We published an article by James Ferguson a few weeks ago pointing out that it is entirely possible for a family on tax credits to work very few hours a week but still take home an income similar to that of a junior barrister or doctor. Several readers have taken issue with this. The tax credit and benefit system is ridiculously complicated (the easiest way to check all benefit entitlements is to use this website) so rather than bicker back and forth on it we are looking at some worked examples. Here's the first a family with three children living near Devizes in Wiltshire. One parent works 24 hours a week at £7 an hour (the magic number when it comes to tax credits). The other does not work. The family's total earned income comes to £8,700(take-home pay is £8,623 after NI). Their tax credits come to £11,930.10. Their council tax assistance is £685.33 and their Housing Benefit comes to another £6,950. On top of that they get child benefit of £2,501.20. That gives a taxpayer-funded benefits total of £22,067.63 (£424.31 a week).

Add that to the earned income and you get£30,690.53. That money is tax free. If it were earned inthefree market by someone not in receipt of benefits it would equate to a pre-tax income of just over£40,500. Junior doctor levels? Yup. Here are several other examples (thanks to our web researcher, Marina Gerner). A family, again with one parent working for 24 hours a week on £7 an hour, and the other parent not working at all, would earn the following: With no kids: Pay is £8,700(take-home pay is £8,623 after NI). Council tax help £492.19. Housing benefit £6,706.26. Total benefits (£7,198.45 per year/ £138.38 a week) plus actual earned money comes to a net£15,821.45.If it were earned by asingleearner,non-benefit recipient, this would equate to a pre-tax income of about£18,750. With two kids: Pay is £8,700 (take-home pay is £8,623 after NI). Total tax credits £9,114.06. Council tax help £432.91. Housing benefit £6,472.35. Child benefit £1,788.80. So total benefits (£17,813.12 per year/ £342.52 a week) plus actual earned money comes to a net £26,436.12. If earned by a single earner, non-benefit recipient, this would equate to a pre-tax income of about £34,500. With five kids: Pay is £8,700(take-home pay is £8,623 after NI). Total tax credits £17,458.86. Council tax help £753.38 Housing benefit £7,831.89. Child benefit £3,926.00. So total benefits (£29,970.13 per year/ £576.27 a week) plus actual earned money comes to a net £38,593.13. If it were earned by asingleearner, non-benefit recipient it would equate to a pre-tax income of about£54,000.