better off on benefits

Whoknos

Not the usual my hours have been cut or wages reduced story. I am in my late 20s, am educated to masters level, with around 5 years experience in my field both at home and abroad, and am working for one of the US multinationals that supposedly are our economy's great white hope of recovery. There are the square root of no opportunities for advancement in my office, and even in the London office they have adopted the increasingly popular method of promotions without any pay rises (moving the deck chairs springs to mind). Relative to many I probably earn a decent wage, but hover marginally below the official industrial average.
My partner has recently given birth to our first child. She has no formal education and has worked only in the services sector (shops, dept. stores etc.). Once her maternity period is completed the cost of childcare in Dublin will render it impossible for her to return to work. However, as she lives with me and we remain together, she will not therefore be entitled to any welfare payments beyond child benefit. I therefore took it upon myself to calculate our finances post maternity benefit , and have calculated that we would be quite significantly better off if I were to lose my job and we could both then apply for a range of benefits (having never been on benefits before I have little doubt there are probably even more for which we could be eligible that I have disregarded). Furthermore, with free education and retention of benefits during some courses for the long term unemployed it could even be argued that my prospects of advancement would be enhanced by unemployment.
My question isn't about whether I should or should not take this course of action. What these calculations really opened my eyes to was my desperate need to emigrate again and this time never to return. Many of my friends have already availed of this option, with those most able to do so due to demanded skills or good education the most likely to leave. But what hope has this country of any recovery where those with good educations, good work ethic, and a desire for advancement are better off by not working? The forth "commandment" of economics is that people respond to rewards - I am currently being incentivised to quit work and claim welfare from financial, advancement and personal (time with family) points of view. And if I am unable to find suitable work abroad, what possible motivations exist for me to remain in the workforce?

Mrs OBumble

Get married. Makes a huge difference to your tax credits, and would likely blow your calculations out of the water.

username123

JustMary wrote: »

Get married. Makes a huge difference to your tax credits, and would likely blow your calculations out of the water.

Its not that much of a huge difference. You would be taxed at the lower rate on a few k of your income instead of the higher rate. I think it maxes out at a saving of just under 2k a year (which is not to be sniffed at but not huge either). I could be wrong on this, I stand open to correction, I dont have the exact figures to hand - its just memory from when I investigated it myself.

Considering the range of benefits you could get from social welfare it would probably be more cost effective to be on social welfare although if you are educated to masters level you can forget any funded courses as they wont give BTEA for anything other than a primary degree or h dip and only if its your first primary degree - although your wife would be eligible after a period of time.

The motivation to remain in the workforce is that its better to pay your own way through life if you can. But I understand the point you are making.

Whoknos

Thanks for the reply, I wasn't aware of the workings of the BTEA as this is all quite new to me as mentioned above. However, I think you can enroll on these new springboard courses without the BTEA and still retain your benefits. Not sure if the courses are up to much but it's something at least.

Regarding the "it's better to pay your own way where possible" arguement, I find it quite worrying that this seems to be a common opinion. My primary degree is in economics and an economy that relies on such an honour system is destined for abject failure. I'm beginning to feel that I am working for the collective good but to my own detriment. A simple game theory analysis would indicate my optimal position in these circumstances is unemployment. Unfortunately, the same GT matrix can be applied to large swathes of the population which begs the question, who exactly is going to pay for all of this?!

username123

Whoknos wrote: »

Regarding the "it's better to pay your own way where possible" arguement, I find it quite worrying that this seems to be a common opinion.

Its different for everyone but when I was on social welfare after redundancy I did not like the feeling of being dependant on the state. It didnt help that the staff in my local social welfare office treat you like a parasite, and that the money you receive is a pittance, but I also didnt enjoy the long waits, the completely senseless signing on queues, the people queuing who are shouting down smartphones about the great drugs they scored the previous night. Its not a nice experience. And there is no chance of betterment if you are dependant on state support and are not in a position to get BTEA. The springboard courses are not suitable to someone of my education level.

chris85

Have you looked for another job in another company? Very often in companies there is not room for advancement but you have the option to look elsewhere. Has this been examined?

Also you quitting your job would not entitle you to job seekers and some other benefits. You losing your job would but quitting is of your own accord would not and its not up to the government to financially support this decision.

Would it be considered that your partner could work part time and reduce the burdon of the cost of childcare which is expensive.

Emigration is not a bad option for many. It gets shouted around a lot that EVERYONE is forced to emigrate. Many are not forced and would have went anyway. We have a strong history of emigration in this country and why not? You get to see the world, experience new cultures and enjoy your life. I feel sorry for people who are forced away from families and everything they know if they dont want to go but for others its an exciting experience.

Mr. Loverman

I can understand your dilemma.

The problem really is our overly generous social welfare system. As a country we can't afford it, and as you have pointed it, it often means it makes more sense to quit your job and live the life of leisure.

