It has been ages since I last posted a blog post. Since I told u that I had pre-ordered my iPhone 4; I have received it, played with it, brought a case, and been refunded for the case.
Ok, let me bring you up to speed. At least once a month at school we have the EMA (Education Maintenance Allowance) argument – Incase you don’t know here in the UK students who stay in education past the age of 16 and who’s parents earn below a certain threshold are entitled to a sum of money up to £30 pounds a week and the occasional bonus of £100 for doing such things like handing coursework in on-time and having 100% attendance for a term.
Here is the argument, I totally agree with the whole concept of EMA, yet the system needs a little rethinking. At the moment:
“Education Maintenance Allowance (EMA) is a tax free benefit and pays up to £30 a week directly into your bank account if you stay on in education at school or college after you have taken your GCSEs.”
However the government say that EMA is tax free, which it correct but my argument is that students who have any sort of paid employment their EMA should come out of their tax allowance.
The whole idea of EMA is so that students can purchase school equipment and items that are needed for study such as stationary, calculators and printer ink. Students who do not receive EMA and have paid employment and earn over the income tax threshold or NI limit have to pay some sort of contribution to the government whereas a student who receives EMA and the sum of their EMA and monthly income pushes them over the tax thresholds to not pay any sort of contribution.
Most students are on the tax code 647L, which means that they can earn just over £6,470 per year pre tax. However a student who receives £30 EMA every week and all the bonuses would receive approximately £1,670 per year. This gives these students to earn an approximate £8,140 per fiscal year without being taxed on income. An EMA receiving student should have their EMA earning potential deducted from their tax code in order to give a fairer earning system for students aged between 16-18, giving them the opportunity to earn £4,800 pre tax rather than the previous £8,140.
National insurance contributions are also unfair when students have a job and receive EMA. The National Insurance ‘earnings threshold’ is £110 pounds per week (£440 per 4 weeks) and you pay 11% on any earnings over that amount. Students who receive EMA and also have paid employment have exactly the same ‘earnings threshold’ as students who receive no EMA. In effect students who receive EMA have the potential to earn £120 per 4 weeks above the £410 earnings limit, effectively allowing their monthly non-NI contributed income to be £530, instead of the NI earnings threshold deducted from their 4 weekly EMA sum of money (£410-£120= £290).
Having done the sums and concluded that there was unfairness, I decided to email Downing Street and today I received a rather official looking letter in the post:

It Read:

So I await a further reply from HM Treasury and see if anything comes from my email.
Sources:
http://www.litrg.org.uk/help/students/statebenefits/edmaintallowance.cfm
Note:
EMA calculations based on 39 school weeks and 5x£100 bonuses; 2x January and July, and one in October of the second year out of two years study and a student who receives £30 per week for all of the school weeks.