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If You Could Make More Money By Going On Welfare Instead Of Working, Would You Do It?

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http://www.zerohedge.com/news/2013-08-22/if-you-could-make-more-money-going-welfare-instead-working-would-you-do-it

Almost three years ago we warned of the consequence of the disincentives for the working man in the US at the lower-income level. Then, last November we noted the dismal fact that 'work is punished' in America for a large majority of the non-elites. And now, as the part-time new normal becomes more and more understood in the mainstream, we ask once again... If you could stay home and relax all day and actually make more money than you do at your current job, would you do it?

Submitted by Michael Snyder of The Economic Collapse blog,

That sounds crazy, but this is actually a very real dilemma for millions upon millions of Americans. According to a shocking new study that was just released by the Cato Institute, people on welfare are actually better off than minimum wage workers in 35 U.S. states. And in 13 states, those on welfare actually do better than those making $15 an hour. So why bother?

It is very difficult to find a job in this economy, especially a good one. As I mentioned yesterday, seven out of every eight jobs that have been "created" since Barack Obama has been president have been part-time jobs. Why slave away flipping burgers, stocking shelves for some retail giant or working for some temp agency when you could just sit home and make more money collecting government checks? Yes, there is definitely a minority of Americans that hate the idea of becoming dependent on the government and would never want to take advantage of the system like that, but that minority seems to be shrinking. At this point, about half the country gets money from the government each month anyway, so why not collect "your share"?

If someone is offering to give you something for free, it is only human nature to be at least a little bit tempted. And right now the federal government is making it extremely tempting to give up on work entirely and become a permanent welfare check collector.

Before people start getting really upset, let me once again reiterate that most of the people that are receiving financial assistance from the government actually need it. Not everyone is abusing the system, and not everyone is using their food stamps to buy lobster.

Poverty in the United States has absolutely exploded in recent years, and our economy simply does not produce enough jobs for everyone anymore. We certainly do not want those without jobs to go hungry or to be sleeping in the streets.

But what we have today is a situation where there is a huge incentive in many states to actually give up on work entirely and become a dependent of the state instead.

Looks like global welfare dependency is everywhere. In America just like the UK if you are on low pay you need a subsidy to live. Paradoxically this means that even more people will get sucked into this dependency higher up the wage scale. This will continue until the exponential problem causes the economics of this to fail. At what point that is no one knows but the big corporates will be making lots of money from this dependency, whilst championing that they are genius's of the free market.

It's clearly another bubble, but when the cost of living is so high and the system is rigged it's only logical that you become a state welfare dependent.

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Merely cogs in the wheels if the welfare industry.

Turning prisons into call centres is just the start.

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"If someone is offering to give you something for free, it is only human nature to be at least a little bit tempted."

I find that when I am taxed excessively, I work less.

At the moment, my effective marginal rate is over 60%, it would be over 70% if I had a student loan. I now deliberately keep my income lower to keep 100% of child benefit. I don't do evening contract work any more, just not worth it at those marginal rates.

If I could make more money by going on welfare, I would do it. Rather than sit around, I would start inventing things.

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Id say this now runs up to around half the UK workforce and rising.

For millions and millions in the UK the best route is go self employed and claim tax credits,even if they never do any work.

Then due to the price of food and fuel shooting up get an allotment from the council,most around £5-£10 a year.Spend your time instead of working for nothing on NMW growing your own food.

By the time you take the tax credits,free food,less expense on petrol/diesel,no income tax,hardly any NI,less council tax,less fuel tax you are way better off and don't have to suffer the 0 hours contracts and bullying of the modern workplace.

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Id say this now runs up to around half the UK workforce and rising.

For millions and millions in the UK the best route is go self employed and claim tax credits,even if they never do any work.

Then due to the price of food and fuel shooting up get an allotment from the council,most around £5-£10 a year.Spend your time instead of working for nothing on NMW growing your own food.

By the time you take the tax credits,free food,less expense on petrol/diesel,no income tax,hardly any NI,less council tax,less fuel tax you are way better off and don't have to suffer the 0 hours contracts and bullying of the modern workplace.

I guess that that model only works if you are renting, if you had a mortgage it would be a different story?

We had considered something similar to this - using our 'deposit' to buy around 10 acres of farmland and then claim self employed and rent a property as sure as hell would not be allowed to build on on our own land.

that way we only have to make a small income selling eggs, cider (under 50 hectoliters ;) ) and we get to keep our wealth (the land) and get a free ride from the tax payer.

All excess income can easily be transferred into 'expenses'.

