(LONDON) Universal Credit FACT CHECKED Reality Report: Before the chancellor cut the taper rate, a universal credit claimant earning £9,000 a year from a part-time job would be taking home 37p of an extra £1 earned #AceNewsDesk report

#AceNewsReport – Nov.25: About 40% of claimants are working. And the taper rate, as it is known, has been cut from 63p to 55p – for each £1 earned: But this can still leave claimants effectively paying very high rates of tax.

#AceDailyNews BBC FACT CHECKED News Report: The universal credit claimants effectively paying top tax rates and the government has cut the amount of benefits universal credit claimants lose if they earn money.

By Anthony Reuben
BBC Reality Check

Woman with bill

In fact, they can end up taking home a smaller proportion of an extra £1 earned than someone earning £150,000 a year.

Here, are five examples of workers paying very high effective tax rates. 

Now, that rises to 45p – but that is still the equivalent of a pretty high tax rate.

Now consider an employee, for example a parent, earning enough to pay income tax – so at least £12,570 a year – but still entitled to universal credit.

Even with the lower taper rate, they are still taking home only 31p of an extra £1 earned.

The taper rate is applied after income tax and National Insurance have been paid, which is why, in this example, it is taking 37p of an extra £1 earned and not 55p.

Income tax rates and bands are slightly different in Scotland. There is a 19% starter rate for income tax between earnings of £12,570 and £14,667. But in this case, that would still leave our worker taking home 31p of an extra £1 earned.

Child benefit is paid to families to help with the costs of raising children. 

It is £21.15 a week for the first child and £14 a week for each additional child.

But the benefit is withdrawn gradually for those earning between £50,000 and £60,000.

Consider someone with three children, earning £50,500 a year. 

The loss of child benefit means for an extra £1 earned, they take home 32p.

The higher rate of income tax in Scotland is 41%, so our worker with three children, earning £50,500, would keep 31p of an extra £1 earned.

In Scotland, people start paying the 41% higher rate of income tax when they are earning £43,663 a year.

In the rest of the UK, they start paying a 40% higher rate at £50,271 a year. 

But National Insurance rates are the same throughout the UK, which means a worker in Scotland earning between £43,663 and £50,271 would be paying both the higher rate of income tax and the 12% higher rate of National Insurance at the same time, meaning they take home only 47p of an extra £1 earned.

In the rest of the UK, employees earning that much would be paying only 20% income tax, so would take home 68p of an extra £1 earned – 21p more than their Scottish counterparts.

People do not have to start paying income tax until they are earning more than £12,570 a year.

This is called the personal allowance.

But the personal allowance is withdrawn at a rate of £1 of allowance for every extra £2 earned above £100,000.

So those earning more than £100,000 a year start paying tax on part of their earnings they did not previously have to pay tax on.

And this means someone earning between £100,000 and £125,140 a year would take home 38p of an extra £1 earned. In Scotland, it would be 37p.

All of these people are taking home less of an extra £1 earned than somebody earning more than £150,000 and paying what is supposedly the top rate of tax.

That person would take home 53p of an extra £1 earned.

Bear in mind all of these figures are the current rates – National Insurance rates will be rising in April.

We asked the Treasury why some workers pay much higher rates of tax than people earning considerably more but have not received a reply. 

Cliff edges 

In all the examples above, somebody earning an extra £1 still gets to keep some of this extra money – but there are situations in which earning an extra £1 could actually make someone worse off overall. These are known as cliff edges.

For example, if you earn less than £50,270 and your husband, wife or civil partner earns less than £12,570, they can use marriage allowance to transfer £1,260 of their income tax personal allowance to you.

That would mean you no longer needed to pay income tax on £1,260 of your earnings, saving you £252 a year.

But if you earned an extra £1, putting you on £50,271, you would no longer be eligible for marriage allowance, leaving you almost £252 a year worse off.

In Scotland, the cliff edge would be at £43,662 a year.

Cliff edges also occur with other schemes, including the personal savings allowance and tax-free childcare.

The comparable tax rate for somebody outside Scotland earning £44,000 a year was corrected. 

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here: https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

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(LONDON) Social Care Reform Plans FACT CHECKED Report: To reform the way people pay for social care in England have been voted on by MPs with many concerns over the poorest pensioners #AceNewsDesk report

#AceNewsReport – Nov.24: The government’s proposals were approved but it faced significant opposition from other political parties and some of its own MPs – with concerns that not enough is being done to protect the poorest pensioners.

#AceDailyNews says here are some about social care reform FACT – CHECKED By Reality Check team BBC News

Boris Johnson during a visit to Tharsus headquarters in Blyth, Northumberland

The reforms include a cap – or limit – on the amount people will have to pay towards their personal care.

It will be set at £86,000. After this has been reached, the local authority will pay for the care. 

This does not include living costs such as food, energy bills or accommodation.

There have been claims about how much these changes will benefit people – we’ve been looking at some of them.

Boris Johnson: ‘If you’ve got £100,000 or less, we’ll help you and that doesn’t include your housing asset – your home. There’s a housing disregard for as long as you and your spouse are in it’

As well as the cap, people will be eligible for some financial help from their local council towards the cost of care.

This is means-tested and will be available to people who need social care and have less than £100,000 in assets.

If someone has less than £20,000 in assets, then they won’t have to spend any of those assets on their personal care. 

The question being discussed by the prime minister is when your home counts towards your assets.

He’s right in his explanation. If you are receiving social care at home or if you are in a care home and your spouse is living in your home, the value of the home is not counted towards your assets. That’s called the housing disregard.

If you go into a care home and you do not have a spouse living in your home, then the value of your home is counted towards your assets and you may have to sell it, although there are schemes that allow you to defer the costs, and for the property to be sold after you die.

This is controversial because it is at odds with what the Conservative Party’s 2019 manifesto said.

It promised that: “nobody needing care should be forced to sell their home to pay for it”.

But, as we’ve pointed out before, the government’s language around this has shifted since the manifesto pledge.

The Health Secretary Sajid Javid has said “no-one will have to sell their house in their lifetime”.

And Business Minister Paul Scully told Sky News today: “There will be fewer people selling their houses and hopefully none.”

Jonathan Ashworth: ‘If you are unfortunate enough to need social care and you live in an £80,000 house in say Barrow or Hartlepool or Mansfield, you’ll lose nearly everything’

The first thing to say about this claim from Labour’s shadow health secretary is that this would only be the case if somebody was receiving social care in a care home – not if they were getting care in their own home.

If they were receiving care at home or had a spouse living at home, then the home would not count towards their assets – under the housing disregard.

If this wasn’t the case, the rules mean that you would have to contribute from your savings and other assets towards your social care until you got down to having assets worth £20,000. This could include having to agree to sell your home in future.

So in Mr Ashworth’s example, if the £80,000 house was your only asset, you could lose three-quarters of your assets.

And remember, these figures cover personal care and not other costs such as accommodation and food. People may be eligible for means-tested benefits to help with those costs. 

This piece was updated on 23 November to clarify the means-testing for social care support.

#AceNewsDesk report …………Published: Nov.24: 2021:

Editor says …Sterling Publishing & Media Service Agency is not responsible for the content of external site or from any reports, posts or links, and can also be found here on Telegram: https://t.me/acenewsdaily all of our posts fromTwitter can be found here: https://acetwitternews.wordpress.com/ and all wordpress and live posts and links here: https://acenewsroom.wordpress.com/and thanks for following as always appreciate every like, reblog or retweet and free help and guidance tips on your PC software or need help & guidance from our experts AcePCHelp.WordPress.Com

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