Personally I go mad when I don't work. I stopped working around 18 months ago and I think overall it has been bad for me. When I worked a 9 - 5, I would come home in the evening and study or work on my side projects for a few hours. Now that I am effectively unemployed (although I don't claim social welfare) I do very little with my time. Well, I do around an hour or two of study per day, but this is a lot less than I used to do when I worked full-time. I'm not complaining, I have a great life, but regards personal development or whatever, I think being unemployed makes you lazy and requires a lot of discipline if you want to avoid frequent binge drinking or whatever. Only you know if you're the type of person who will thrive or languish when unemployed.

Broxi_Bear_Eire

username123 wrote: »

Its different for everyone but when I was on social welfare after redundancy I did not like the feeling of being dependant on the state. It didnt help that the staff in my local social welfare office treat you like a parasite, and that the money you receive is a pittance, but I also didnt enjoy the long waits, the completely senseless signing on queues, the people queuing who are shouting down smartphones about the great drugs they scored the previous night. Its not a nice experience. And there is no chance of betterment if you are dependant on state support and are not in a position to get BTEA. The springboard courses are not suitable to someone of my education level.

Completely agree with you on this though my situation is slightly different. I find myself on disability with serious spinal problems I refused to claim anything for two years after I was diagnosed and after I had worked for another eighteen months, preferring to live off the small savings we had. Eventually I had no choice and after jumping through hoops metaphorically speaking I was awarded disability. I hate it with a passion people thinking I am well off and I am living a life of luxury. I have said to a few right try living off what I get for a time say three months and then speak to me.

username123

Broxi_Bear_Eire wrote: »

Completely agree with you on this though my situation is slightly different. I find myself on disability with serious spinal problems I refused to claim anything for two years after I was diagnosed and after I had worked for another eighteen months, preferring to live off the small savings we had. Eventually I had no choice and after jumping through hoops metaphorically speaking I was awarded disability. I hate it with a passion people thinking I am well off and I am living a life of luxury. I have said to a few right try living off what I get for a time say three months and then speak to me.

Im sorry to hear this. I totally agree with you regarding the attitude of people. Even some of my own in laws would say things like 'sure isnt it well for you?' as though somehow I had arranged this situation to suit myself! I didnt claim things I could have claimed either, actually Im sorry now because after many negative experiences with social welfare I feel I should have bloody taken everything I could get!

Best of luck to you, I hope things work out.

danthefan

I had to take a week off sick recently and was climbing the walls by the end of it. I personally would never choose unemployment.

doolox

Why is it better to "pay your own way" than get paid to live by the State?

In money terms it shouldn't matter where you get the money from or how you come by it. As Shakespeare says "conscience makes cowards of us all" and there is a lot of social pressure to "conform" and get , and keep a "decent" job or be "respectable".

When you strip all the social niceties out of it a job really only entitles one to borrow a large sum of money and live in a "nice" neighbourhood. For most people on starting grades in a job there is only a marginal increase in income once they have a family ( 1 or 2 kids) and need a house to live in as opposed to a small apartment.

Most starter jobs rely on single people who are only entitled to €100 pw in dole or even less if living at home so that the companies can offer them min wage or so and still be ahead of what they would get on the dole.

Married people with kids and dependents need to be offered more in order to attract them into the workforce.

It benefits the government that most people regard the dole as somehow less than respectable or a decent thing to be on. They benefit when people take up badly paid and badly structured jobs etc without realising that , for example, they lose 9 weeks pay if the job doesn't work out and they have to go back on the dole. Also the fact that spouses of people earning modest earnings are not entitled to Jobseekers Assistance or that self employed people whose businesses fail to give them an adequate income are not entitled to dole until most or all their savings and assets are used up then you have a situation where people are in jobs are business situations that do not pay much above what they would get on the dole.

Companies and accountants calculate the benefits of any action. If a certain action nets a higher income than an alternative and IS LEGAL, the company will take it. Grants subventions tax shelters exemptions etc are a form of "dole " for companies but do not suffer from the same stigma that general society attaches to individaul claimants of the dole.

It should be within the bounds of possibility for a Masters graduate to do a spreadsheet analysis of both scenarios, job or total dole and see what pays better.

Mrs OBumble

username123 wrote: »

Its not that much of a huge difference. You would be taxed at the lower rate on a few k of your income instead of the higher rate. I think it maxes out at a saving of just under 2k a year (which is not to be sniffed at but not huge either). I could be wrong on this, I stand open to correction, I dont have the exact figures to hand - its just memory from when I investigated it myself.

Ahh, no, you are taxed at zero, not just the lower rate for a big chunk too.

To be honest, the original post makes me really, really angry.

This forum is full of stories of people struggling to get a job that pays perhaps 25k, who are reporting significant ill effects on their well-being, social connections, etc due to being out of work. People who want to contribute to society, rather than sit on the sidelines taking all they can get.

