Forum Topic

Benefits and tax

Not sure of the answer here so seeking guidance.If a person earning say ,£2000, a month also claims benefits (quite legally) do they get taxed on TOTAL income or is the benefit element tax free and so they only get taxed on earnt income.Unlike a pensioner whose state pension (benefit) is taxed if they happen to have another private pension ie its all counted as total income for taxation purposes.

Andy Pike ● 4d36 Comments

Ha, ha, Mr Hawkes, only the one. Just to reiterate I'm not saying polygamous relationships are a good thing or ant laws should be changed; however, the 7th Marquess of Bath had 74 "wifelets" during his lifetime as well as the wife he was married to, and some of our male MPs seem to have a mistress or two as well as a wife, and some female MPs have an additional male partner. If they can afford it and everyone's happy ... but of course that's not always the case as a previous local MP, David Mellor, discovered ...

Michael Ixer ● 5h

Mr Hawkes. Of course not all pregnancies are planned. So I assume you're in favour free abortions on demand for those who feel they're unable to support another child?Some parents are irresponsible but doesn't forcing bringing children up in poverty lead to more social problems later?

Michael Ixer ● 5h

"Young people to lose benefits if they turn down work, says Minister"'Young people will be stripped of their right to claim benefits if they refuse a taxpayer-funded job after 18 months without a job, the work and pensions secretary says.Pat McFadden told the BBC they would need a "good reason" to decline one of the 55,000 six-month placements, to be rolled out from next April.The government has announced the roles could span areas including construction and hospitality - although companies taking part are yet to be confirmed'.https://www.bbc.co.uk/news/articles/cqlke33rzploI can't help feeling that the Labour leadership has just woken up on this damp and dismal Sunday morning and smelt the coffee.Two issues they have to solve to quell the electorate's ire.One is illegal immigration and the second the ever rising benefits bill for those that 'cannot' or chose not to work especially those in the younger age bracket.The root cause of the second issue is that Labour has no policies for energising and growing the economy.Only policies for taxing it and those that work in it.They have got till 15th August 2029.

John Hawkes ● 10h

Mr Ixer'I'm not in favour of punishing the children by pushing families into poverty.'Surely it is the parents who have children they can't afford who push them into poverty not you or me ?Free will gives the power of self-discipline.And those of us that pay for these benefits have a right to question who receives them and why.

John Hawkes ● 11h

The problem with having no limit on the number of children you can have at the state's expense is not just the cost but the resentment it breeds. Why would parents who make rational decisions about family planning be willing to see their taxes rise to pay for other people to have children they can't afford?

Steven Rose ● 12h

Mr Ixer'I'm not advocating polygamy but I suppose if all those involved consent and can support their lifestyle that's their business?'So you are not advocating polygamy but are quite happy for it to be allowed in UK society ?How many wives do you have ?😉😁

John Hawkes ● 12h

Mr Ixer'As I understand it, Islam permits multiple wifes but only for those who can afford it.'You know a lot about a lot.When did this social precept enter the dogma of the Islamic faith and what do you think is the basis for it ?Might it have been a social norm of Arabic tribes for centuries ?

John Hawkes ● 12h

Mr Ainsworth'"One wonders what Mr Brigo contributes in his cash in hand world  teaching women to stretch and strain.Or is every penny and every lesson  tlrecorded.3"'What are you suggesting about Mr Brigo? Do you know something somehow?'Don't worry on Mr Brigo's behalf.He is not shy in coming forward and I am sure he will explain or refute what was said of him.

John Hawkes ● 12h

Thanks, Steven. One could take the view that with an ageing population we need more younger people to grow up and work to generate wealth? I'm in favour of lifting the two child limit on the benefit as I'm not in favour of punishing the children by pushing families into poverty. (And, if we consider Muslim families, the parents aren't going to go to the pub and drink the money away, are they?!)I agree smaller families are generally better but surely that's where education comes in - and we need less religion involved irrespective of what denomination it is (and remember I'm an atheist with no allegiance to any religion).

