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Why would anyone take a part time job if they can get benefits?

Discussion in 'General Business Forum' started by Clinton, May 31, 2020.

  1. Clinton

    Clinton UKBF Big Shot Full Member

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    Was speaking with an old friend who owns a mum and pop type micro business. He asked my advice on something which I don't really understand so would appreciate your thoughts.

    He wants to hire his first employee, someone on a part time basis, but is concerned that even at a fair hourly rate (above minimum wage), it won't make sense for most people as they won't end up much better than if they are on benefits... so why would they bother?

    Now I know nothing about the benefits system. There's this Universal Credit thing now, isn't there?

    Q1: If someone is on unemployment benefits/UC is there any incentive for them to get a part time job of say 10 or 20 hrs/week? Is there much incentive, much pressure for them to get back into work?

    Q2. If there is any pressure on unemployed people to get a job, which I suppose there would be, is it the case that the system can be easily played by taking a job and then ensuring you get fired so that you can go back on benefits and reset the clock?

    I tried doing some Googling about unemployment benefits, but ran into "income support" and "working tax credits" and "child tax credits" and all kinds of other complications and simply got myself a headache within a few minutes!
    Posted: May 31, 2020 By: Clinton Member since: Jan 17, 2010
  2. Darren_Ssc

    Darren_Ssc UKBF Ace Free Member

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    A friend of mine is partially disabled, wants to work but is limited in what he can do and, consequently, has found it difficult to get a regular job. He's been on benefits in one way or another for many years. So this is what I know from what he's told me.

    Universal Credit was supposed to simplify the whole process of claiming different benefits and, also, to remove the perverse incentives you allude to which have previously stopped people from taking low paid jobs that result in getting less money overall or so little that it makes the effort futile.

    In theory, this works because my friend moved on to Universal Credit and within weeks he had two part-time jobs. Partly by coincidence and partly via coercion on behalf of jobcentre staff (what they call his work coach).

    However, he found two problems. Firstly his employers started taking him for a ride by increasing his hours, giving him duties that had not been mentioned before hand and short changing him every week one way or another.

    The second problem was that his benefits started to taper off as the months went by to the point where his income from the two part time jobs was no longer being topped-up - save a bit of rent & council tax benefit.

    He was fortunate that his work coach was fairly understanding, given his effort to find work and the extremes to which his employers were taking the p***, He was able to leave both jobs and go back on to benefits 100%.

    Anecdotally, people in similar circumstances have been sanctioned and had benefits stopped for several weeks. I don't know anyone personally but there are enough stories going around to suggest it is true.

    Overall, he was marginally better off working and it gave him some much needed self-esteem but I doubt he'd go through the whole process again. He's almost at retirement age anyway so is just ticking down the clock.
    Posted: May 31, 2020 By: Darren_Ssc Member since: Mar 1, 2019
  3. Mr D

    Mr D UKBF Legend Free Member

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    Stay on benefits and nanny state looks after you. Regular income, not much required to do.

    Get a job and nanny state punishes you by reducing a chunk (or all) of your benefits while also taking some of your hard earned money off you to give to those people nanny state looks after.

    The tax rate for working while on benefits is far higher than even high earners pay in the UK except the queen.

    There is pressure to get people back into work. Incentive not so much.

    Getting fired and trying to claim benefits can be quite a job. Benefit sanction for 3 months is hard to deal with.
    Posted: May 31, 2020 By: Mr D Member since: Feb 12, 2017
  4. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    My wife has a part time job which at 16 hours a week doesn’t make sense if benefits were available. Our “household” (me) earns too much for her to be eligible for any benefits, so it’s work or nothing.

    I would like to think as well that there is a sense of moral motivation for many to go out and work instead of relying on benefits.
    Posted: May 31, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
  5. ffox

    ffox UKBF Regular Free Member

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    Hi @Clinton

    It isn't simple benefits v work equation. Part time work is great for many in the community who don't have access to benefits.

    Think pensioners who want to work, think people who spend most of their days looking after their own children, think students, think people who already have another part time job.

    Add to that those who do get benefits, but would rather work. Quite a range to go at there.
    Posted: May 31, 2020 By: ffox Member since: Mar 11, 2004
  6. MBE2017

    MBE2017 UKBF Ace Free Member

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    Plenty like part time work, not up to date with the system, but from some of my wife’s friends my understanding is they will be slightly better off financially if they get a job, but maybe by £1-200 per month max if they are on certain benefits.