Now this thread is from someone who's earning "marginally under" 40k. (ref: http://businessetc.thejournal.ie/average-industrial-wage-in-ireland-576846-Aug2012/) and whining because in the current climate they're not likely to get a payrise without getting a new job in a different company. To which my considered response is "diddums ... lots of people will never earn that much in their lives, unless they emigrate to somewhere with very challenging living conditions".

OP something else for you to consider: I doubt that you have interpreted the available welfare options correctly. You cannot "both apply for a range of benefits". One of you can apply for a benefit - unless you are sick/disabled, Jobseekers is the one that would apply - and this comes with a clear expectation that the main applicant is ready, willing and able to take any suitable job. One of you would get the benefit, and the other would count as a "qualified adult" and thus increase the rate. You may get housing assistance - but probably the quality of housing you can get this for would be significantly less than the quality you are used to now. Apart from child benefit (which you get anyway), and fuel allowance (a pittance) I'm struggling to see what else you would get. And I can assure you that living on the amount of JSA that a couple with one child get is not easy.

okiss

I did not like this post as you earning some where in the region of €35k to €40k a year. Your partner got pregnant and I am sure they got maternity pay from the state. You are now thinking that you would be better off on the dole as due to the cost of childcare your partner can't go back to work.
You have also told us the only way you will get more money is to get another job. Well if things are that tight for you why are you not looking for another job?
Could your partner not work in the evening or weekends when you mind the child?
Could you get family income supplement?
I know that there are a lot of people who have read your post and would like to be in your position rather than signing on the dole.

youtube!

Mr. Loverman wrote: »

I can understand your dilemma.

The problem really is our overly generous social welfare system. As a country we can't afford it, and as you have pointed it, it often means it makes more sense to quit your job and live the life of leisure.

Personally I go mad when I don't work. I stopped working around 18 months ago and I think overall it has been bad for me. When I worked a 9 - 5, I would come home in the evening and study or work on my side projects for a few hours. Now that I am effectively unemployed (although I don't claim social welfare) I do very little with my time. Well, I do around an hour or two of study per day, but this is a lot less than I used to do when I worked full-time. I'm not complaining, I have a great life, but regards personal development or whatever, I think being unemployed makes you lazy and requires a lot of discipline if you want to avoid frequent binge drinking or whatever. Only you know if you're the type of person who will thrive or languish when unemployed.

Your point about unemployment makes you lazy and that it takes a lot of discipline to avoid becoming a binge drinker or whatever is really unfair. I have been under employed if not exactly unemployed for almost 2 yrs now. I don't consider myself lazy or in any danger of becoming an alcoholic. I don't waste my time I am fitter than ever and infact I don't drink or smoke, but go right ahead you just keep on generalising "all unemployed are lazy bums with drink problems.

Jellicoe

Just Mary wrote:

Get married. Makes a huge difference to your tax credits, and would likely blow your calculations out of the water.

Amateur. Worst financial mistake you could ever make benefits wise. Never get married.

Knock up girlfriend asap. She'll get loan parents and a council house in a flash.
Move in on the QT as a cock lodger. After 10 years, get GF to buy house for max. discount with council loan. and sell/lease back to local authority.

Mr. Loverman

youtube! wrote: »

Your point about unemployment makes you lazy and that it takes a lot of discipline to avoid becoming a binge drinker or whatever is really unfair. I have been under employed if not exactly unemployed for almost 2 yrs now. I don't consider myself lazy or in any danger of becoming an alcoholic. I don't waste my time I am fitter than ever and infact I don't drink or smoke, but go right ahead you just keep on generalising "all unemployed are lazy bums with drink problems.

I'm sorry if I offended you.

I should have said "can make you lazy".

What I was trying to say was if you are not disciplined you can end up getting lazy and developing bad habits. (Hopefully from the tone of my post in question you can see I wasn't attacking people and was only generalising and talking about unemployment from my own perspective).

I don't at all think every unemployed person is a lazy bum with drink problems.

Whoknos

Thanks for all the responses. Doolox in particular seems to understand where I'm coming from perfectly. I hadn't previously thought about it in terms of corporate accounting methods but seems a perfect analogy. Fortunate for the country more of us aren't accountants I guess!

JustMary, why does my post make you angry exactly? Because I'm not eternally grateful that I effectively work for no personal benefit, and in fact am in real terms paying to work? I would also draw your attention to the fact that I specifically said in my OP that I was not planning on taking this course of action, but had done the calculations and discovered a number of anomalies. Would it be best that I just took what the ESRI tell us as gospel and perform no research of my own. The wage ranges in which you place me are accurate, and as said before I am educated and experienced. Despite these facts I would be financially better off on the dole. If that's the case for people on what should be a decent living wage, how can industries which depend on lower paid workers hope to survive in the long term? There is no point getting angry at people who abuse, or are able to abuse, a broken system - your ire should be directed at the system which allows such abuse.

