interest...

If that supplement when calculated correctly is less than €4k a year then it's better to work, surely?

If his mortgage is less than 10 years old, having 80% interest, 20% capital repayments- would in actual fact be extremely good going. If you do the sums- initially (years 1 to 5) in excess of 96% of payments are interest, and 4% capital. The older the mortgage, the higher the % capital versus interest repayments.

The_Conductor

Xiney wrote: »

I wouldn't call an entitlement to a €424 apartment (for a couple with no children in Galway) lucrative. It's likely to be a hellhole. I'd much rather be employed and able to afford a clean place.

The norm is the rent-allowance is only a portion of the rent- not the rent in its entirety. Its the norm for landlords to fill out whatever the tenant wants on the declaration- and simply declare the correct rental income to the revenue commissioners. The tenants gets a much nicer apartment, and the landlord gets a tenant who has a vested interest in their accommodation. Many landlords simply say no rent-allowance altogether- as its an unfortunate fact that unless there is a perception of a financial interest in keeping the place- the tenant can run riot. There are a number of threads about rent-allowance etc over in the accommodation & property forum.

The_Conductor

PGL wrote: »

as a matter of interest can someone tell me what one full year of the jobseekers benefit corresponds to in terms of a gross annual salary?

cheers

Full year of Job seekers benefit = ~10,500
Full year of supplementary allowance + 4 kids = ~10,000
Full year of max 80% mortgage interest on low/average sized mortgage = ~7,600

Medical card (I'm not even going to try to put a quantifiable price on it)

There are of course other allowances that one may or may not qualify for.

Assuming a net of 28k- this would equate with a gross annual income of ~38,500 (after the supplementary budget). (This varies depending on the status of the person, and whether they are in the public or the private sector, and which class PRSI they come under).

matrim

The one thing about all these arguments is that nobody takes into account that if you are on the dole, you are stuck with what they give you and it's unlikely to change (much). But if you have a job you will likely have the option to increase your pay every year or 2 that you are working so are going to be better off in the long run.

Xiney

smccarrick wrote: »

The norm is the rent-allowance is only a portion of the rent- not the rent in its entirety. Its the norm for landlords to fill out whatever the tenant wants on the declaration- and simply declare the correct rental income to the revenue commissioners. The tenants gets a much nicer apartment, and the landlord gets a tenant who has a vested interest in their accommodation. Many landlords simply say no rent-allowance altogether- as its an unfortunate fact that unless there is a perception of a financial interest in keeping the place- the tenant can run riot. There are a number of threads about rent-allowance etc over in the accommodation & property forum.

but that's not how it's supposed to work: you can't say "people are better off on the dole than working" when that statement is reliant on people scamming the system.

That letter is about supposedly being better off on the dole because apparently the system entitles people on the dole to "too much", when in reality, if you're not scamming the system (ie, getting MORE than the system entitles people to), it's better to be working.

roosterman71

matrim wrote: »

The one thing about all these arguments is that nobody takes into account that if you are on the dole, you are stuck with what they give you and it's unlikely to change (much). But if you have a job you will likely have the option to increase your pay every year or 2 that you are working so are going to be better off in the long run.

Thats not the case any more. Pay freeze, reduced hours (or more hours for less pay), pay reduction, removal of benefits, etc is the norm these days

matrim

roosterman71 wrote: »

Thats not the case any more. Pay freeze, reduced hours (or more hours for less pay), pay reduction, removal of benefits, etc is the norm these days

But that isn't going to last forever. In a few years time when things start to recover, who's going to be better off. The guy who worked for 3 years or the guy who sat on the dole for 3 years.

roosterman71

matrim wrote: »

But that isn't going to last forever. In a few years time when things start to recover, who's going to be better off. The guy who worked for 3 years or the guy who sat on the dole for 3 years.

I hate to be a bringer of bad and negative thoughts, but 3 years? This isn't going to blow over in 3 years. I think 10-15 would be more like it. I reckon all this things come in cycles - 40s were bad, 60s good. 80s bad. 00s good So maybe in the 2020s it will be good again.

Besides, in 3 years there's not going to be much work left here. The way companies are closing/moving to low cost places is frightening. Alot of companies are moving from Ireland to low-cost places. Not because they are losing money here, but because they can make more elsewhere. And thats the sad part.

niceirishfella

roosterman71 wrote: »

why should I bother to go out to work when it is basically costing me money to work? Unless something radically changes, I will be joining my mate on the golf course very soon.

Thing is,you won't. You'll stay working like all us drones.
Why give out if you're not really going to jack your job.

veryangryman

niceirishfella wrote: »

Thing is,you won't. You'll stay working like all us drones.
Why give out if you're not really going to jack your job.

Hear hear. As an unmarried man with no children, this loophole would not work for me right now.

I do however, have the choice of continuing to work.... or taking the condom off and letting rip! :pac:

niceirishfella

......and anyway, only a dingbat would leave their job to take advantage fo this handy money,cos whilst there's no guarantee your job will last, this handy money certainly will not.
There's no future for anyone or their family in going this "leech" route.

Mrs OBumble

Xiney wrote: »

I wouldn't call an entitlement to a €424 apartment (for a couple with no children in Galway) lucrative. It's likely to be a hellhole. I'd much rather be employed and able to afford a clean place.

Agreed: the only way it could be vaguely civilised if you share the apartment, and TBH I certainly don't want to be doing that.

But rent-allowance isn't the only supplement: the others (mortgage supplement, qualifying children etc) are the better ones.

Xiney

JustMary wrote: »

Agreed: the only way it could be vaguely civilised if you share the apartment, and TBH I certainly don't want to be doing that.

But rent-allowance isn't the only supplement: the others (mortgage supplement, qualifying children etc) are the better ones.

If you're in a sharing situation, a couple with no children in galway is only entitled to 212 euro pm.

(both of these used to be more, before the budget, but were still at lower end/impossible to find rents)

Capt'n Midnight

The rent/mortgauge money is NOT guaranteed it's up to the officer

Also you have to exhaust your savings and other forms of income too - this part really sucks as it discriminates against people who have planned ahead IMHO anyone who has spent extravantly in the recent past could be made dispose of those assets first. If you have an 08 SUV or a holiday home should you really be entitled to preferential treatment when you could pay a large chunk even if it means only getting 50c to the € from the assets ?

Kang

he s not the smartest man at all. I know another guy taking the basic welfares then work for cash job too.

Kipperhell

I had a friend working in FAS and she regularly had single parents on her course. They would have to earn €32k a year to just match the income of their allowances. That would involve ignoring childcare costs in order to work. So they refused work offered to them after taking a course.

What makes it worse is due to this many woman refuse paternal rights to the father. It makes me laugh at the absurdity of our constitution while it actively pays for fathers not to take responsibility.

doolox

I worked for 7 years without any payrise in work. A transfer to a new area of work resulted in me struggling to catch up in new job skills and responsibilities and being kept down in wages.
I can see where people come from on comparing dole to work and the marginal benefit of most junior grade jobs for people with kids and dependents etc is too small.
All jobs, regardless of pay and rank, are so intensive and demanding that many leave after a few months and go back on the dole.
With intense competition and a shrinking pool of opportunity for advancement in the future this trend is going to intensify.You will se only the most educated getting any decent job promotion and the rest stuck in at the basic levels for a long time. Many will choose the dole.
Electronics is now a joke with very low wages for techs, if they can get the job. Most other jobs pay more.