Work & no eligibility for govt programs? Or no work & get it

amother

Mon, Mar 15 2021, 10:05 am

I know I know it's a can of worms but once and for all I need to hash it out.

Is it true that it simply doesn't make sense to work unless you earn _____________ [magical number] because you'd be better off on government programs

I'm NOT asking if it' sokay/ethical/correct on principal! I'm asking from a financial perspective long term. Can someone break it down - tell me the bare facts?

I'm pasting from two recent threads to show what I'm referring to:

Dh and I are careful to check the program eligibility limits and make sure that we don’t earn more than that. Food stamps and Medicaid really help the budget tremendously. If we earn too much then we need to pay hundreds of dollars for food and medical care every single month. We can’t afford that.
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I guess you never worked to support yourself. After paying for food, housing and medical we struggle just like you to pay for tuition and Bar Mitzvahs. I spent less than $100 for pesach clothing. Most of us are not getting anything new, some are getting new socks.
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Do the math. It's not hard. We pay average over 20k for medical a year. Add that to your income, plus all other benefits. You may be surprised by how much you are "earning".
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My daughter is in college. Her friends are paying a fraction of tuition, while we have to pay it in full. The financial office informed us that no one cares that we send our kids to yeshiva and pay tuition.
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People like me, NY middle class are the one suffering. No one gives us coupons for discounted food/clothing before yom tov. My inlaws look at us as 2 working adults and assume we are better off than others.

Our secret, we are heavily in debt. I don't see a way out.

Or maybe it’s expensive to work.
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I got a bonus that pushed us over the threshold. I had to pay 40% taxes. The amount I ended up getting was a joke for the work and time put in extra for it.
We too are questioning why put in effort. If I would be a SAHM my life would be so much simpler. We would lose health insurance but everyone around me seems fine on their govt health insurance. We pay 20k+ alone on health insurance. That itself is a huge chunk of my paycheck.
I don’t live in NY. But am also wondering why am I working.
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Can I be bothered when I work full time and my neighbor chooses not to work even tho she can’t afford it.
That isn’t an equal society.
Why should I work if I can also get reduced tuition. Free food. Free rent. Freeze healthcare. Free utilities. Free cellphone.
I’ve been asking myself this a lot lately.

watergirl

Mon, Mar 15 2021, 10:16 am

This is a great question and you really need to speak to someone like a mesila advisor.

You need to look at where you are living (the city) to determine if you can relocate to a less expensive location. People on this site live in places like Lakewood and Monsey where property tax is through the roof, and people here live in other cities where is is far less (I pay less than 4k in property taxes). This is just one example. Rentals; before we bought our house, we rented a house for $1300/month, and in other popular cities, that will get you a broom closet... so location is in the calculation.

Schools are also in the calculation. Are you paying 3k/year/child, or 20k/year/child?

And spending habits; do you buy meat for shabbos every week and two kind of fish for every shabbos? Do your kids "need" the latest clothing from heimish only stores and leather shoes? Do you spend hundreds on matza (without asking your rav if you should be spending it, considering you cant afford it?)?

Do you feel you need an annual vacation and cleaning help?

Do you have little kids at home who are not in school yet? Would you be paying a babysitter more than you are earning?

Do you have the skills to move up in a job? Or the desire to obtain them?

My husband and I started off a few years ago in a new city and needed assistance to get up and onto our feet when we left our old job. Long story. We took the help because that's what it was there for. BH a few years later, we slowly made more and more and now do not qualify for anything. The years in-between were hard and we still have very little to spare and nothing to put away. IYH our income will continue to grow. That's how the government programs are meant to work. It was always supposed to be a bridge or stop-gap and not the default way of life that it has become.

All of this is important in deciding your financial situation. Mesila is very helpful.

Last edited by watergirl on Mon, Mar 15 2021, 10:18 am; edited 1 time in total

amother

Mon, Mar 15 2021, 10:20 am

watergirl I appreciate the lengthy informative response

My question to you is:
What are the long term benefits [besides for feeling good that you don't live on handouts]
to 'paving your own way' when the interim is :

paved with risk [if you do your own business: will it survive - if you work for s/o else - will their business survive? will you get a raise? will your skills improve all that much to justify an even higher salary?]
plus
real daily hardship to cover the day to day 'until you make it'?

amother after watergirl I'm not sure if you're being sarcastic or not.
Excuse my ignorance/lack of financial education-what's the 401K?

amother

Oak

Mon, Mar 15 2021, 10:21 am

amother [ OP ] wrote:

Dh and I are careful to check the program eligibility limits and make sure that we don’t earn more than that. Food stamps and Medicaid really help the budget tremendously. If we earn too much then we need to pay hundreds of dollars for food and medical care every single month. We can’t afford that.

This is my comment. The part I didn’t include is that I have a disability that really limits how much I can work. I also need dh to have some availability to help with the kids and housework. So for us the only way to make things work is to rely on programs. Which means dh needs to keep his earnings below the limit.