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If someone was handing me my current salary, and I didn't have to commute, could take leave whenever I liked, do whatever hours I wished etc, I'd bite their hand off! But I would make productive use of the time - it would be like a Business Startup Grant.

If I didn't have any ambition or imagination then I would rather work in any job than be given a hand out purely for my own sanity.

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This is a low-pay problem not a welfare problem. It seems incredible that anyone in the US would choose not to work given the way that benefits work there. You do not want to get sick under this system. But, if people are making that choice, the only conclusion is that minimum-wage jobs do not even provide slavery-level sustenance.

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I guess that that model only works if you are renting, if you had a mortgage it would be a different story?

We had considered something similar to this - using our 'deposit' to buy around 10 acres of farmland and then claim self employed and rent a property as sure as hell would not be allowed to build on on our own land.

that way we only have to make a small income selling eggs, cider (under 50 hectoliters ;) ) and we get to keep our wealth (the land) and get a free ride from the tax payer.

All excess income can easily be transferred into 'expenses'.

Depends on the size of the mortgage really.The ideal is for people who own their homes to go down this route and the bigger the mortgage is the more the choice is removed.

Renting works due to HB as well at the moment yes.My brother lost his job (low pay) and now does this (his house is fully owned) and now has 2 allotments going.Hes producing a lot of quality food now including chickens.He sells quite a lot of £5 veg bags a week.Cheaper than supermarkets by a long way.As hes self employed on tax credits he can make up to £120 a week before they are affected,all legal.

I doubt hel work for an employer again.

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This is a low-pay problem not a welfare problem. It seems incredible that anyone in the US would choose not to work given the way that benefits work there. You do not want to get sick under this system. But, if people are making that choice, the only conclusion is that minimum-wage jobs do not even provide slavery-level sustenance.

Its hardly a low pay pay problem, the UK/US are in the upper quartile of global wages. It is a distortion problem. How much are tax credits in the UK 30Bn?

Increase the untaxed threshold by that 30Bn reduce the 40% rate equivalently to remove the benefit at that end and the distortion is removed. You can add to the 20Bn housing benefit in to push that level up further, If people have 10 Quid spare at the end of the week then thats the true rental value of the accomodation.

If companies dont pay enough to live on on that basis, either wages will increase via striking etc or the job doesnt get done or purchase prices come done. When enough are homeless and angry enough to genuinely act govt will deal with the hoarding and license restriction they self impose on housing/land

Its purely the perverse distortion of govt intervention (price fixing the whole economy either up or down) chuff all to do with wages

Edited by Maria Gorski

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I spoke to a long term unemployed friend recently who has been on Working Tax Credits ( WTC ) @£50 a week .

He gets full hosuing benefit for his housing coop flat.

After being unemployed for 5 yrs he was virtually unemployable, but managed to get the odd small job in the black economy building trade.

He's now been unemployed for 30 yrs , but went on WTC in last few yrs as he gets no hassle from the dole office (who would possibly force him to do training / jobs like cleaning etc. )

Downside is he only gets £50 from HMRC not £70 from dole office, but if he gets the odd job it works for him

He told me the other month that his friend went to a job centre, run by a private firm (Australian I think) . They advised him to go on WTC, as the firm would get a bonus payment for getting him off unemployment to self employed.

He was clearly unemployed, not self -employed and they sold it to him on him getting less hassle from JC (run by them) but would get £20 less & would not have to sign on.

This seems like a massive fraud imo, and millions must be hidden from the unemployment figures in the way - zombie / ghost workers.

Edited by Saving For a Space Ship

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After being unemployed for 5 yrs he was virtually unemployable...

That would be my biggest fear I suppose. I have worked hard over the years (well since 2004) to build up skills that are valued in the industry I work in.

Thing about this self employed malarkey is:

the car's an expense

dining out / entertaining is an expense

the home office is an expense

clothes (work uniform) are an expense

I only earn £50 per week :o

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I spoke to a long term unemployed friend recently who has been on Working Tax Credits ( WTC ) @£50 a week .

He gets full hosuing benefit for his housing coop flat.

After being unemployed for 5 yrs he was virtually unemployable, but managed to get the odd small job in the black economy building trade.

He's now been unemployed for 30 yrs , but went on WTC in last few yrs as he gets no hassle from the dole office (who would possibly force him to do training / jobs like cleaning etc. )

Downside is he only gets £50 from HMRC not £70 from dole office, but if he gets the odd job it works for him

He told me the other month that his friend went to a job centre, run by a private firm (Australian I think) . They advised him to go on WTC, as the firm would get a bonus payment for getting him off unemployment to self employed.