To people who mentioned boredom and laziness as possible side effects of unemployment, I would tend to agree (although I called it college rather than unemployment!) However, as I mentioned earlier, while these may very well be valid concerns the economy should not be, and ultimately cannot be, dependant on just these factors to encourage people to enter or remain in the workforce. People respond to incentives, most often financial incentives. If our economy is now disregarding this "commandment" of economic theory then the future is not bright.

username123

JustMary wrote: »

Ahh, no, you are taxed at zero, not just the lower rate for a big chunk too.

Could you show a worked example for this please where one partner earns and the other doesnt and the difference between married and unmarried?

Im not disputing you at all, Id just like to see the numbers and Im not too clear on how it works, but I can remember investigating it and phoning revenue and them telling me the max saving was in the region of under 2k in tax. If its a lot more then I will be getting back onto them!

SCOOP 64

I was going to add too this, im just after being made redundant after 9 yrs, but then read DOOLOX post, i think he put it
perfectly. very good post DOOL0X.

Whoknos

You just combine all credits and allowances for the couple. So, if standard tax free allowance is 3,300 per person, and only 1 of a couple is working, then the one who is working can take their spouse's tax free allowance resulting in 6,600 being tax free. The same system is applied to tax credits, although somewhat harder to explain due to the convoluted system. Basically though you just double the old tax bands as there are two people's tax credits being utilised by a single worker. End result is if you are a high earner you will profit greatly from marriage, for anyone under 40k the only real advantage is the doubling of the tax free allowance.
Would also like to say that it's an awful system. Two people doing the same work can earn different wages due to marital status. Main problem is though, very often women may take a couple of years out at the beginning of their children's lives to raise them initially. If hubby is on a good wage often it makes no sense for them to return to work afterwards as they will take their tax credits and use it on middle income earnings while hubby could apply them to the top tax rate. Yet another disincentive to work, which is what got this thread started in the first place.

L.Jenkins

Before you consider dropping your job OP, consider your options. Check out Citizens Information and Mabs. See what advice they can offer you in terms of benefits and so on. Never just walk out of a job.

You could also look for tips on how to politely ask for a pay raise. With a child on the way, determine what is sufficent noting that an extra €1000 per year = €20 per week extra. So €5000 per year extra could be pushing it, but reasonable at the same time.

If all else falls, update your CV and search for something else that pays what you feel you are worth.

Would you also consider moving for the sake of reducing rent costs? I decided to move to Navan with my Fiancee, even though I work in Dublin. I have a daily commute, but the distance from Dublin (Cost of Petrol) + Rent is cheaper than living in Dublin.

wobblyknees

Whoknos wrote: »

Not the usual my hours have been cut or wages reduced story. I am in my late 20s, am educated to masters level, with around 5 years experience in my field both at home and abroad, and am working for one of the US multinationals that supposedly are our economy's great white hope of recovery. There are the square root of no opportunities for advancement in my office, and even in the London office they have adopted the increasingly popular method of promotions without any pay rises (moving the deck chairs springs to mind). Relative to many I probably earn a decent wage, but hover marginally below the official industrial average.
My partner has recently given birth to our first child. She has no formal education and has worked only in the services sector (shops, dept. stores etc.). Once her maternity period is completed the cost of childcare in Dublin will render it impossible for her to return to work. However, as she lives with me and we remain together, she will not therefore be entitled to any welfare payments beyond child benefit. I therefore took it upon myself to calculate our finances post maternity benefit , and have calculated that we would be quite significantly better off if I were to lose my job and we could both then apply for a range of benefits (having never been on benefits before I have little doubt there are probably even more for which we could be eligible that I have disregarded). Furthermore, with free education and retention of benefits during some courses for the long term unemployed it could even be argued that my prospects of advancement would be enhanced by unemployment.
My question isn't about whether I should or should not take this course of action. What these calculations really opened my eyes to was my desperate need to emigrate again and this time never to return. Many of my friends have already availed of this option, with those most able to do so due to demanded skills or good education the most likely to leave. But what hope has this country of any recovery where those with good educations, good work ethic, and a desire for advancement are better off by not working? The forth "commandment" of economics is that people respond to rewards - I am currently being incentivised to quit work and claim welfare from financial, advancement and personal (time with family) points of view. And if I am unable to find suitable work abroad, what possible motivations exist for me to remain in the workforce?

Can you post up your calculations?

Cushie Butterfield

There is a huge disjoint between researching social welfare benefits & the harsh reality of living on them if you are eligible to receive them.

Ok OP let's just say you give up your job in the morning.

