Predictions for a low earning single mum

ash23

I feel sick at the thought of the budget.

I work full time and get FIS and a medical card plus child benefit.
By the looks of things my FIS and child benefit will be cut. I just about qualify for my full medical card and if I lose this, on top of the additional medical costs, I will have to pay the income levy and my PRSI contributions will increase.

Any rumours about whether they are amending medical card limits.
I could just about deal with the cut to child benefit and FIS but if my wages decreased due to taxes I might as well just pack in the job and go on social welfare

Ronando

This is not an easy one, as they'll have to start taxing 'average' earners in this country at some point, and the sooner the better.

Ireland has the most generous tax-free allowances and among the most generous social welfare payments in the world. The typical earner in Ireland earns about €25k but only pays 4% in income tax, compared to 20% in most other developed countries.

Getting that up to 10% would be a necessary start for the government, but then the flipside is precisely what you talk about, "perhaps it's better to go on social welfare". They will also be (or at least should also be, to preserve the incentive to work) reducing jobseeker's benefits and allowances.

I'm not an expert so I don't know what's what in relation to the medical cards, etc., but I get the feeling the government will have failed with this Budget if people like you decide to go on social welfare after today, and succeeded if you - and I and everyone - thinks "the Budget is tough/very tough, but there's nothing for it but to keep on working and get through to the other side".

The_Honeybadger

Ronando wrote: »

This is not an easy one, as they'll have to start taxing 'average' earners in this country at some point, and the sooner the better.

Ireland has the most generous tax-free allowances and among the most generous social welfare payments in the world. The typical earner in Ireland earns about €25k but only pays 4% in income tax, compared to 20% in most other developed countries.

Getting that up to 10% would be a necessary start for the government, but then the flipside is precisely what you talk about, "perhaps it's better to go on social welfare". They will also be (or at least should also be, to preserve the incentive to work) reducing jobseeker's benefits and allowances.

I'm not an expert so I don't know what's what in relation to the medical cards, etc., but I get the feeling the government will have failed with this Budget if people like you decide to go on social welfare after today, and succeeded if you - and I and everyone - thinks "the Budget is tough/very tough, but there's nothing for it but to keep on working and get through to the other side".

I have friends who have been saying for some time that they would be better off on welfare. With rent supplement and other benefits included and a few nixers thrown in this may very well be true for alot of families. Personally I would always like to be working in formal employment but I can see how welfare is attractive to some. Difficult to see what can be done about this unless they drop the minimum wage, which would be unpopular to say the least.

ash23

In theory I'd agree. But in terms of taxes etc, other EU countries have cheaper rental costs and childcare costs.
My child is in part time childcare, full time in the summer, Creche and rent take over 50% of my 24k per year salary.
Leaving me 12k per year for everything else. I get FIS so that brings it up to €13800 roughly after rent and creche.

If I were on OPFA I'd be getting rent allowance and paying the minimum contribution of 24 e per week = 1250 per year.

Income would be 230 per week from One Parent Family Allowance plus fuel allowance of €20 per week plus back to school benefit of €200 per year giving me an income of 13200 with no childcare fees.

So after rent I'd have an income of approx €11950.

So I work a 40 hour week for an extra €1250 per year, or 24 per week. Lose FIS or increase my taxes and it's costing me money to work.

Something has to be done about childcare costs. If my child weren't in school I wouldn't have a hope of working.

* edited to add, those figures are without me doing anything untoward such as working and not declaring it. My God but figuring that out has just depressed me
I'm basically earning €0.60 per hour lol. I do prefer to work, it sets a better example for my daughter and it keeps me sane. But I must say on those days when she has no school and I have to pull her out of her bed to go to creche, or the days where work has been dismal, I do really wonder why I bother.

Sleepy

ash23, I'm afraid you've missed Ronando's point. If the FIS or tax changes affect you there will almost certainly be a corresponding cut to the OPFA payments to leave the margins the same...

ash23

Sleepy wrote: »

ash23, I'm afraid you've missed Ronando's point. If the FIS or tax changes affect you there will almost certainly be a corresponding cut to the OPFA payments to leave the margins the same...

No I haven't missed the point. But even if they do keep the margins the same it's pretty disheartening for someone to be working full time for the sake of €24 per week and this is what needs to be looked at and amended imo.

I don't think they should cut FIS or increase tax for those on average wage. I don't see the sense in cutting payments that encourage people to work.

Welease

I keep seeing people saying they would be better of going on the social rather than working.. That imho is a very short term blinkered view... how long do you think we can sustain the current (post budget) Social Welfare system with less tax take and increased SW expenditure?

Roll forward a few years, there is a big likelyhood you will be on (a lot) less social welfare and finding it a lot more difficult to get back into the workforce.

ateam

You are working and you receive a medical card and family income supplement! There are people in Africa that don't even have running water. Why do people complain about this country?

ash23

ateam wrote: »

You are working and you receive a medical card and family income supplement! There are people in Africa that don't even have running water. Why do people complain about this country?

I'm not complaining, I'm just worried. People in Africa don't have running water, they also don't have modern facilities, rent to pay, childcare costs etc. Their lives are a world away so it's like comparing chalk and cheese. No different to if I were on here saying there are people with multi million salaries, big houses and no money worries.
I'm talking about MY situation and how I am worried that the budget may have a detremental effect on my ability to afford to work.
I've been working for a long time with very little difference between working and not working. i do so as I enjoy my job and I prefer to work.

I accept that FIS may be affected as will child benefit. My concern was the medical card limit. As this will have a 3fold effect on me should I lose it. My wages will be hit twice along with the additional costs for medical needs.
I think I made that pretty clear in my OP.