He was clearly unemployed, not self -employed and they sold it to him on him getting less hassle from JC (run by them) but would get £20 less & would not have to sign on.

This seems like a massive fraud imo, and millions must be hidden from the unemployment figures in the way - zombie / ghost workers.

On the whole, though, it seems like a better deal for the taxpayer. He gets a lower handout (£50 instead of £70), he's permitted to do what little productive work he can, and there's less work for the job centre. Paying him to work makes more sense than paying him not to work.

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I would have thought there are many thousands that are not retired, working or self-employed who are not registered as unemployed........many are living on trust funds for example. ;)

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Perhaps if you have zero drive...and manage to constantly dodge the JC, then living on the dole is for you, but I've been long term unemployed a couple of times, and it was frankly horrible...you merely exist...

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I took responsibility providing the money I needed to exist in the past with no reliance on the benefit system. Out of work, get off your ass and find one. But these were the good times 1997+.

From a contracting point of view the market is volatile. You not a human being anymore you can be hired for 4 weeks then it is back on the heap for a year. Obviously if you cherish mental stability long term this is not the way to go.

Fulltime employment seems to rely on a ridiculous skill set list. Anyone that actually jumps through the hoops to interview stage is either a liar or incompetent at all of the tasks equally. This leaves you 2 routes.

You play the benefit system or find a small company where there HR department is hired on an hourly basis, with no advertising budget and make the best impression you can.

Sterling devaluing, pensions simply do not add up especially for the lower end worker, a payrise is in the past, career progression results in more work and a job title change (and you get to work in your free time). Why work your guts out for a unit of trade that requires you to work even harder just to get by?

You can take WTC £40pw (£11k a year) with the partner on jobseekers £71pw this is the last game in town (at least for a couple with no kids ^^). You do not have to sit idle. Human labor for the masses is bordering on becoming a paper round salary for a 40hour week after bills (rent/mortgage).

So yeah I would if life gets too tough, once the flat is paid off in 4 years.

Edited by pathfinder

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I took responsibility providing the money I need to exist in the past with no reliance on the benefit system. Out of work, get off your ass and find one. But these were the good times 1997+.

From a contracting point of view the market is volatile. You not a human being anymore you can be hired for 4 weeks then it is back on the heap for a year. Obviously if you cherish mental stability long term this is not the way to go.

Fulltime employment seems to rely on a ridiculous skill set list. Anyone that actually jumps through the hoops to interview stage is either is a liar or incompetent at all of the tasks equally. This leaves you 2 routes.

You play the benefit system or find a small company where there HR department is hired on an hourly basis, with no advertising budget and make the best impression you can.

Sterling devaluing, pensions simply do not add up especially for the lower end worker, a payrise is in the past, career progression results in more work and a job title change (and you get to work in your free time). Why work your guts out for a unit of trade that requires you to work even harder just to get by?

You can take WTC £40pw (£11k a year) with the partner on jobseekers £71pw this is the last game in town (at least for a couple with no kids ^^). You do not have to sit idle. Human labor for the masses is bordering on becoming a paper round salary for a 40hour week after bills (rent/mortgage).

So yeah I would if life gets too tough, once the flat is paid off in 4 years.

All the above is about being employed by someone else, and it is a very common mindset.

You can also create your own employment, which could be anything, and you will find that you have a CV that is fit for the job.

Edited by LiveinHope

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Depends on the size of the mortgage really.The ideal is for people who own their homes to go down this route and the bigger the mortgage is the more the choice is removed.

Renting works due to HB as well at the moment yes.My brother lost his job (low pay) and now does this (his house is fully owned) and now has 2 allotments going.Hes producing a lot of quality food now including chickens.He sells quite a lot of £5 veg bags a week.Cheaper than supermarkets by a long way.As hes self employed on tax credits he can make up to £120 a week before they are affected,all legal.

I doubt hel work for an employer again.

A few I know are doing the same and were actively encouraged to do so by jobcentre most just work cash in hand putting the bare minimum through the books which allows them to keep the tax credits

One of them showed me the figures the guy from the back to work program that the jobcentre arranged for him to attend and those figures were the amount he could not go over if he wanted stay eligible for tax credits ,that to me ist proof that it`s a goverment policy

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A few I know are doing the same and were actively encouraged to do so by jobcentre most just work cash in hand putting the bare minimum through the books which allows them to keep the tax credits

One of them showed me the figures the guy from the back to work program that the jobcentre arranged for him to attend and those figures were the amount he could not go over if he wanted stay eligible for tax credits ,that to me ist proof that it`s a goverment policy

....I am sure that there are many that would prefer to buy a £5 veg bag, locally produced, recently picked than plastic covered produce that may have travelled many miles and been kept in cold storage for many hours before being sold for much more. ;)

Edited by winkie

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"If someone is offering to give you something for free, it is only human nature to be at least a little bit tempted."