Michael Ixer ● 13h

The evidence you seek, Michael, lies in the fact that, according to the last Census, 60% of Muslim families have three or more children share the average is 31%. Muslims are also disproportionately affected by poverty  and so I guess are more likely to be in receipt of benefits.However my objection to removing the two child benefit cap is not based on the race or religion of the recipients. I just don't think the system should incentivise people to have more children than they can afford to look after.What is your view, by the way? Do you support removing the cap?

Steven Rose ● 13h

It is all double standards.  We have a bigamy law in this country, surely we should not be giving benefits to anyone who chooses to ignore this law with several wives and children that they are unable to support.

Robert Wheeler ● 16h

Sue. Why target Muslims. Some Roman Catholics, although monogamous, are encouraged not to use birth control and have many children, and I've known secular men who breed more children than they can afford. Surely, Musk and Trump - or the former Prime Minister Johnson - don't set good examples. Yes, I do know, and I've worked with, a number of Muslims (men and women)  who work hard and support their moderately sized families, and are monogamous. I'm not advocating polygamy but I suppose if all those involved consent and can support their lifestyle that's their business?Anyway, my original question was what evidence do you have for your assertion? 

Michael Ixer ● 1d

"One wonders what Mr Brigo contributes in his cash in hand world  teaching women to stretch and strain.Or is every penny and every lesson  tlrecorded.3"What are you suggesting about Mr Brigo? Do you know something somehow?

David Ainsworth ● 1d

@MIWtf does Musk or Trump have to do with our welfare and benefits system? 🙄 It really doesn’t matter how many children they have because they can, and do, support them, and neither of them have several wives on the go at the same time either which in a civilised society is illegal.  Islam does indeed allow a man to have multiple wives but that doesn’t make it right.  However I expect you may have Muslim friends who are upstanding members of society and wouldn’t dream of committing bigamy.  I have no idea which religion Musk follows (if any) but I am sure you know that Trump does not follow Islam, so stop being disingenuous.

Sue Hammond ● 1d

The evidence for what some may say is a racist point of view? As I understand it, Islam permits multiple wifes but only for those who can afford it. Elon Musk seems in favour of that way of living given his multiple children by various partners? I assume you disagree with hs ethics? Mr Trump doesn't seem very monogamous either, I don't think he follows Islam, does he - although he seems great friends with the Saudis and Qataris so perhaps he is?Not saying I'm agreeing with Islam allowing multiple wives but many non Muslim families don't follow the standard monogamous family structure. 

Michael Ixer ● 1d

The issue of benefits is difficult, especially where children are concerned. Clearly there are deserving cases where families with three children or more children meet with some tragedy such as the death of the breadwinner pr maybe just the loss of employment. Perhaps such families could be dealt with on a case by case basis. But I don't think the benefits system should provide an incentive to prospective parents to have more children than they can afford. I thought the two child cap was a reasonable compromise. Removing it adds £3.5 billion to the welfare budget at a time when the government is supposedly trying to reduce it. But the most urgent need is to get many of the millions of economically inactive citizens into a job.

Steven Rose ● 1d

One wonders what Mr Brigo contributes in his cash in hand world  teaching women to stretch and strain.Or is every penny and every lesson  tlrecorded.3😉😉

Andy Pike ● 1d

‘The state pension may make up over half of the welfare budget but it should not be classed as a benefit. People contribute to their pension throughout their working lives through National Insurance deductions, not to mention the income tax they have paid.’💯and don’t get me started on the WASPI pension money that is owed to 3.6 million women!‘Benefits such as the child allowance are not contributory in that sense.Everyone agrees that there should be a safety net for those who are unable to support themselves.’Alternatively, don’t have (more) children than you can afford to financially support yourself!  However Muhammed, Muhamad, Mohammad, Mohammed, Mahammad, Mohamad, Mohamed etc etc will all be highly delighted!  They can all get themselves even more wives and start banging out even more kids; and of course they will be pocketing all that lovely welfare money for themselves.  What a fantastic earner kids are! ‘But a safety net is not the same as a benefits culture in which, as John Hawkes reveals in his post, five million working age people in this country are economically inactive with no obligation to look for a job and almost a million young people are neither in employment nor training nor education.’Parental failure, big time!  Why are the parents allowing this to happen?  Or is this shameful situation just perpetuating the family tradition?

