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Universal Credit

(25 Posts)
tadpole73 Sat 08-Apr-17 01:17:32

I don't know much about this.
Maybe splitting with hubby, so if I bought a smaller house outright, would I not be allowed the claim UC?
Also, when you get child maintenance from your ex, does UC reduce and if you rent out a room in your house?
I ran a quote on the Tax Credit Calculator which stated I'd get £534 each month (to include child allowance and working tax/child element of tax credits), but UC states I will only get £89 child allowance whether mortgaged or not.
I can't believe UC would be £445 less a month?
Any ideas?

DoloresTheRunawayTrain Sat 08-Apr-17 02:05:51

So far as I am aware this difference would be down to the fact that you would only be entitled to child allowance and not universal credit because you would own your own home and are therefore ineligible at present for Universal Credit and therefore should claim Tax Credits. I have found some calculators do not make this clear enough.

DoloresTheRunawayTrain Sat 08-Apr-17 02:09:50

Sorry to clarify Universal Credit has not been fully rolled out for all sectors and circumstances yet so certain groups of people who would qualify find themselves ineligible as they haven't been set up on the UC databases yet. So homeowners and those with disabilities along with those who have no bank accounts of their own and a few others cannot claim UC and should go via the TC route.

tadpole73 Sat 08-Apr-17 08:50:02

Thanks DoloresTheRunawayTrain. That's a relief as I went on a UC calculator last night, and it said I would only get child allowance, so instantly thought they had scrapped any benefits for homeowners. Hadn't realised it wasn't doing calculations for those owning their homes (either owned outright or mortgaged). I also had assumed if you owned your home outright you were no longer entitled to the equivalent of Working Tax & Child Tax Credits whatsoever under the new UC regime.

PencilsInSpace Sat 08-Apr-17 09:06:04

You can put your postcode in here to find out if UC is fully rolled out in your area.

If you're in a full digital service area you can claim UC. If not, you'll probably be told to claim old benefits instead.

Homeowners can claim UC in full service areas but there is no help for mortgage costs for weeks and weeks, and then it's a set amount towards interest which may not relate at all to actual interest paid. If you own your home outright this won't affect you, obviously.

Child maintenance is not included as income, either under UC or the older means tested benefits.

If you rent a room out you need to declare the rent as income, both to UC and HMRC. It will affect the amount you get.

Whether you are working, how many hours, pay, how many children & age of youngest all affect how much you would get and whether you'd have to look for work.

PencilsInSpace Sat 08-Apr-17 09:11:31

Also savings are taken into account for UC but not for tax credits. If you have savings / assets over £6000 you'll be better off on tax credits if you can still claim them in your area. If you have over £16,000 savings/assets you will not be eligible for UC at all.

PencilsInSpace Sat 08-Apr-17 09:13:27

Should clarify - a home you live in is not counted as an asset. A second home or buy to let is.

PencilsInSpace Sat 08-Apr-17 09:22:45

£89 child allowance - that sounds like child benefit for 1 child?

You can claim CB whatever your circumstances if you earn less than £50,000. It can sometimes be worthwhile to still claim if your income is above that and then pay it back through tax as it helps you get NI contributions.

CB is not counted as income in the UC calculation (or for other benefits).

tadpole73 Sat 08-Apr-17 09:32:46

From what I'm reading, under the old tax credit system I could rent a room out and it wouldn't affect how much I get plus, I could own my house outright and that won't affect what I get YET, under UC both those will reduce what I get. So, basically, on UC it's not worth owning your house outright as you will be a lot less off than on the old Tax Credit System.
Is UC therefore providing a lot less benefits?
Yes, the £88 I stated relates to child benefit

tadpole73 Sat 08-Apr-17 09:34:00

Also, it looks like child maintenance from your ex is taken into account under UC. How's this all fair?

PencilsInSpace Sat 08-Apr-17 09:57:29

Where are you reading this?

UC replaces both tax credits and housing benefit (among other benefits).

If you own your home:

- under the old system you would not be eligible for housing benefit but you would, depending on income, be eligible for tax credits.

- under UC, you would not have any eligible housing costs but you would, depending on income and savings, be eligible for the child element.

Under either system, if you rent out a room then that is income and you must declare it.

Under either system child maintenance is not counted.

UC is making lots of people worse off, primarily those with disabilities who lose the additional premiums that they got to other benefits if they are on PIP. People with large amounts of savings are worse off too.

