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.

I think somewhere along the line you must have made a mistake as PP said it should not be such a.huge difference (i am entitled to more under UC than TC).

If you try the policy in practice calculator (also recommended on gov.uk) this shows how the calculation is worked out in detail, i recommend using this function as it might give you an insight as to why is is such a big difference.

@wowbutter, your situation sounds very similar to mine.

It seems ridiculous to me that you or I or anyone in a similar situation WHO DO IN FACT HAVE JOBS would be expected to sit in the job centre and justify their claims.

Are you claiming childcare vouchers or tax free childcare? This makes a big difference to the impact of childcare costs for us. I hope you find a way to make things work. I guess you've got to look on it as the long game.

Thanks @donttouchthemoustache, I'll try that.

There's a calculator over on entitledto.co.uk which shows entitlement on the current system and on UC. I've done a calculation and it's saying we would get more than we currently get We get a small amount as I have a child who receives DLA with high rate care/mobility so because our 'pot' is larger it doesn't get entirely wiped out by DH's income (if we didn't have a disabled child we would be in the nil entitlement category), the UC amount that the calculator is giving for our details is nearly £200 a month more than we get now.

I think the cut off point for Child Tax Credit is 40k so if your joint income is over that you won't be entitled to it.
So if your income has reduced I would reapply. I get around 900 a month tax credit, I don't work but husband earns 22k a year on average. That's the disabled child element though. Before that I got £683 a month.

a) it is unfair
b) n/a imho but could be argued those already in the TC system made decisions based on it and should therefore be grandfathered in
c) most obvious thing you have probably missed is that George Osborne rolled back the cuts to TC which would have brought it more in line with UC rates following pressure from the HoL.
d) reasoning for change was to front end UC to make it more generous at the bottom end while withdrawing it more quickly to prevent people being caught in the benefit trap of work not paying. Some of the cuts have been compensated for by increases to NMW, starting rate of tax, increased childcare subsidy - apparently there are winners as well as losers under UC but I'm not sure who they are.

I think the cut off point for Child Tax Credit is 40k so if your joint income is over that you won't be entitled to it. So if your income has reduced I would reapply

Our 'normal' income would be above this, but in a year which is mostly filled with mat. leave, it will be below. This is why I've never applied before! The point is, however, that I can't apply for TC, as UC is apparently now in effect in our area.

Thanks @howabout

Yes, it would be interesting to know who wins!

Im not sure anybody wins with UC. And I agree the discrepancy between TC and UC us unfair and it can be massive. I work 30 hours a week, am a lone parent, have a disability, have an adopted child with additional needs (but not classed as a disability) I currently get approx £200 WTC and CTC a month. Using any of the calculators shows that I will receive nothing when I eventually get moved to UC. Heaven knows how we will survive as we barely scrape by at the minute.

Well I've made no progress with the other calculators. Entitled to doesn't seem to provide a like for like comparison? And policy in practice seems to compare your in work calculation with what you'd get out of work but I can't seem to be able to compare what I'd get with TC vs UC. Maybe I'm missing something.

My feeling is there are a group of people including myself and a few pp who just ARE significantly worse under UC, no matter which calculator you use.

This is the IFS assessment of the changes

www.hfma.org.uk/docs/default-source/our-networks/faculties/andrew-hood-presentation-hfma-23-jan-2018

"Winners (on average)

• One-earner couples with children: tend to lose less benefit entitlement when first earner moves into work than under legacy system
• In-work renters: UC withdrawn more slowly than combined housing benefit and tax credit entitlements

Losers (on average)

• Everyone else
• Those with substantial assets can lose a lot (UC asset test harsher than tax credits), also those with one member above SPA , and some disability benefit recipients
• Working lone parents also hit hard"

Why did you decide to have another child if you couldn't afford it? Why should we subsidise your lifestyle? Save up or your husband needs to get a better or perhaps a 2nd job. That's what decent people do.

OP on the policy in practice there are 2 buttons one saying current system and the other saying universal credit and even a chart to compare the two in the results section, I've attached a few screenshots based on 2 adults 2 kids 15 hours childcare, 1 salary of about 650 p/m and one at 22k per year (I don't know your figures so I've put some example figures in to show you.)

You can even further break down the UC to show exactly how the figures are worked out.

The example I have included is based in renting as i don't think you specified if you rent or own

Why did you decide to have another child if you couldn't afford it? Why should we subsidise your lifestyle? Save up or your husband needs to get a better or perhaps a 2nd job. That's what decent people do.

Did you even read the opening post before you decided to start spouting crap?

OP has said they don't claim anything aside from child benefit and maternity payments. They both work. Someone has said they may be entitled to Tax Credits so she has done a calculation. She has also looked at UC. She is asking about the discrepancies between TC provision and UC provision.

Did you even read the opening post before you decided to start spouting crap?

Of course not. They saw the mention of benefits, and had to immediately post their mean little opinion.

The trouble with people like that, is that they don't follow through their belief that people should only have children if they can afford it, to its logical conclusion. IE that if poor people stop having children, those in their ivory towers will have no one to wipe their arses when they're in their infirmity. Or anyone to produce their food, get rid of their rubbish, serve them in shops or restaurants, clean their home and workplace....etc, etc, etc.

UC works for me, and is FAR better than TC as it's calculated monthly not annually. So any minor changes in my earnings are adjusted monthly rather than waiting until my renewal then being told I owe them thousands (as has happened before).

The UC I actually receive bears no resemblance to the amount the calculators suggested I'd get, which is strange. I am a lone parent, with 2 DC at home, one of whom receives higher rate DLA. I work slightly varying hours, but between 12 and 20 a week.

You do have to lay yourself bare though, I had to go to a Jobcentre to show all my ID and documentation but since then I've been able to do it all online.

stat mat pay is ~600pcm no??

SMP is £145.18 p/wk or 90% of your usual weekly earnings, whichever is lower.

Thanks for that donttouch I will take another look.

And thanks also to @whatshallidonowpeople for the unnecessary judgement. I guess your husband has an amazing job, as with your frankly pitiful skills in reading and comprehension, I can only assume your own earning potential is not up to much. As has already been pointed out to you by previous posters, I am able to provide for my second dc. If you had read my post, you would have seen that we both work and earn a wage sufficient to meet our living costs. I have stated that I value my work and have no desire to stay at home and be supported by my husband, the state or anyone else. I've further explained that my concerns that led to these enquiries were connected to the short period of time (5-6 months) in which I will be earning statutory maternity pay only. I've also stated that I'd rather find a way to increase my earnings - which fortunately I am able to do - than claim the amount that I am entitled to.

But that's the point isn't it. If someone is entitled to a benefit, they are free to claim it if they wish. Do you claim child benefit? Have you ever had maternity leave? Or do those handouts ok to be claimed by decent people like you? You should probably consider whether your particular brand of judgement and unpleasantness falls under the banner of decency as it seems to be an important concern to you.

Thanks @motherforkingshirtballs for pointing out the glaring flaws in those comments in my absence.