It’s a lot more complicated than just, stay home because it doesn’t pay to work. Or maybe it isnt. Just depends what you’re looking for I guess. Personally I was brought up to pay my own way and it hurts that I can’t do that. But I truly can’t manage another way.

HonesttoGod

Mon, Mar 15 2021, 10:22 am

It really depends on where you live, but yes there is a "black hole" in America where those who earn more than x amount have to pay everything and are left with $0 or even less than that, and those that earn way less on the books get all the services and end up with much more at the end of each month.

It is a reality. Especially with the health care system in this country.

I was working and paying an extraordinary amount of medical fees which left us with close to $0 at the end of each month. I quit my job to go to school for a couple years and during those years I was getting health plus (which is medicaid with a very very low fee) and ended up with the same (if not more some months) at the end of each month as we had when I was working.

So yes, basically unless you are going to earn enough past the line to cover the expenses (such as $1000 a month + for health insurance), then sometimes it is worth it to stick to lower paying jobs just to keep medicaid.

I know some businesses that will offer to pay bills instead of giving a raise because this works out beneficial for the employee and the business.

amother

Oak

Mon, Mar 15 2021, 10:25 am

amother [ OP ] wrote:

That poster is asking what you will live on iyh after retirement. And what you’ll do when there are no more kids in the home to care for. Just more things to keep in mind while making your decision.
I would suggest that you make a very detailed budget. Consider what the income limits are for the programs. Consider expenses you won’t have if you’re on the programs. Write down what you’ll need to pay for either way. Figure it out from there.

watergirl

Mon, Mar 15 2021, 10:26 am

amother [ OP ] wrote:

What are the long term benefits? I have a 401(k). I have been paying taxes since I was 16, so I have been paying into my own retirement benefits, disability, unemployment, etc. I do not own a business and I am not someone to take that kind of risk, so I cant speak to that. I need the security of an annual COL raise, health insurance through work, a stable work environment, etc.

To be honest, when we were in that really hard in-between few years, we did get help from our local tzedakka org to make shabbos. Then it went to just help for sukkos and pesach. BH that time is over, although we are on their pesach list and do get a small check BH. We are not in the clear yet! But almost IYH. That hardship is uncomfortable. We JUST started with a cleaning lady for 2 hours a week a few months ago. We have literally never been on a family vacation and DH and I have never had a night just the two of us since our wedding... it is not easy, but we do not have the money for it.

Again, reach out to mesila for help with your own expenses and income. They will help you.

amother

Fuchsia

Mon, Mar 15 2021, 10:31 am

amother [ OP ] wrote:

Why do you think that everyone has risks and daily hardship till they make it? Is that the default for people around you?
Many people around me do well with their salaries and although they don't "make more" than those on gov assistance do, they have the potential to earn more as time goes by. They also have potential to make investments, have good credit, can buy a house, etc. People who are on government programs generally don't have the monthly income and credit to prove they can swing a mortgage.
And if you are having daily struggles, you can qualify for aid as a bandaid until you can give it up.

amother

Wheat

Mon, Mar 15 2021, 10:54 am

We are going without health insurance because it would cause us to go in debt (my kids have child health plus and I have when I am pregnant). My husband changed jobs to get a lot of our income as 1099 as it went up bh and put it in a corporation so we can deduct expenses, get cheap insurance and hopefully not go to the 40% tax bracket. Honestly you really need to evaluate because I made a cheshbon that last year we earned $500 more than someone low income and that money didn't even cover the car to get to work everyday! (we live in the city so can live without a car) So we would be better with a closer to home low paying part time job! I know pride is a big thing but you are not saving the country with the tax you pay so do what you need to do to make things work for you.

amother

Fuchsia

Mon, Mar 15 2021, 10:56 am

amother [ OP ] wrote:

Fuschia I'm asking because I come from poverty and so does my husband
I'm not exposed to people who are stable or even well off financially
I'm trying to learn
It feels embarrassing to ask these questions in real life
daily hardships I meant - when there is more month left at the end of the
money and no FS or housing assistance to bail you out - what happens at that point?

I'm sorry. DH and I come from families where we lost opportunities so as not to give up social aid. Its freeing for us to get out of that rut and have a lot more potential, even if I'm not yet in a place where my annual income is more than I'd make with a p/t job + social aid.
Here's what worked for us, but I do realize that there are millions of details that can make or break this so I don't know how helpful it is, but at least you'll get perspective.
Example: My annual tuition is what others on this site pay for 2 months. I don't know how I'd manage those numbers, but my numbers work for me.
We started marriage dependant on aid. We live/d very frugally and put away a bit of money each month. THIS IS COMPLETELY LEGAL.
We continued living frugally while increasing value at the company, so earnings continued going up.
When we hit the point where we were no longer eligible for social aid we were completely ready for it, because this is what we had been working towards all this time.
We continue living frugally, but well within our means. We put money towards investments, retirements, and savings account regularly.
It is important to me that my family is on par with our peers materialistically, but we do live in a very low maintenance community, so its not hard to keep up with the Jones.
Hope this helps.