So, basically, on UC it's not worth owning your house outright
If you own your own house outright you own a giant great asset and have no housing costs. In what world is that 'not worth it'? confused

OddBoots Sat 08-Apr-17 10:04:03

When you own your own home you have all the security that comes with it including knowing that you are not going to suddenly have a lot more rent to find when you get back on your feet or your children grow up and you no longer claim benefits (and beyond when you are retired). It's always going to be worthwhile longer term.

tadpole73 Sat 08-Apr-17 10:08:06

Hi PencilsInSpace

Thanks for clarification. I had assumed from the very vague info online about UC, that if you owned your house outright you no longer got the equivalent to the child element of tax credits and working tax. I had assumed the government were thinking "right, they own their house outright so gave no mtge/rent to pay so can use that to pick up the loss of UC's version of CTC/WTC.
I appreciate, owning a house outright is exceedingly fortunate, but with the costs of childcare, Rhodes benefits help hugely when a single mum.

Also, yes you do need to declare if renting a room out once over the amount you need to start paying tax on in order to complete a Tax Return, but the Tax Credit System does not reduce because you are getting this additional income. It doesn't affect the amount of benefit you receive. I'm guessing with UC it does?

Sorry for the questions, but I've never claimed anything ever before and it's all a bit wholly to me currently. I'm anticipating leaving my hubby, so trying to ascertain how I'd survive financially and whether I'd be better off having a small house with no mtge or staying in marital home with a large mtge - if I could survive on my part time income and rent a room out. Whether I'd get penalised under the UC System.
But from what I've read this morning, homeowners (mortgaged or not) cannot apply for UC anyway at the moment

PencilsInSpace Sat 08-Apr-17 10:18:21

Ah right, looks like you're talking about the rent a room scheme.

Looks like the same limits apply to TC and UC - you can earn up to £7500 from renting a room without it affecting your benefit. My mistake.

PencilsInSpace Sat 08-Apr-17 10:25:41

Depends what area you are in. Have you checked your postcode?

If you are in a digital full service area you can apply even as a homeowner and you will have to claim UC rather than old benefits.

This might influence your decision on where to buy a house wink

Babyroobs Sat 08-Apr-17 11:01:56

Can't believe people owning their own home with no housing costs to pay and all the security that it brings are moaning about getting less in benefits !!
My friend came out of her divorce with a 3 bed semi completely paid for which will be hers for life, she will never need to pay rent or mortgage again. On top of this she gets her part time wages, tax credits and child benefit for 3 kids which amounts to a lot of money and the kids only live with her half the week !!

Babyroobs Sat 08-Apr-17 11:06:26

Op, presumably you would still get help with childcare costs under UC.

PencilsInSpace Sat 08-Apr-17 11:14:02

Yes you get up to 85% of eligible childcare costs.

There are a series of guides here which might shed a bit of light.

Your best bet though is to go to CAB or another advice org and talk through all your circumstances. The rules are complicated and different depending on where you live.

tadpole73 Sat 08-Apr-17 13:29:40

Babyroots, I understand how it looks but, since the age of 16 yrs I have work full time and done a part time job on top to get a deposit together for a house. I have never been on a girls holiday, been to a concert etc - normal socialising in order to be able to get on the housing market. I worked hard for 18 years like this before having my child. Got with a bloke who had nothing as he'd had the lads holidays/socialised all thro his 20s, yet now we are divorcing he walks away with a lot of the overall equity. I put my career on hold to bring up our child with him focussing on his - thus he earns a v good salary. But I will now potentially end up with an even smaller house that what I started with 20 yrs ago albeit mortgage free, but with £50 per day childcare costs, I'm dependent upon tax credits helping me out. It seems like I've worked v hard for 20 yrs to have given him a lot of the equity and end up in same situation now as I would have been having stayed on my own all that time ago - as my house wld be mtge free now anyway.
Remember, with a private home you are responsible for all maintenance costs too.
So my part time salary is taken up with a lot of my childcare costs and normal household bills, hence why homeowners still need help. After all, it's not like I've lived on benefits all my life, I have tried and paid into the system from age 16 and still paying in.

Babyroobs Sat 08-Apr-17 13:38:50

I think you will still get help with childcare costs op, especially if you are a lone parent, but not having a mortgage to pay ( ever, even when the kids have left home ! ) is a huge bonus.

PencilsInSpace Sat 08-Apr-17 13:46:07

Well yeah, having a mortgage free house is a huge bonus but you can't eat it grin It won't pay for fuel, clothes, childcare, bus fares ...

If your friend had not come out of the divorce with a house and had had to rent somewhere she'd have got HB as well.

Babyroobs Sat 08-Apr-17 13:49:25

You will have wages, child benefit, child tax credits or UC and maintainence and no housing costs !
You will get help with childcare costs.

Babyroobs Sat 08-Apr-17 13:50:08

Sorry Pencils - meant to say op will get the above.

Babyroobs Sat 08-Apr-17 13:50:41

And if my friend had got HB it would not have been the full amount as she works.

tadpole73 Sat 08-Apr-17 13:51:29

Babyroobs Oh yes, I totally appreciate, I'm
in a better position to a lot of people, I just panicked if, going on UC suddenly stopped any help. Reassuring, thanks

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