Sue Hammond ● 1d

Mr Ixer.You are usually right.I must have misread the government web site -https://www.gov.uk/new-state-pension - 'Eligibility'though my arithmetic is I think correct.

John Hawkes ● 1d

There is an obvious difference between pensions given  to people who are too old to work  and benefits awarded to individuals who could work but choose not to do so.

Steven Rose ● 1d

Mr Hawkes: "Only a person born before 6 April 1951 if a man or 6 April 1953 if a woman, making them c.70 years old, will automatically be paid the basic State Pension and possibly the Additional State Pension."I don't understand; I think you'll find men born in 1951 were eligible to claim their state pension when they reached the age of 65. If born in April they'll be 74 years old.

Michael Ixer ● 1d

Mr Brigo'As you are the one complaining about the size of the welfare state perhaps you should 'play your part' and refuse to collect your pension?'Certainly not.I have paid for it during many years of paid employment through NI contributions and higher rate income tax paid even now on my non-state pension. And yourself ?I and many others including the Labour Party sensibles are more concerned with benefit payments to those, often young, who will not or claim are unable to work, often because of bogus mental health issues.https://www.bbc.com/news/articles/cx2pvxdn9v4o "'Life being stressful is not an illness' - GPs on mental health over-diagnosis"'Hundreds of GPs across England have told the BBC they think mental health problems are being over-diagnosed.One commonly-held view by family doctors, our research suggests, is that society tends to over-medicalise normal life stresses. But they're also concerned about how hard it is to get help for patients with mental health conditions.Earlier this week, the Health Secretary ordered an independent review into the reasons for a rising demand for mental health, ADHD and autism services in England, and where the gaps in support are.BBC News sent a questionnaire to more than 5,000 GPs in England asking about their experiences helping patients with mental health concerns. Their responses give an insight into how challenging this issue is for many family doctors.Of the 752 GPs who took part in our research, 442 said they believed that over-diagnosis is a concern. More said mental health problems were over-diagnosed by a little than over-diagnosed by a lot.Eighty-one GPs who responded felt that mental health problems were under-diagnosed'.Cheer up !😟😉

John Hawkes ● 1d

As you are the one complaining about the size of the welfare state perhaps you should 'play your part' and refuse to collect your pension?

Michael Brigo ● 1d

Mr Ainsworth"In the UK, pensions for the elderly consume the largest share of the welfare budget, making up roughly half of total welfare spending, with projections for 2025-26 showing about 55% of social security funds (£174.9 billion) going to pensioners, primarily for State Pensions and related benefits like Pension Credit and Winter Fuel Payments, a figure expected to grow with an aging population.'Is this not what one would expect ?What benefits, other than those for people seriously and medically certified as disabled, would be deemed an obvious entitlement for someone who is younger and therefore able to work and earn his/her own living and look after their own family ?Thus surely the elderly are more likely to qualify as they are less likely to be able to find or carry out paid employment.Only a person born before 6 April 1951 if a man or 6 April 1953 if a woman, making them c.70 years old, will automatically be paid the basic State Pension and possibly the Additional State Pension.Others will need to have 10 qualifying years of National Insurance payments on record to get any state pension.I assume only those born in the UK would qualify.When you reach this age I assume you will take steps to refuse to accept this payment.

John Hawkes ● 1d

The state pension may make up over half of the welfare budget but it should not be classed as a benefit. People contribute to their pension throughout their working lives through National Insurance deductions, not to mention the income tax they have paid. Benefits such as the child allowance are not contributory in that sense.Everyone agrees that there should be a safety net for those who are unable to support themselves. But a safety net is not the same as a benefits culture in which, as John Hawkes reveals in his post, five million working age people in this country are economically inactive with no obligation to look for a job and almost a million young people are neither in employment nor training nor education.

