Do Tax Credit Changes Mean It Still Pays To Work?

changes to working tax credits for part time workers

Have you been hit by rent changes to tax credits? If you’re looking at ways to increase your income because you only work part time, you could be in for a shock. It’s been claimed that changes in the benefits system that came into force in April are going to tempt more people to give up part time jobs. The claim was made in relation workers working for less than 24 hours a week. This is typical in the retail/supermarket sector but will effect other workers too.

The fact that the research sample was exclusively union members and the research was sponsored by a union probably means we shouldn’t read to much into the spin on the results. But the fact is that the tax credit system has changed and now many workers are losing working tax credits.

Who is impacted by tax credit changes

Here’s the nub of the matter. Couples with children earning less than £17,700 a year will have to increase their working hours from a minimum of 16 to 24 hours per week or they will lose their working tax credits. This is worth £3,870 per year, or more than £70 a week, to families. The government’s own figures show that more than 200,000 households could be hit – including nearly half a million children.

How are you going to react?

In the current economic environment I don’t believe the union line. We all realise there is too much at stake. Stepping off the work ladder is a dangerous game. But what is more likely to happen (and it’s the point of this site) is that people are going to look for other means of compensating for the loss of working tax credits. And who knows where that could lead you to. Perhaps a new opportunity?

Part time workers are in a unqiue position

It’s not all bad for part time workers. As the UK drifts towards a more self employed orinetated business culture there are opportunities for those who will take them. This applies especially to women who make up 75% of the part time work force. You don’t have to settle for lesss money. There are litterally tens, maybe hundreds of options to earn a bit more money. Not everyone needs to or wants to. The choice of whether it pays you to work is yours.