Assuming that you are eligible for & qualify to claim Jobseeker's Benefit you may be subject to a 9 week disqualification of receiving anything at all due to the fact that you voluntarily decided to quit your job. Meanwhile your bills will continue to roll in, your direct debits will continue to come out of your bank account. Whatever savings you may have will be quickly reduced on a daily basis. You can claim a refund of tax paid, which you would get in dribs & drabs. This would quickly disappear in the form of partially catching up on what would by then be overdue bills.

Jobseeker's Benefit is only paid for a maximun period of a year. After that you could apply for Jobseeker's Allowance which is means tested. This involves giving access to strangers to all your financial details. Any savings that you may be left at that stage with would be taken into account, so your unemployment payment could actually reduce.

So, bear in mind that any personal debt such as credit cards, bank or credit union loans or any other contracts that you have entered into such as mobile phone, broadband, landline, Sky/UPC will still have to be paid. Petrol/Diesel, NCT, car insurance, road tax, car repairs/maintenance, life insurance, property insurance, mortgage protection insurance, electricity/gas/heating oil, bank charges, clothes, nappies, baby formula, personal grooming, shoes, property repairs, food etc still all have to be paid & budgeted for. These would all have to be paid/budgeted for out of your weekly Unemployment Benefit. I suggest you do the maths with regard to the above before deciding that you would be better off on state benefits.

If you are granted Mortgage Interest Supplement it only covers a proportion of the interest content of your mortgage - you still have to come up with the rest plus the capital content.

Maybe if you had zero outgoings & no other responsibilities you might be better off, but the vast majority of people are not in that position.

So, whilst you may find that in theory you would be better off on benefits, I think that the cold harsh reality would be a much starker experience for you & your family!

kippy

doolox wrote: »

Why is it better to "pay your own way" than get paid to live by the State?

In money terms it shouldn't matter where you get the money from or how you come by it. As Shakespeare says "conscience makes cowards of us all" and there is a lot of social pressure to "conform" and get , and keep a "decent" job or be "respectable".

When you strip all the social niceties out of it a job really only entitles one to borrow a large sum of money and live in a "nice" neighbourhood. For most people on starting grades in a job there is only a marginal increase in income once they have a family ( 1 or 2 kids) and need a house to live in as opposed to a small apartment.

Most starter jobs rely on single people who are only entitled to €100 pw in dole or even less if living at home so that the companies can offer them min wage or so and still be ahead of what they would get on the dole.

Married people with kids and dependents need to be offered more in order to attract them into the workforce.

It benefits the government that most people regard the dole as somehow less than respectable or a decent thing to be on. They benefit when people take up badly paid and badly structured jobs etc without realising that , for example, they lose 9 weeks pay if the job doesn't work out and they have to go back on the dole. Also the fact that spouses of people earning modest earnings are not entitled to Jobseekers Assistance or that self employed people whose businesses fail to give them an adequate income are not entitled to dole until most or all their savings and assets are used up then you have a situation where people are in jobs are business situations that do not pay much above what they would get on the dole.

Companies and accountants calculate the benefits of any action. If a certain action nets a higher income than an alternative and IS LEGAL, the company will take it. Grants subventions tax shelters exemptions etc are a form of "dole " for companies but do not suffer from the same stigma that general society attaches to individaul claimants of the dole.

It should be within the bounds of possibility for a Masters graduate to do a spreadsheet analysis of both scenarios, job or total dole and see what pays better.

That's all well and good, but if one does take the route of consciously deciding to live off the state and a few years/months down the line state subsidies are cut/means tested/more pressure is put on the person to find work where does that leave the person?
A few months years without any experience with a qualification that has stagnated and an attitude that has changed entirely.

Of course everyone has a right to review their options from time to time, I do every few months to be honest, but the I'd rather rely on my own ability to make money than the ability of the state to continue funding my lifestyle.

Whoknos

Calculations are as follows:

Gross income 32k p/s which is equivalent of EUR 501.33 net per week. 1 adult dependant and 1 child dependant to be supported from this.

benefits: Me: 188 per week (less 2 euro charge on rent supplement I believe) + 124.80 qualified adult for my partner + 29.80 for my child = 340.60 per week

The above results in excess earnings of 160.73 from working. However, from income from work rent of 800 p/m must be supported, as well as a second car (I already took the advice of moving further out to benefit from cheaper rent. Unfortunately this means we live in the back of beyond in Wicklow although I work in Dublin and we both need cars to live there if I work. The second car, and perhaps even the first car could be dispensed with if I was not in work). Our collective rent would reduce from 184.62 p/w to 35 p/w (contribution required when receiving rent allowance) which raises the real rate of benefits p/w to 340.60 + (184.62-35) = 490.22, a difference from my employed imcome of only 11.11 p/w.