Steven Rose ● 2d

"I really do not believe that 50% of benefits is spent on pensions.  But yes, the UK has an ageing population.  I do not think that the "triple lock" is to blame by any stretch of the imagination."Google AI:-"In the UK, pensions for the elderly consume the largest share of the welfare budget, making up roughly half of total welfare spending, with projections for 2025-26 showing about 55% of social security funds (£174.9 billion) going to pensioners, primarily for State Pensions and related benefits like Pension Credit and Winter Fuel Payments, a figure expected to grow with an aging population.Key Figures & Breakdown (UK Focus):Overall Share: In 2024/25, pensioners received nearly half (48%) of the total UK welfare budget.By Benefit Type (2025-26 Forecast): Around 55% of the social security system's expenditure is projected to go to pensioners, amounting to £174.9 billion in Great Britain.Largest Component: The State Pension itself is the biggest single cost, followed by Pension Credit, Housing Benefit (for pensioners), and Winter Fuel Payments. Context:Dominant Spending: Pension spending is the largest single element within the UK's social protection spending, a trend likely to continue as the population ages.Welfare System: This includes benefits beyond just the State Pension, such as Pension Credit and Winter Fuel Payments, which are grouped under pensioner benefits. In essence, when looking at welfare spending, especially in the UK, a majority portion goes towards supporting older individuals through retirement benefits, with the State Pension being the core cost.""Dura lex, sed lex"

David Ainsworth ● 2d

I was 100% in favour of removing the 2 child cap.The only point i'm making is that there are people on this forum who are clearly 'of a certain age' who are outraged by the benefits bill - despite 50% of it going to support them. I do not include you in this group Ivonne.

Michael Brigo ● 2d

Hello Michael B,I am sorry to have to ask, but how old are you?  This question arises because normally people who are not affected are the first to point fingers and apportion blame.I really do not believe that 50% of benefits is spent on pensions.  But yes, the UK has an ageing population.  I do not think that the "triple lock" is to blame by any stretch of the imagination.  Tell me, were you against the removal of the two-child cap by any chance?

Ivonne Holliday ● 2d

Here we go, the usual suspect having a snide dig at pensioners again. 🥱From April 2026 the (full) state pension will rise by 4.8.% = £574.60 pa  Eat your heart out MB!🤣However not in the same league as the public sector salary increase for junior doctors, and let’s not forget their gold-plated pensions.  And the greedy b’stards still want more!🤬 It’s the public sector inflation-busting pay increases and the *great welfare giveaway to the feckless breeders, that are the biggest existential threat to the overall welfare budget in my opinion.  *not in a good wayOur State Pension is one of the lowest in Europe and I, like many other pensioners have been paying tax on our state pension from the start because it was bundled together with our private pensions, so we have been taxed twice over.  We have contributed more than a fair share to the Exchequer, unlike many of the aforementioned feckless breeders.

Sue Hammond ● 2d

Nearly 50% of benefits spent on pensions. Time to end the triple lock.The biggest portion of the benefits bill is spent on pensioners. In 2024/25, £150.7 billion was allocated to pensions and related support, including pensioner housing benefit, pension credit and winter fuel payments.This accounts for almost half (48 per cent) of the total welfare budget.By 2029/30, spending on pensioners is expected to climb to £181.8 billion, still just under half (49 per cent) of overall welfare expenditure.The increase is largely attributed to the UK’s growing elderly population and the impact of the "triple lock" policy, which ensures state pensions rise by the highest of average earnings growth, inflation, or 2.5 per cent annually