    One girl I was speaking to wouldn’t take a part time job since she gets carers benefit for a young disabled son, which comes in regular as clockwork. If she gets a job she can only work something like 3hrs a day, before losing the benefit, which leaves her approx £10 a week better off. She would pay more to go toand from a job. Can’t blame her in this instance, she is on low money, and cannot spare any more time.

    All said and done, for myself, it is the unseen benefits rather than monetary that would attract most people. People to mix with, a sense of purpose etc.
    Posted: May 31, 2020 By: MBE2017 Member since: Feb 16, 2017
  7. gpietersz

    gpietersz UKBF Ace Full Member

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    I am not exactly up to date on this, but under the old system I know people would lose 60%+ of their benefits if they earned more.

    So if you work part time and earn a £100/month, you would actually only get £40. If you have some extra expenses like travel to work it would be even less.

    I am pretty sure somewhere on gives a simple number for reduction in benefits.
    Posted: May 31, 2020 By: gpietersz Member since: Sep 10, 2019
  8. gpietersz

    gpietersz UKBF Ace Full Member

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    Posted: May 31, 2020 By: gpietersz Member since: Sep 10, 2019
  9. atmosbob

    atmosbob UKBF Ace Free Member

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    My business was established in a village remote from lots of job opportunities. The staff I employed had different motivations to work for me. I was very flexible on hours worked which suited women with young children and school hours to work part time. My 3 main employees had no special reason to work for me when they started. One worked for me for 27 years, another 20 years and a third for 15 years. When I retired I gave them the business.

    Over the years I had many other potential part-time employees but they were often held back by narrow sighted views of a jobs potential.
    Posted: May 31, 2020 By: atmosbob Member since: Oct 26, 2009
  10. Mr D

    Mr D UKBF Legend Free Member

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    Or just a different view / ambition / idea of what they want than you.
    Posted: May 31, 2020 By: Mr D Member since: Feb 12, 2017
  11. Aniela

    Aniela UKBF Regular Free Member

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    1) Incentive wise, you're not that much better off working but you are technically better off working.

    Pressure wise; you have to spend a minimum of 35 hours a week, looking for jobs, if you don't have one. You have to log what you done in those hours. If you don't you will get your payments stopped for a period of time. People on UC are also assigned a 'manager' who keeps check on what you're doing. They ensure you're applying for jobs you can actually do, make sure you're actually applying and they can require evidence of applications etc. If they spot you're taking the mickey, they will halt your payments for a period of time. "Sanctioned" is their official term for having payments halted.

    If they feel like you're trying to screw the system they will dig deeper and ask you to prove the 35 hours of job search a week too... An hour on the bus to go to town to apply for jobs, do you have bus ticket to prove travel? Etc.

    2) This does happen. People apply for job and then do the job slowly for example, on purpose to get fired. What happens though is if the 'manager' of that person sees that it's common issue, they're payments get halted for a period of time.

    Are there ways around it? Yes. You would still need to do the 35 hours of job searching a week though and like I said, if you get to stage of not finding any work after a long time of searching, they will start making you actually prove the 35 hours of job searching requirements.

    That itself is then a job.

    There are some flaws to it all. If I ever had to do that, I would write a script that applies to jobs automatically. I could turn 35 hours of job searching into a 10 minute job. However, the job center doesn't take things like that into consideration. You still need 35 hours of job searching.

    The job centre gets a lot of crap from people being sanctioned but a lot of the time, it is because people are taking the piss.
    Last edited: May 31, 2020
    Posted: May 31, 2020 By: Aniela Member since: Mar 28, 2020
  12. Aniela

    Aniela UKBF Regular Free Member

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    On first glance you're 37% better off (paywise) than on benefits and they push that number all the time to people on benefits.

    What if the job is an hour away in the car? That's 2 hours of fuel each day that you wouldn't have to spend on benefits. Are you then still 37% better off?

    What if you've had to buy a car to get to a job; when you've never needed a car before? All the costs associated with a car come into play. You're certainly not 37% better of then.

    It's the same as the 80% furlough scheme. Are you really getting 80% of your wage if you're then paying tax and national insurance on that? That's not really 80% of your pay per say. It's one of those "it is but it isn't" things.
    Last edited: May 31, 2020
    Posted: May 31, 2020 By: Aniela Member since: Mar 28, 2020
  13. Darren_Ssc

    Darren_Ssc UKBF Ace Free Member

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    It's a long time since I worked for anyone and it's easy to lose sight of what it can be like doing a low paid job. My friend mentioned above was doing light cleaning work as one of his part time jobs, He wasn't really up to it but the agency concerned was having such a hard time finding anyone that they offered him the job anyway. The reason for this was because it was in a remote location and for only 6 hours but over 3 nights.