From this excess of just over 11 euro, we have to run two cars (as outlined above), cover all medical costs ( a quite significant expenditure with an infant child to care for) as well as other costs associated with working (transport, clothes, occasional paid for meals in work, doctors visits of 65 euro if out of work for three days more etc.) Not to mention the value I personally place on time spent with my family.

I apologise for any discrepancies or errors in the above calculations. Also, before anyone else posts any angry posts in relation to this let me again please emphasise that I am not proposing that this is the best thing for me to do, simply pointing out weaknesses in the system as whole as they relate to me.

Cushie Butterfield

I think it would be a mistake to assume that anyone who disagrees with you or points out any flaws is angry. I don't think that you giving up your job would really make any difference to unemployment figures, as I'm assuming your position would be filled by someone coming off social welfare, or if not some position further along the chain would be. I do however feel that maybe you haven't thought everything through properly.

Also, it's probably worthwhile pointing out that the maximum rent that qualifies for rent supplement in Wicklow is €525 for a couple with no children, and €625 for a couple with 1 child or one-parent with 1 child, so in order to even qualify for rent supplement you would have to move to cheaper accomodation which may or may not prove difficult to find, or ask your landlord to reduce the rent. So, when factoring in rent supplement you have to decide if there are cheaper rents available, plus, if there are, would the accomodation be of the standard & in the same social environment to what you are used to or prepared to live in.

Whoknos

I agree, and most people are responding reasonably. However, one poster did say that my attitude angered her and the emphasis that these were simply calculations were specific to her.

Regarding your second point, I only live in Wicklow as that is the only place in which I can currently afford to live. I am from, and work in, south Dublin. Therefore, defecting to rent allowance from private renting would in fact afford me the opportunity to return to the social environment to which I am used. Also, the rent supplement in this area for a couple with one child is EUR 875, ironically resulting in my being able to afford a larger rent due to decreased income (yet another anomaly in an ever growing list of anomalies).

At any rate, my aim is simply to highlight these discrepancies rather than request advice of whether I should or should not avail what is effectively an arbitrage opportunity in the labour market. A man in his 20s, with one child, and an (almost) average income is not peculiar in this country; in fact I would argue that such people, or similar, are extremely common. By disincentivising such people from working as my figures would appear to indicate the current problems in this country can only worsen. As pointed out in a previous post, many married women are also disincentivised from working due to the joint taxation system. So while you say that my leaving my job would have no impact on the overall picture in this country due to the fact that someone else would take the job and remove themselves from the live register, I would ask who is it that will take my job? It seems it is suited only to unmarried, childless people or the spouses of already low to middle income earners. Young, single, childless people are the most mobile in terms of labour, in that they can up sticks and go wherever they like almost at the drop of a hat, yet it seems we have a system that is hugely dependant on such people to work to pay taxes to cover the services & benefits of those for whom working no longer makes any sense. How long can the most mobile group in society be overtaxed to cover these societal costs before they choose to exercise their mobility and emigrate?

allibastor

JustMary wrote: »

Get married. Makes a huge difference to your tax credits, and would likely blow your calculations out of the water.

not really. i earn a good amount and pay the higer rate of tax for well over 15k a year. getting married next year and my take home will go up by 312.5 a month. then the misses loses a lot of other stuff like medical card etc. not really a huge saving if you ask me

Mrs OBumble

Whoknos wrote: »

, south Dublin. ... the rent supplement in this area for a couple with one child is EUR 875,

Have you looked at exactly what accommodation is available in that area for 875/week, and how suitable that is for a family with a child?

Relatively speaking, it's likely to be similar to what you can get in Wicklow for the rent-cap there.

SCOOP 64

allibastor wrote: »

not really. i earn a good amount and pay the higer rate of tax for well over 15k a year. getting married next year and my take home will go up by 312.5 a month. then the misses loses a lot of other stuff like medical card etc. not really a huge saving if you ask me[/QU

Would you still get a medicalcard on what you say a good amount?

This is one of my concerns ,losing my medical card going back to work, my wife needs alot of medication.
Thought vou would have be on low income for full medical.

Mrs OBumble

allibastor wrote: »

312.5 a month. then the misses loses a lot of other stuff like medical card etc. not really a huge saving if you ask me

300 yoyo per month, not a hugh saving????

Even allowing for 100 per month for medical expenses (very generous, if you're young), that's still a lot of dosh in my books.

Save it for four years, and you'll have the deposit for a house in many parts of the country.

Mrs OBumble

Dreams:

Jellicoe wrote: »

Knock up girlfriend asap. She'll get loan parents and a council house in a flash.
Move in on the QT as a cock lodger. After 10 years, get GF to buy house for max. discount with council loan. and sell/lease back to local authority.

Reality:

Knock up girlfriend asap. She'll get sole parents, and go on the council housing list. In the meantime, she had to rent privately in somewhere that costs less than the rent cap. Good luck finding that house, and coping with the damp etc.

