Transcript Those on Low Income

Those on Low Income
Bridget Robinson, Sam Murdoch,
Gillian Swarbrigg, Emma Sim &
Lewis Ingram !
Contents
• 1. Minimum Wage
– 1.1 Disadvantages of Minimum Wage
• 2. Income Support
• 3. Working Tax Credits
• 4. Local Housing Allowance
– 4.1 Controversies and Successes
1. Minimum Wage
Current NMW rates;
There are different levels of NMW, depending on your age and whether you are an
apprentice. The current rates (from 1 October 2011) are:
£6.08 - the main rate for workers aged 21 and over
£4.98 - the 18-20 rate
£3.68 - the 16-17 rate for workers above school leaving age but under 18
£2.60 - the apprentice rate, for apprentices under 19 or 19 or over and in the first
year of their apprenticeship
1.1 Disadvantages of Minimum
Wage
• A minimum wages can cause cost push inflation.
• Minimum Wage can cause unemployment if
labour markets are competitive.
• The competitiveness of UK goods abroad can
suffer compared with low wage economies, such
as China and India.
3. Working Tax Credits
• What are Working Tax Credits: Working Tax Credits are based on
the hours which you are required to work and be paid for in
return. You are able to claim Working Tax Credits whether you’re an
employee or self-employed. However Work which is described as
being not paid for in return means that he/she will not be entitled to
receive Working Tax Credits. If he/she is caring and/or responsible
for children then this tends to mean that he/she are required to work
a certain amount of hours if they wish to receive Working Tax
Credit.
For someone who is aged 25 or over they would have to do over 30
hours of work each week to be able to benefit from working tax
credits
Likewise for a person who is classed as being “disabled” they also
have to work a required amount of ours before they are eligible for
working tax credits.
•
• Working Tax Credits are paid back to the individual at a later date
4. Local Housing Allowance
•
•
Aim – to help people pay for their rent.
Entitlement;
– must pay rent and be on low income.
– if you’re responsible for paying rent for your house
– If you are paying rent to anyone but the crown
– means tested
Cost to the government – housing benefit had risen
from £14bn to £21bn in the past decade. Reforms
and cuts have recently been made set out in the
2010 Emergency budget by Chancellor George
Osbourne. Cuts save £1.8bn a year. Cost of
£120million a year due to surge in homelessness.
4.1 Controversies and Successes
• Controversies:
– Complexity of system – takes an average of 48 days to process
claims in 2002-2003
– Poor administration – according to shelter 680,000 people are
missing out worth £1bn per year.
– Fraud – the systems lack of monitoring caused fraud and error
caused by admin problems.
– Blamed for unemployment
– Blamed for homelessness
– It has now become uneconomical to have paid work
• Successes
– It prevents many people every year becoming homeless
– It helps put those in need
– The money is being spent on the right thing