Michael Brigo ● 2d

Comment from the Spectator "Reality Check" by Michael Simmons 5/12/25"After the economic explosion that was last week’s Budget, the fallout has already begun. Richard Hughes, chairman of the Office for Budget Responsibility, resigned on Monday over the watchdog’s accidental release of its Budget report less than an hour before Rachel Reeves’s statement. However, he won’t be the only one left jobless following the Chancellor’s announcements." Labour is overseeing a transfer – started under the Tories – from work to welfare".That shift is both fiscal and human. The real outcome of the Budget is tax rises for workers, coupled with yet more debt for future generations to fund a benefits bonanza. Labour’s second Budget alone adds another £16 billion to that bill. Factor in pensions, and welfare spending is on course to hit £406 billion by 2030 – £109 billion of which will go on sickness payments. To pay for this, Reeves is euphemistically ‘asking’ workers for more, pushing taxes to a record high. The average person on £38,000 will now hand over £2,000 a year just to finance welfare.But this isn’t simply an economic disaster – it’s a human one. Some 6.5 million Britons are now on out-of-work benefits, with more than five million under no obligation to seek work. Payrolled jobs have fallen by about 180,000 in a year. And nearly one in eight 16- to 24-year-olds – almost a million young people – are now Neets: not in education, employment or training. Many of them will never leave this worklessness trap – unless Labour starts working harder'.An example is it not of the Labour Party's general attitude to social and economic policy ?

John Hawkes ● 2d

Yes, tell me about it, work your socks off and they take from you.

Barbara Stevens ● 4d

Thanks MichaelSo someone on full state oension who made provision for a small private pension pays tax on the two combined whereas another oerson whk made no private provision abd receives a full pension , pension credit abd possibly other benefits pays no tax at all.Not very fair really. No incentive to look adter your own destiny  knowing the state will top you up.

Andy Pike ● 4d

Thanks MichaelSo someone on full state oension who made provision for a small private pension pays tax on the two combined whereas another oerson whk made no private provision abd receives a full pension , pension credit abd possibly other benefits pays no tax at all.Not very fair really. No incentive to look adter your own destiny  knowing the state will top you up.

Andy Pike ● 4d

@AndyI asked the question to an AI bot and the reply is below, not sure if any use or not-----------In the UK, it depends on the type of benefit: some benefits are taxable and count towards your total taxable income, while others are completely tax‑free and do not get added on top of your wages for income tax purposes. You are always taxed on the total of your taxable income sources, not just your wages.Taxable vs tax‑free benefitsSome state benefits are specifically classed as taxable, for example things like the State Pension, contribution‑based Jobseeker’s Allowance and Carer’s Allowance. These are added to your earnings (wages, self‑employment, pensions, etc.) and the combined figure is what HMRC uses to work out if you are over your personal allowance and which tax band you fall into. In your £2,000‑a‑month example, if you were getting a taxable benefit on top, it would normally be added to that £2,000 to calculate tax.Other benefits are explicitly tax‑free, such as Housing Benefit, Income Support in many cases, Disability Living Allowance (DLA), Personal Independence Payment (PIP), Child Benefit (though high earners may face a separate charge), and similar support payments. These tax‑free benefits are not added to your wages when working out income tax, so you would only pay income tax based on your £2,000 salary (plus any other taxable income), subject to your personal allowance.Personal allowance still appliesEveryone who is UK‑resident and under the very high‑income taper usually has a personal allowance (currently £12,570 per tax year) on which they pay no income tax. That allowance covers taxable income only; it does not need to cover tax‑free benefits because those are ignored for income tax. So if your total taxable income (wages plus any taxable benefits) stays within the personal allowance, you will not pay income tax, regardless of how much additional tax‑free benefit income you receive.If you tell HMRC or your employer which benefits you receive, they adjust your tax code so that the right overall amount of tax is taken across both earnings and any taxable benefits. For a precise answer in your situation, the key is to check whether each specific benefit you claim is on the “taxable” or “tax‑free” list and then add only the taxable ones to your £2,000 when working out your tax.

Michael Brigo ● 4d

Good Luck with that one, I get tax taken from my private pension automatically, but then for the first time received a letter from HMRC wanting money from my savings interest. Didn't wait to  to speak to a person rang 4 times a 40 min wait to speak to a person. Sent a cheque.

Barbara Stevens ● 4d