I am grateful for my medical card and FIS. They are the only things that make it worth my while financially to work (that and my tax credits).

These are all in the firing line and I'm worried and I am asking for opinions as to what may be hit in todays budget, not a lecture about how grateful I should be to live here and not be in a third world country.

Tigger

don't feel sick prices are droppoing all the time so any drop you get will be reflected

ash23

Tigger wrote: »

don't feel sick prices are droppoing all the time so any drop you get will be reflected

That is true. I've negotiated my rent down this month as my lease was up. But looks like that saving will be eaten up with cuts before I even got it :rolleyes:
Hopefully petrol and heating isn't increased too much as these would be my main expense after food.

Welease

ash23 wrote: »

I'm not complaining, I'm just worried. People in Africa don't have running water, they also don't have modern facilities, rent to pay, childcare costs etc. Their lives are a world away so it's like comparing chalk and cheese. No different to if I were on here saying there are people with multi million salaries, big houses and no money worries.
I'm talking about MY situation and how I am worried that the budget may have a detremental effect on my ability to afford to work.
I've been working for a long time with very little difference between working and not working. i do so as I enjoy my job and I prefer to work.

I accept that FIS may be affected as will child benefit. My concern was the medical card limit. As this will have a 3fold effect on me should I lose it. My wages will be hit twice along with the additional costs for medical needs.
I think I made that pretty clear in my OP.

I am grateful for my medical card and FIS. They are the only things that make it worth my while financially to work (that and my tax credits).

These are all in the firing line and I'm worried and I am asking for opinions as to what may be hit in todays budget, not a lecture about how grateful I should be to live here and not be in a third world country.

Thats understandable, and goes for people all across the spectrum of income.. Many higher paid folks have very high outgoings and commitments that will make if difficult with any negative changes to their bottom line also..

But that said, everyone is going to take a hit for the folly of the last decade or so. The best advice for everyone is to realise we all own our own futures, and our income will be largely defined by the efforts we make to maintain/increase it. They gravy train is slowing down, and people will have to make their own plans for how they maintain their current lifestyles.

Good or bad, that appears to be the future.

The_Conductor

If you are looking for a prediction (as per the thread title) I'd suggest a 6% cut in all social welfare entitlements across the board. The income levy to be incorporated into the main tax rate. No change to your PRSI % (but possibly a removal of the employee ceiling- this wouldn't affect you anyhow). I'd also suggest a cut in the minimum wage to EUR7.50 per hour.

ash23

smccarrick wrote: »

If you are looking for a prediction (as per the thread title) I'd suggest a 6% cut in all social welfare entitlements across the board. The income levy to be incorporated into the main tax rate. No change to your PRSI % (but possibly a removal of the employee ceiling- this wouldn't affect you anyhow). I'd also suggest a cut in the minimum wage to EUR7.50 per hour.

OK well I could live with that. It'd only result in about a €4 cut for me really in FIS. I don't pay the income levy because of the med card but even if I had to start paying it, it'd be about €5 per week. I'm above min wage so hopefully if min wage is cut, it won't have a knock on effect on my wages.

dvpower

smccarrick wrote: »

I'd also suggest a cut in the minimum wage to EUR7.50 per hour.

I don't think that would be a budgetary measure.

ash23

OK, need to get this straight in my head

1. Child benefit is down. Will getting FIS enable me to claim the new additional benefit to bring it back up?

2. Fuel is gone up with vouchers for SW dependants. Again, does that include FIS recipients?

3. SW has been cut by roughly 4%. Does it apply to FIS?

Perscription charges, fine, no major issue for me there.
The new tax system remains to be seen if it'll affect me.

Just wondering if anyone can clarify the three things above?
Thanks

nesf

ash23 wrote: »

OK, need to get this straight in my head

1. Child benefit is down. Will getting FIS enable me to claim the new additional benefit to bring it back up?

2. Fuel is gone up with vouchers for SW dependants. Again, does that include FIS recipients?

3. SW has been cut by roughly 4%. Does it apply to FIS?

Perscription charges, fine, no major issue for me there.
The new tax system remains to be seen if it'll affect me.

Just wondering if anyone can clarify the three things above?
Thanks

1. Yes. FIS families will be compensated similar to families on Welfare.

2. That's not clear yet.

3. I don't know. The nitty gritty of the cuts will follow later.

ash23

Thanks. It's all do-able even if the Cb is cut and FIS is cut. I'd be down about 22 per month plus the additional petrol and home heating so it's not too bad at all.
Weight lifted from my shoulders

nesf

The new tax system won't be seen til Budget 2011 I think. I'll be digging through details over the day, if I find anything about your situation I'll post updates here.

The_Conductor

ash23 wrote: »

OK, need to get this straight in my head

1. Child benefit is down. Will getting FIS enable me to claim the new additional benefit to bring it back up?

2. Fuel is gone up with vouchers for SW dependants. Again, does that include FIS recipients?

3. SW has been cut by roughly 4%. Does it apply to FIS?

Perscription charges, fine, no major issue for me there.
The new tax system remains to be seen if it'll affect me.

Just wondering if anyone can clarify the three things above?
Thanks

1. Yes, FIS will be increased by a commensurate amount.
2. Fuel increases will be 1.28c per litre for petrol and diesel from midnight tonight. Increases in gas/homeheating oil/peat briquettes etc does not come in until 1st of May 2010- after the winter and will not be factored into FIS support.
3. 4% cut in social welfare is across the board- other than superannuation- inclusive of FIS.