Move in on the QT as a cock lodger. After two months, a nosy neighbour or religious elderly relative or jealous ex will report her to Welfare. (Yes, I've seen some typical letters these folks write.) Best case, she will have her sole-parents cut and you will have to suppport her. Worse case, she'll be charged with fraud, and you'll end up raising the child (on sole parents!) while she serves her sentence.

Lots of other possible scenarious the middle - but even if after 10 years, GF managed to to buy house for max. discount with council loan. and sell/lease back to local authority - where are you going to live then? 'Cos you wont' be eligible for council housing any more.

chris85

OP, I think you are basing your calculations on a few assumptions which are likely to change over the next couple of budgets. As I can few it the assumptions you have are:

• State benefits will be fixed over next few years - this is not going to be fixed and will move downward both on monetary value and the enforcement (Jobseekers is for jobseekers and you wont be seeking a job)
• Your income is fixed from job - seek a pay rise or seek employment in another company maybe
• Benefits are stable - as anyone on benefits will tell you they get stopped often for whatever reason and need to be reassessed. This can mean weeks without benefits at times.
• Quality of life - Many people go mad without work, even with the pressure of a child to look after many people enjoy work as it gives them a social interaction away from family life which can be tough at times

Whoknos

chris85 wrote: »

OP, I think you are basing your calculations on a few assumptions which are likely to change over the next couple of budgets. As I can few it the assumptions you have are:

• State benefits will be fixed over next few years - this is not going to be fixed and will move downward both on monetary value and the enforcement (Jobseekers is for jobseekers and you wont be seeking a job)
• Your income is fixed from job - seek a pay rise or seek employment in another company maybe
• Benefits are stable - as anyone on benefits will tell you they get stopped often for whatever reason and need to be reassessed. This can mean weeks without benefits at times.
• Quality of life - Many people go mad without work, even with the pressure of a child to look after many people enjoy work as it gives them a social interaction away from family life which can be tough at times

Thank you for your input Chris. However, I would argue points 2 & 4 are irrelevant, and that assumption 1 doesn't represent a variable between employment & unemployment. Point 3 just seems to be one of those things, but is only a conditional in that it may never occur.

I say point 1 does not represent a variable as my income from employment is just likely to be reduced through increased taxation as welfare is to be reduced monetarily. As regards enforcement, it is surely not difficult to appear to be looking for work. For example, if I applied solely for CEO roles with fortune 500 companies I would be actively seeking work, but at little risk of ever finding any.

Point 2 I would deem irrelevant as I would be just as, if not better able, to seek alternative, better-paid employment in another company if my free time was increased through unemployment. Pay rises are certainly not a runner in my current organisation.

Point 4 - I have covered this in previous posts. People cannot be expected to work due solely to the fact that it offers a social outlet. The fourth "commandment" of economic theory is that people respond to incentives (generally meaning financial incentives). If I require a social outlet only, and paid employment can offer me no financial incentives to engage, then surely I would be better off joining a football team, or volunteering in any or every area that interests me, rather than only accepting what social outlets are offered to me by potential employers.

LeftBlank

Whoknos wrote: »

Point 2 I would deem irrelevant as I would be just as, if not better able, to seek alternative, better-paid employment in another company if my free time was increased through unemployment. Pay rises are certainly not a runner in my current organisation.

If you voluntarily quit your job, would you be able to say anything constructive about why you left? This would be important as in my experience employers are always interested in reasons behind leaving and saying you left because you worked out that you're better off on benefits would not look good.

Also, most people wouid argue (myself included) that it's much harder to get a new job from a position of unemployment.

I think you are looking at this in the wrong way. You are looking at it based on numbers alone without any recognition of the other benefits of having a job bring. Have you thought about how you would fill your days if you were unemployed?

Whoknos

LeftBlank wrote: »

If you voluntarily quit your job, would you be able to say anything constructive about why you left? This would be important as in my experience employers are always interested in reasons behind leaving and saying you left because you worked out that you're better off on benefits would not look good.

Also, most people wouid argue (myself included) that it's much harder to get a new job from a position of unemployment.

I think you are looking at this in the wrong way. You are looking at it based on numbers alone without any recognition of the other benefits of having a job bring. Have you thought about how you would fill your days if you were unemployed?

A whole host of reasons could be offered for why I left. There is an unwritten rule in my industry that references from previous employers are neither positive nor negative no matter the circumstances of your leaving. At any rate, in the current economic climate, I left as I was let go due to decreasing workload as a result of challenging market conditions is a valid and fairly unquestionable reason for anyone being moved on from a job.

As regards how I would fill my days, I have a young child at home with whom I could spend more time. Or alternatively, as brushed upon in my previous post, I could take up hobbies or volunteering opportunities. You say I am looking at it from a purely numbers perspective, but work is a numbers game. If I offered you a job right now, but you would have to pay me 50 euro week to do it would you accept? What if I promised you the people you were very nice, would you accept it then? Or if there were various social events associated with working in my company, would you then agree to pay me 50 euro a week to work there?

