Once you start working, you’re worse off until you earn a LOT

[AmieWhineHouse]

This post isn’t to bash anyone that knows it’s not in their best circumstances to work. I’m aware the vulnerable in society really need help and protections and I’m not against that nor do I begrudge that at all.

I am setting up my own business to begin next year - I am disabled.
My complaints are as follows:

1. I will be charged 55 pence for every £1 over my work allowance - which feels really unfair, it feels like a penalty for working.

2. If I close my claim for Universal Credit to avoid this charge it puts me in a vulnerable position

3. On top of that, my self-employed income would be unpredictable.

4. If I stayed on universal credit I’d keep my rent covered and my free entitlement to things like the dentist and glasses.

5. once deductions have come off including taxes and accounting for services I would no longer be eligible for for free I’d actually be worse off than staying on benefits

Sorry if this is confusing, I have tried to make it as clear as possible. Ultimately, It seems I’d be better off on benefits and working is a risk.

It seems that being able to do some form of work despite disabilities is a bit of a gray area and penalised?

If I were to do some extra hours this month and earn £100 take home extra to usual (to keep the maths simple) I'd keep that money but having already used my work allowance against my usual pay my existing UC award would be reduced by £55 making me effectively £45 better off. By the time things like childcare (even at 15%) and travel have been paid you are absolutely peanuts better off in this scenario.

I get that UC can be confusing, but I want to clarify that you’re never worse off for working on Universal Credit. That’s quite literally the point of it.

UC doesn’t take anything out of your wages. You keep all the money you earn. What happens is your UC payment goes down a bit as your earnings go up.

With the £411 work allowance, only the amount you earn above that affects your UC. UC reduces by 55p for every £1 over the allowance.

Here’s a really basic example:
If you earn £600 in a month:
£600 minus the £411 work allowance leaves £189.

55% of £189 is about £104. So your UC for that month would go down by roughly £104.

If you normally get £1,000 UC, that’d mean you’d get £896 that month after the earnings taker is applied, and you keep the full £600 wages.

That means your total income would be £1,496, which is clearly more than £1,000.
So working always leaves you better off overall.

I know you’ve mentioned about dentist and prescriptions but, seriously, those things don’t cost what you’re insinuating they do. Not to the point that you might as well just not work when very clearly you can if you’re planning to.

If you can work, you should.

All the best x

@AmieWhineHouse well if you had to do some sort of volunteering for arguments sake & you were asked to do say 5 hours a week helping in the local school, hospital, charity shop etc & you got £1200/month it would be a generous hourly rate. So to get that amount for doing nothing is pretty good for you & others getting it. It would take me over two weeks of full on work to earn that amount (by the time tax and national insurance have been deducted). Meanwhile you just potter about. Why don’t you work?

FFS, why is it assumed that someone who is too ill to work is sat at home doing fuck all?
They are managing an illness/disability. For some, that could be intensive therapy, treatments, lots of appointments etc. Even being in hospital. They are dealing with fatigue, burnout, chronic pain.

You’re not wrong thats my life
An appointment or other every other day. I actually have a carer of some sort. I’m on pain relief, have limits and I can’t have a traditional job.
I did try to be understanding in my original post. I will think of a way to explain why I feel I will be worse off working that has nothing to do with my health and is to do with the finances and then maybe someone can help me to understand IF I am wrong

You are not worse off working, if you don’t make money past your work allowance you loose nothing but gain a small amount a month in earnings, if you do earn over the work allowance benefits go down but you are still better off by 45p to every pound. Throwing in the health issues when people aren’t agreeing with you doesn’t make you sound more correct.

Someone said something about how I’m doing nothing but pottering around on benefits

It is typical MN. Mention you are on benefits and the pitchforks come out.
Lots of disabled people go self employed as they can work within their limitations without some arsehole boss berating them and firing them.
You just do what is best for you.

Yes but do you want to stay on benefits living a life with that opinion of yourself? You get self worth from working and achieving it’s about so much more than the financials.. at the start of anything new it’s always scary but the sky’s the limit, what if you do amazingly well?

And this is why our economy is fucked!! Are you not embarrassed to be taking taxpayers money you don’t need rather than working for it yourself?!

Loads of us pay 55% + of earnings in tax!

I think you should be embarrassed for this comment.
OP is on UC for people who have limited capability to work. She is trying to better herself and earn some money by starting a business. That is allowed! She is simply asking how it would affect her benefits and is worried by how much.

Go find a hay bale to shove your pitchfork in.

To be honest I don’t actually like claiming benefits but I’m not sure why you think I have something to be ashamed of that’s not very nice of you?
The usual kind of employment isn’t suitable for my needs I’d be off almost constantly.
I only fairly recently considered self employment and if you’re wondering why I didn’t before - I didn’t have the confidence to get started, I’ve been very busy for non-leisure related reasons (believe it or not you can be very busy and not be working) and didn’t think it was possible for me and there are a lot of reasons for that.

I’ll be self employed from home in a way which works for my needs and only recently had a bit of headspace to begin.
I don’t even know if it will work out. Thanks to everyone that wished me luck

Having 55p deducted from your benefits per pound is still an extra 45p on every £1 earned over the few hundred pound you can earn without any reduction at all to benefits. I'm not seeing how you will be worse off.

I’ve thought about the replies and yes I must have been wrong and am not worse off

Not worse off …so what’s the problem?

Salary Calc says overall tax rate across the entire salary of 34% for a single person someone on 110k & 36% if on 120k.
Inc loss of TH and CB.

And if i put in 99k with CC vouchers and 150k without vouchers, the p.a take home pay (without any pension deductions) is 67k and 91k respectively.

You re also arguing that its unfair that very wealthy people stop getting benefits, there will always be a cut-off & at 100k its very generous.

People earning almost 3x the average wage or near 5x the NMW, should not be claiming anything at all.

Weird how someone on very low benefits, trying to get herself off them, is criticised.... by people pissed off they cannot them on very high salaries.

I just pointed out that you’re actually wrong. The word salad doesn’t change that. As many have pointed out to you…

But no one has taken money out of your take home have they?

They do make it confusing! It took me a while to get my head around it too. Wishing you luck with your business.

But you’ll be a contributor to society and not on benefits and have the option to improve your lifestyle isn’t that worth more?