to not understand tax credits vs. universal credit / to feel slightly hard done by

[Mollywobbles82]

Have NC for this. For context...

We are a 2 parent household, both working. Always have, apart from 9 months maternity leave. Will be taking my second round this summer. Normal working hours around 21pw. DH full time.

We are fortunate to get by on our wages in an expensive part of the country. This is mostly due to having very low (well, low by local standards) housing costs and living pretty frugally. Other than CB & stat mat pay, I've never claimed a benefit. I have been starting to worry though about how we will cope for the time period in which I'll be bringing home stat. mat. pay only. The difference between my normal wage and stat. mat pay is around £1k a month, that £1k covers our housing cost inc. c. tax. Obviously economies can be made, but not amounting to £1k. I understand that TCs are based on last year's income. My 2017-18 income will be broadly similar to 2018-19 as both tax years will include a period of mat leave with roughly the same number of months of stat. mat. pay.

A family member has advised me to look into claiming tax credits. They are also a 2 parent family to 4 DC. One works FT, the other hasn't worked since the 2nd DC was born and has no intention of returning, at least for the foreseeable future. I don't know what they get in tax credits, but it constitutes an income sufficient for 1 adult to meet their own personal expenses as a SAHP, buy household groceries and clothe the DC. (The working parent pays the mortgage / bills / car costs etc and they don't share finances.)

So, on this person's advice, I looked into the possibility and found that when DC2 is born, we would be entitled to around £300 every 4 weeks. However, it seems that actually we now have UC in our area, and the exact same information inputted produces an amount of around £1100 annually, so a fraction of the £300 every 4 weeks we would otherwise have received.

As I said, I've always worked, I'm not au fait with the benefit system. So can anyone explain to me how or why this is so? It would seem unfair. I have pretty much already come to the conclusion that for £1100 a year, the hoops I would have to jump through are not going to be worth jumping through for us. (Is it really true that they expect you to go to interviews / groups etc at the job centre?? I can think of things I'd rather be doing on what will be my last maternity leave...) I'd sooner find a way to up my earnings by that amount.

I'm trying not to compare myself with said family member. I don't want to be a SAHM. I like my job, I'm good at it, it pays me relatively well, there's a lot of flexibility. I wouldn't want the life they have, although I completely respect anyone's right to try and build the kind of life they want. But I can't help feeling it's a little unfair that the other family is supported year on year to keep one parent at home and will be seemingly indefinitely whereas the only support available to me during a (short!!) period of much reduced income due to maternity leave is so minimal (under £15pw according to the website calculator) that it's barely worth claiming. Is this an unreasonable way to feel?

Sorry that was so long. I'm prepared to be educated on this, I've probably failed to consider things. Information or views from all sides welcome.

Nobody wants to tell me I'm being unreasonable?!

it's because tax credits is the old system, but UC will take years to roll out everywhere so TC still exists in many places. The current government wanted to do away with TC but it's a mammoth task to do so.

Another way of looking at it is that TC was good, but the government want it away for dogmatic reasons because they're arseholes, so they're inflicting UC on people instead.

I'm in a UC area but I get to stay on TC so long as I don't vary my claim by, e.g., changing who lives in the home.

UC is grossly unfair. It's very controversial. Tax credits and UC really don't match up despite UC being a replacement for tax credits.

Secondly, stop comparing yourself to your family member. You come across as a bit bitter and jealous of their situation. If you really want to receive more UC then think about quitting your job.

So at the moment, we get TC with an extra element for a disabled child.

I actually have two disabled children (second diagnosed since made original TC claim) but I can't declare that or they'll stop all our money while they ship us onto UC and give us far less. It's a ridiculous mishmosh of a system.

UC is calculated on what you are earning now, not on previous tax year earnings. Could that be a reason for the discrepancies?

I wouldn't bother tbh. Due to 1 year between my babies I didn't return to work and thought we would just get by by me going onto UC for the time being until I went back to work. Nope. DH works long full time hours and gets paid well for what it is, but we still can hardly afford to feed ourselves. For some reason we get more 1 month and then like this month we get nothing. No explanation, and we really struggle on it as it is.

I can't wait to be able to go back to work (somehow without incurring childcare costs!!) and actually afford nice things for my children like clothes, without relying on family to buy for me.

UC is much worse for some groups of people.

I have a client who is disabled and on PIP and ESA, plus HB for her rent. She has to move. When she does, she will have to claim UC, because HB will no longer process new tenancies, and she will lose nearly £80 pw, because there are no disability premiums in UC.

It's bloody criminal imo.

I don't know if you are being unreasonable or not. You really should not compare your finances to your friend. She may not be telling you the whole truth about her financial situation. Maybe they are used to living on a low budget. Maybe there are reasons she feels she can't go back to work.

You come across as a bit bitter and jealous of their situation.

I'm really not jealous of their situation. Like I said, I feel fortunate to have my job, I've worked hard to get where I am. It's not the dizzy heights of a great career, but it works for me. I wouldn't want to swap roles with the other person. Even forgetting my lack of desire to be a SAHM, assuming they manage to live off TC/UC until all the DC are 18, the day will come when they need to support themselves and I don't envy anyone essentially starting out in the workplace in late middle age.

If you really want to receive more UC then think about quitting your job.

Even if I had stated a deep hatred for my job and a heartfelt desire to stay at home, this would surely be terrible advice?