I hope you answered no to my above scenarios. People work in order to gain money. It is a trade off of their time, labour & expertise in exchange for capital and/or profit sharing from the employer. Any employment that does not offer financial incentives to engage is effectively volunteer work and as mentioned previously, engaging in such volunteer schemes or taking part in sports are viable, cheap alternatives to the other benefits having a job brings that you mention.

chris85

Whoknos wrote: »

Thank you for your input Chris. However, I would argue points 2 & 4 are irrelevant, and that assumption 1 doesn't represent a variable between employment & unemployment. Point 3 just seems to be one of those things, but is only a conditional in that it may never occur.

Point 3 is not irrelevant. income from a job is stable, income from benefits can be stopped at times and due to the dependancy on this low fixed income it would be difficult to manage.

Whoknos wrote: »

I say point 1 does not represent a variable as my income from employment is just likely to be reduced through increased taxation as welfare is to be reduced monetarily. As regards enforcement, it is surely not difficult to appear to be looking for work. For example, if I applied solely for CEO roles with fortune 500 companies I would be actively seeking work, but at little risk of ever finding any.

Build in the liklihood into calculation then. Benefits will get cut more, Good place to start on testing your calculations. At least with work you have a choice to move down the line to a better job with increased pay.

Whoknos wrote: »

Point 2 I would deem irrelevant as I would be just as, if not better able, to seek alternative, better-paid employment in another company if my free time was increased through unemployment. Pay rises are certainly not a runner in my current organisation.

Easier to get a job when in a job. Employers ask more questions about a candidate who has the qualifications but not working. Why not? A good answer will help. Your answer would not. I went unemployed without state benefits to complete a masters degree, funded and supported by myself, thats a good reason.

Point 4 - I have covered this in previous posts. People cannot be expected to work due solely to the fact that it offers a social outlet. The fourth "commandment" of economic theory is that people respond to incentives (generally meaning financial incentives). If I require a social outlet only, and paid employment can offer me no financial incentives to engage, then surely I would be better off joining a football team, or volunteering in any or every area that interests me, rather than only accepting what social outlets are offered to me by potential employers.[/QUOTE]

Thats a personal thing for you to decide. As many have said it is what happens to people. I am in teams and other social outlets but if not working would go a bit mad I think. Again thats a personal thing so no problem there.

We also dont all work for financial incentive purely. I am driven by financial incentive in a way but would take on more responsibility for no money extra if it aided my long term careers. I am driven a lot by personal development and the benefit to my long term career.

UCDVet

Jellicoe wrote: »

Amateur. Worst financial mistake you could ever make benefits wise. Never get married.

Knock up girlfriend asap. She'll get loan parents and a council house in a flash.
Move in on the QT as a cock lodger. After 10 years, get GF to buy house for max. discount with council loan. and sell/lease back to local authority.

^THIS * 1000

Getting married is very bad financial decision. And it's very difficult to undo.

kippy

UCDVet wrote: »

Jellicoe wrote: »

Amateur. Worst financial mistake you could ever make benefits wise. Never get married.

Knock up girlfriend asap. She'll get loan parents and a council house in a flash.
Move in on the QT as a cock lodger. After 10 years, get GF to buy house for max. discount with council loan. and sell/lease back to local authority.

^THIS * 1000

Getting married is very bad financial decision. And it's very difficult to undo.

And having a kid isn't?

loyatemu

someone asked about the tax benefits of marriage earlier - you can put the figures into http://www.hookhead.com/Tools/tax2012.jsp and work it out yourself (everyone's circumstances are different due to pension payments BIK etc).

All things being equal, on a salary of 40k I reckon you're about 4k a year better off (assuming the wife isn't working)

Single Person
-Tax Credit: 1650
-PAYE Credit: 1650
-Standard tax band limit: 32800

Married, one income, with children:
-Tax credit: 3300
-PAYE credit: 1650
-Home Carers Credit: 810
-Standard tax band limit: 41800

relax carry on

loyatemu wrote: »

someone asked about the tax benefits of marriage earlier - you can put the figures into http://www.hookhead.com/Tools/tax2012.jsp and work it out yourself (everyone's circumstances are different due to pension payments BIK etc).

All things being equal, on a salary of 40k I reckon you're about 4k a year better off (assuming the wife isn't working)

Single Person
-Tax Credit: 1650
-PAYE Credit: 1650
-Standard tax band limit: 32800

Married, one income, with children:
-Tax credit: 3300
-PAYE credit: 1650
-Home Carers Credit: 810
-Standard tax band limit: 41800

Max relief available in a joint assessed case with one income + dependant children equals €1650 + €9000 at 21% (1890) + €810. Total €4350.