Sunday 30 September 2007

Tax Benefit Model Tables (3)

OK, it's Sunday evening, maybe I was going too fast with the last example, let's ask ourselves why single Mum became a single Mum in the first place ...

a) Before she had got pregnant, she was working 35 hours a week for the National Minimum Wage, let's call it 35 hours a week or £195 gross; she was renting privately and claiming housing benefit. Her net income, after housing costs was £102 per week (Table 1.1d, page 19 of pdf).

b) Once she's had the first baby, she gets her rent and Council Tax paid in full and ends up with a net income of £126 (Table 2.1b, page 114 of pdf). Hmmm, not much of an improvement then.

c) So time passes (about 9 months), she has another baby and whizzes to the top of the Council House waiting list, wa-hay, now she's hit the jackpot, her net income soars to £175 per week (Table 2.1a, page 114 of pdf) .

d) A bit more time passes, and along comes Shining Prince who earns £500 a week. Does she take his hand in marriage? Does she f***. Their combined income would fall from £548 (£373 for his net income, Table 1.1a, page 11 of pdf, let's ignore his housing costs + £175 for her net income, from above) down to £328 per week (Table 1.6b, page 92 of pdf).

2 comments:

Scott Freeman said...

Good post. Incentives matter.

Only downside is guilt. When women have children (in the modern world) their hapiness falls because if they work, they feel guilty leaving the kdis at home, and if they stay at home they feel guilty about not working.

So basically the only people who will have a child to make mnoey are twats immune to guilty, but I guess we knew that already!

Mark Wadsworth said...

Agreed, but I wouldn't go so far as to say that women's happiness falls when they have children, the maternal urge (in most) is far too strong. Well this is based on a representative sample of one, being my Mrs.