I don't think anyone would be unreasonable to criticise UC. In fact, the more people who would not traditionally be seen as 'benefit claimaints' draw attention to just how bad UC is, the better.

DH works long full time hours and gets paid well for what it is, but we still can hardly afford to feed ourselves. For some reason we get more 1 month and then like this month we get nothing. No explanation, and we really struggle on it as it is.

If he gets a lot of overtime or a bonus in one month, UC will drop the following month because of his higher earnings. With tax credits, it stayed the same for the full year, and was revised at the annual review in the summer.

I suppose it depends on whether you prefer lots of small(ish) adjustments throughout the year, or a whopping great overpayment at the end.

Have you used a benefits calculator like turn2us or policy in practise? They will give you what you would be entitled to under both schemes. The latter one will give you a detailed break down of how each is worked out.
I use these and my advice is put in the salary you will actually be on over the period of mat leave rather than your previous years earnings to get a better sense of what you will earn.
When I claimed tax credits on mat leave I had to apply using my previous years income and get told I was entitled to nothing then call and report my mat leave as a change of circumstances (was told they had to go through this long winded process) but it meant I was being paid based on my current earnings rather than previous years as it was significantly less.

Have you not been claiming child tax credits?

You really should not compare your finances to your friend.

Everyone saying this is right. This whole thing came about due to their recommendation that I pursue TC based on their own experiences. I suppose that's why the comparison is at the forefront of my mind. I will try to forget it.

The bigger unfairness is about the difference between TC and UC. I would have naively assumed that it was just a simplification of the system, but essentially what you'd get would be the same. It's now clear that isn't so. If I had had my first DC six months earlier, and had therefore been in this position before January 2018, I would be hundreds of pounds a month better off? I suppose my AIBU is more about that. I wondered if I'd somehow missed something. But it seems like I have not...

Won't all claims be migrated to UC eventually in the next few years anyway?

Have you not been claiming child tax credits?

I looked into eligibility when our DD was born, and we were not entitled to anything, so no. I've never claimed any benefits apart from CB and stat. mat. pay.

DD2 is due this summer, so I revisited the calculations with that in mind.

Won't all claims be migrated to UC eventually in the next few years anyway?

From what I've read today, if any existing claimants will lose money under UC they will receive top ups for anything up to a number of years to match the amount the received under TC. Happy to stand corrected on that though.

You said you feel hard done by because your family member gets more benefits than you because they don't work. I don't really know what you want people to say to you?

Forget about your friends financial situation and concentrate on yours.

Have you used a benefits calculator like turn2us or policy in practise? They will give you what you would be entitled to under both schemes.

I used the tax credits calculator on gov.uk and the universal credits calculator on entitledto. Did them one after the other today with the same info.Would any other calculator be likely to give different results?

The difference between the two systems isn't that great....the calculations will be wrong

@RelentlessSylvi
I actually have two disabled children (second diagnosed since made original TC claim) but I can't declare that or they'll stop all our money while they ship us onto UC and give us far less.

Are you sure? As I understand it, you are only transferred to UC when the change in question would have amounted to making a new claim for what (pre-UC) would have been a legacy benefit. E.g., if you have your first child, you 'try' to make a new claim for CTC but you can't because you're in a UC area, so are directed to UC instead. But changes to your CTC claim don't trigger a change to UC because you're not claiming a new benefit, you're just making an adjustment. So, if you're already claiming CTC and say, become responsible for a 2nd child, that doesn't trigger a transfer to UC. I would have thought it would be the same for adding a disability premium.
www.entitledto.co.uk/help/changes_that_trigger_Universal_Credit

@LakieLady
I have a client who is disabled and on PIP and ESA, plus HB for her rent. She has to move. When she does, she will have to claim UC, because HB will no longer process new tenancies, and she will lose nearly £80 pw, because there are no disability premiums in UC.

Is there any way she can stay in the same local authority area?

You said you feel hard done by because your family member gets more benefits than you because they don't work. I don't really know what you want people to say to you?

Sorry if it wasn't clear. Any unfairness I feel is due to the difference in what I would have received in TC (enough to help me through the 6 month period in which I'll be receiving stat. mat. pay only) and what I will now receive in UC (not much, and with added complications and conditions, eg attend job centre etc).

I've said I don't know much about benefits. I'm hoping that people will either a) agree that it's unfair, b) explain why it's not unfair, c) make helpful suggestions about where I might have missed something or d) explain more about the reasons behind the change. Fortunately most posters so far have done one or more of those things.

I completely agree that it's unfair.
I received working tax credits to pay for dc1 childcare. When they became eligible for free childcare my claim closed, I didn't realise it had closed, I assumed it was just out on hold or something as I was no longer eligible. But no, they closed it.
I now have dc2, and under tax credits would be entitled to 470 a month for them. Under universal credit I am entitled to 37 a week. And that means going to the job centre etc and explaining myself.
We are in a universal credit area now, I cannot reopen my tax credits claim, and I cannot be bothered going to and from the job centre with a small baby in tow to beg for that pitiful amount.
That 470 was going to pay half my childcare bill to allow me to work. Now I seriously have to consider my job. And I hate that.

The difference between the two systems isn't that great....the calculations will be wrong

This is what I am wondering, but given that I used the exact same info in both calculators, how can this be so?