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Boris Johnson urged to let Greggs workers keep bonus

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Media caption,

Jeremy Corbyn offers to buy the PM a Greggs vegan roll if he can show universal credit effect on bonuses are 鈥渏ust and fair"

Boris Johnson has dismissed calls to reform tax and benefit rules after claims some Greggs staff can only keep a quarter of their annual bonus.

The bakery chain has awarded 25,000 staff members a 拢300 bonus after a "phenomenal" year.

But Labour leader Jeremy Corbyn said some workers on universal credit will only be able to keep 拢75 of it.

The prime minister said Greggs was producing record figures, and only one person had complained about the bonus.

Universal credit, which rolls six benefit payments into one, is meant to ensure no one is better off claiming benefits than working.

Benefit payments are reduced as earnings increase - but the roll-out has been beset by delays and problems, and Labour is calling for it to be scrapped.

Speaking at Prime Minister's Questions, Mr Corbyn asked Mr Johnson if it was "just and fair" that workers earning just over 拢12,500 year were not allowed to keep their bonuses.

"If the prime minister can answer that question... I'll buy him a vegan roll from Greggs myself," he added.

Rather than making work pay, he told the PM, "it's clear the government is punishing not supporting people".

'Employment growth'

He said Mr Johnson had "fought with unbelievable levels of energy to protect the bankers' bonus, why can't he do something about the low paid?"

The PM replied: "Greggs is producing record figures - 拢7m extra. One person I believe has complained about the bonus system."

He hailed "unparalleled growth in employment" under the Conservatives and said "people on low pay will be able to keep more of the money they earn" through a higher living wage and national insurance changes.

Image source, PA Media

Benefits experts told The Guardian, , that some Greggs staff on universal credit will keep as little as 拢75 after tax and national insurance are paid, and bonus payments are clawed back at a rate of 63p in the pound.

Ronnie Draper, the general secretary of the Bakers, Food and Allied Workers union, which represents thousands of Greggs staff, told The Guardian it had only been contacted by one member of staff worried about losing out on the bonus.

He added that the union would discuss alternative ways the payment could be made if workers were losing out, adding that Greggs was a "decent company" that paid higher wages than most on the High Street.

It is not known how many Greggs staff members are on universal credit.

How might a Greggs worker's bonus be cut to 拢75?

To work out how a Greggs 拢300 bonus could be cut to 拢75, consider somebody earning enough to pay income tax (more than 拢12,500 a year).

On the 拢300 bonus they would pay 拢60 income tax and 拢36 of national insurance, so 拢204 would go in their bank account.

If they were receiving universal credit, that would be reduced in line with the taper rate, which means they lose 63p in benefits for each 拢1 they earn. So they would lose 拢128.52 of their benefits.

That means that the 拢300 bonus would only have left them 拢75.48 better off.

We spoke to the Department for Work and Pensions about these figures. They told us there were Greggs employees who would be in that situation, but not all of them.

Others may already be earning enough to have stopped receiving universal credit or they may be earning little enough to have leftover work allowances (that's the amount you're allowed to earn before you start losing benefits).