Merryn's Blog

Working full time? You could still be costing the taxpayer a fortune

The debate about benefits tends to concentrate on the jobless. But huge amounts of taxpayers’ money are going to people in work.

We have written several times before about the problem ofwelfare to workers the way in whichthe UK state effectively subsidises millions of working people's wagesso their employers don't have to. It isn't a subject we intend to drop.

So I was interested to seeDavid Green of Civitas looking at the problem this weekwith working migrants in mind. The debate about migration has long treated work and welfare, says Green, as "mutually exclusive". The coalition is keen to point out that "access to out-of-work benefits will no longer be immediate" and that newly arrived EU nationals will have to wait for housing benefit "at least until they get a job."

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That's fine. But the point is that huge amounts of welfare will still be going to working migrants. Say you are working a 35-hour week and earning £250 a week. Your gross income from working is around £12,900 a year (I am using Green's numbers here). But if you are part of a couple with two children, various benefits will top that up by another £11,927.

You'll get working tax credit (£1,970), child tax credit (£5,976), housing benefit (£2,205) and, of course, child benefit (£1,752).

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You may be working, but you are still costing a huge amount in direct subsidy. Does that matter? It depends which numbers you believe on the long-term benefits or lack of as a result of immigration.

But either way, the problem that the taxpayer is obliged to support millions of low-paid workers really shouldn't be ignored as regularly as it is.

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