I find that when I am taxed excessively, I work less.

At the moment, my effective marginal rate is over 60%, it would be over 70% if I had a student loan. I now deliberately keep my income lower to keep 100% of child benefit. I don't do evening contract work any more, just not worth it at those marginal rates.

If I could make more money by going on welfare, I would do it. Rather than sit around, I would start inventing things.

Absolutely my position and thought process. Yes I'm fortunate to have a decent job with a good salary and stable future BUT I'll be damned if I'm going to be taxed off the face of the earth for daring to have the aspiration to do even more. For sure I'm earning quite a bit less having decided to duck the Child Benefit trap but I've made a few adjustments, don't spend on some of the more frivolous things I did (so no VAT for you either Gidiot, you *****) and frankly am feeling better for it. The mortgage will take a year or two more to see off but I'm now very much of the opinion that if it all went tits up on a personal level tommorrow we'd sell up for what we reasonably could and potter off to a life in the sun and a lot less stress. I have little incentive or will to put myself out for this 'hole, that's for sure and my options for getting out are very real, should I finally feel pushed over the edge by the way this country is going.

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My wife works in a bank there was a woman there working part time but only taking 100 less home a month than my wife with her WTC etc for having 2 kids ,one of which has Autism.However she wasn't enjoying work so decided to seek advice about becoming a full time carer to her son.

Long and short of it is now not working she is £250 per month ( its the equivalent of an £18k salary) better off with no expenses to deal with in getting to work.Obviously she gets more because of her son's condition however to me seems a very broken system when you can be ''paid '' more to contribute nothing.

So in answer to the question posed I would like to work and been successful in a career but if the situation was I was better off not working then yes I would do that.For me the benefits system ,NMW and zero hour contracts all need to be addressed.

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Obviously she gets more because of her son's condition however to me seems a very broken system when you can be ''paid '' more to contribute nothing.

I think the moral outrage comes from one person working and suffering for payment which is what they have been told is the right thing to do whilst at the same time someone else is not suffering and yet can be no worse off. So whats the suffering for? Thats unfair etc, therefore wrong.

But I think theres more to it than that. I quoted the above line because it says 'contribute nothing'. I can tell you Ive been in plenty of workplaces where many salaried staff also contribute nothing, but they can hide away in these big companies and get paid anyway.

Then there are the silly public sector 'jobs' we all know about where money is paid from tax payers in exchange for not very much of any use.

But in both of those cases the guy that sits at home all day doing nothing who is not much worse off than the others will be looked down on by most as a scrounger.

So it depends on your definition of what constitutes useful 'work', and indeed what it means to go 'on welfare'. There are many who sit in traffic each morning and sit at a workplace all day who are on 'welfare' just as much as the unemployed.

For me the question is not so much why are they getting something for nothing whilst im suffering its not fair, its more, why am I suffering and what can I do about that? Many see pay as compensation for suffering in a workplace. How about doing work you don't despise, then you won't feel so aggrieved that others aren't as unhappy as you.

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I guess that that model only works if you are renting, if you had a mortgage it would be a different story?

We had considered something similar to this - using our 'deposit' to buy around 10 acres of farmland and then claim self employed and rent a property as sure as hell would not be allowed to build on on our own land.

that way we only have to make a small income selling eggs, cider (under 50 hectoliters ;) ) and we get to keep our wealth (the land) and get a free ride from the tax payer.

All excess income can easily be transferred into 'expenses'.

They seem to be clamping down on this racket now in universal credit. DWP are getting responsibility for it, no longer HMRC, and theres a set floor at the equivalent income of 35 hours NMW per week, after the JC+ check out your expenses.

Edited by Britney's Piers

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When I was unemployed for a while a few years ago i'd go around some local supermarkets on a fairly regular bases grabbing any bargains/mark downs, thus saving money against a full time worker with less/no hours to spare this time searching. I'd also visit the local woolworths most days to see if they were selling certain N64 games at crazy low prices (which I could sell for a tenner more each). + i'd buy the free ads papers to see if any local goods were underpriced, i'd ring up early and grab any bargains (with a view to sell on at a profit). see a pattern forming here for money saving against working? so i'd bite your hand off for the same money on benefits as my work, because - you'd actually be on more.

Edited by motch

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