    Within 2 weeks he found that his 2 hour shift became a 3 hour shift for no extra pay because they had altered the alarm system to ensure he could only start and finish at set times which didn't correspond with his contracted hours.

    His wage was always less than what it should have been with 'the spreadsheet' often cited as the culprit although never amended.

    I won't get into his 2nd 'job' other than to say it was much worse.

    All of this for what amounted to an extra £40 or so a week by the time you deduct cost of travel, etc. Let's forget I was taking him and picking him up from the first job since it was a 4 mile walk each way otherwise.

    It seems, for some, that working for a living offers very little other than a bit of dignity and I don't wonder why some people choose not to bother?
    Posted: May 31, 2020 By: Darren_Ssc Member since: Mar 1, 2019
  14. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Ace Free Member

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    My older brother is a pharmacist, and when I was in university I worked behind the counter in his shop at weekends and a few afternoons through the week.
    My main role was the supervised daily dispensing of methadone. The rest of the staff were females, some of whom were a little intimidated by going into the consultation room with heroin addicts to watch them drink their little bottle of green medicine, and so I did pretty much all of the 30 or so “dailies”.

    All in all, I quite enjoyed it and I always tried to be quite friendly with our customers but one conversation really sticks in my mind. There was a young woman in her 20s who was on daily methadone and I ended up having a conversation with her about going to work. She reckoned that getting out of her bed, getting a taxi down to the chemist and coming in every single day for her prescription was “like a full time job”! It was an exhausting routine for her, and she could get benefits for doing nothing otherwise, so why go to work and put in more effort for similar money??
    Posted: May 31, 2020 By: Gordon - Commercial Finance Member since: Jun 26, 2017
  15. Alan

    Alan UKBF Legend Full Member - Verified Business

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    Unfortunately those on benefits effectively get 100% taxation until they go above the threshold where earning beat benefits.

    The problem actual stems more on rent benefit and council tax benefit from the council.

    It works a bit like this - if you earn nothing you get your rent paid ( up to a cap of suitable sized property) and your council tax paid.

    You also get around ( single person ) about £75 ( may be a touch more now but let us use £75 ) a week 'benefits'.

    Soon as you start to earn anything your rent benefit and council tax relief are reduced, to leave you with ...... £75

    So in my area, a single person in a 1 bed flat gets £173 a week rent benefit and typically £166 a week council tax benefit.

    So it is simply not worth working until your earning exceed £339 a week.

    So You would have to work a 38 hour week on minimum wage to 'break even' and be left with exactly the same as if you did nothing.
    Posted: May 31, 2020 By: Alan Member since: Aug 16, 2011
  16. Mr D

    Mr D UKBF Legend Free Member

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    166 a week?
    Or per month?

    £1800 a year c/tax or £8K c/tax?
    Posted: May 31, 2020 By: Mr D Member since: Feb 12, 2017
  17. Alan

    Alan UKBF Legend Full Member - Verified Business

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    My error - I need food....

    £211 total a week - break even on MW = 24 hours

    Thought 38 hours was bit high.
    Posted: May 31, 2020 By: Alan Member since: Aug 16, 2011
  18. Mr D

    Mr D UKBF Legend Free Member

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    So a 16 or 24 hour NMW job wouldn't be a good idea for them.

    Two of the common part time hours jobs.
    Posted: May 31, 2020 By: Mr D Member since: Feb 12, 2017
  19. DontAsk

    DontAsk UKBF Ace Free Member

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    To turn your argument around, people on furlough could be saving on travel, petrol, expensive coffees/lunches, shoe leather, etc., "It isn't but it is" sort of thing.
    Posted: May 31, 2020 By: DontAsk Member since: Jan 7, 2015
  20. Aniela

    Aniela UKBF Regular Free Member

    176 25
    You are always better off working than being on UC. There is not a break even point. Even if you worked 4 hours a week, you're better off.

    Yes rent benefit is reduced for but it's not that if you earn £1, you lose £1 of house benefit. Housing benefit is reduced by £65 for every £1 you earn for example.

    Your earnings from working always outscale what you get on benefits.

    It may not always work out much more, but it's always more.

    The benefits system would be highly flawed if you worked 10 hours a week and earned less. It doesn't quite work like that.
    Posted: May 31, 2020 By: Aniela Member since: Mar 28, 2020