Work Harder to be Worse Off – Summer Budget

So they slid in a new budget the reason being… well they can. I will have you know that I am not involved into politics and all that, not to mention understand it. I am just aware that unless either you open your eyes with a golden spoon in your mouth, get higher education (land one of those hi-fi jobs everyone wants) or have won the lottery. Life will be difficult. Even more difficult if you are not the usual 2.4 kids and two parent household. A lot of single parents will likely never make enough to give all advantages. They will not have the budget put the fear of God in them to view how much worse off they will become – or how much they are held responsible for the present or any financial conditions.

So has the pleasantly named Summer Budget been a beam of sunshine or a usual British summer and a washout?

The three fundamental cuts have been:

  • £6 billion slice to tax credits, the renewed universal credit and housing allowances (April 2017) – New claimants will miss the credit qualification for more than 2 kids, loosing on average £3,670 per annum.
  • Cuts to employment allowances – presently credits begin to be pulled back once household income exceeds £6420. The amount will come down to £3850. Oh and they will be at the quicker pace too.
  • A 4 year cease in working age benefits – this is assessed to effect 13 million families and also affects the very child benefit that David Cameron vowed to safeguard.
  • All the headlines were bragging about the increase to working families as Osborne likewise increasing the income tax threshold and the new sparkly National Living Wage. These increases don’t compensate for the above mentioned losses though. They didn’t speak about that a lot.

So what about a few cases to understand it a little better, Well as indicated by the figures at Resolution Foundation.

  • A low earning single parent with one kid, working 20 hours a week at £9.35 per hour will be £1,000 a year worse off. That is the benefit linked with the increment in the personal tax allowance is more than offset by decrease in benefit entitlement. To offset this decrease in disposable income would need an increase of £3,400 in earnings – which is equal to one off 35% rise in earnings, 15 years of stable 2% pay rises, or expanding their hours by 7 hours a week.
  • A low earning dual-earner couple with two kids both making 9.35 per hour will be 850 worse off annually. They will require a one-off increase in earnings of 10 percent to overcome these losses which equals to 5 years of stable 2% pay or a 5 hour increase in the second earner’s weekly working time.
  • An average earning dual earner couple without kids where both make 15 per hour will be 350 worse off as an outcome of which is a rise in personal tax allowance.

So I go under the single parent one child category as my older one completes college soon. What should I anticipate? Ah yes less cash even though logically will be making more and If I want to recover that 1000 loss a year I am required to make additional 3400 to accomplish it. That’s just great. And people still seem to think that single parents have it all so easy. As a single mother who works two jobs which comes up to more than a full time job and is still worse than various family types. I hope someone would give me one of them magical saucers.

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