To think UC guidelines regarding savings are unfair

[dancinguser]

Prepared to get flamed for this and apologies if it's been done before but here goes.

So it's looking likely that DP will be made redundant within the next few weeks due to there not being enough work coming in to justify bringing back all of the staff that were working pre-lockdown.

I had a look into universal credit should this happen to see if we're able to get any support until he can find another job and we meet all of the criteria except "you and your partner have £16,000 or less in savings between you." We have been saving for a house deposit for 2 years and have just over £16k between us. Pre-lockdown we were viewing houses and have been waiting for the right one to make an offer on.

Now before the obvious is stated that we wouldn't receive support as we have money that others don't which could pay for the rent, bills etc. I've put an example below to explain why I think it's unfair -

Person A earns £30k per year, their outgoings total £10k leaving them with £20k. They spend a little of the money but put over £16k into savings for a house.

Person B earns £30k per year, their outgoings total £10k leaving them with £20k. They spend this money on luxuries such as a new car, designer clothes, a new sofa, the latest iPhone.

Both Person A & B lose their job. Person B receives UC to help pay their rent and bills, whilst sitting on their new sofa in their designer clothes with a nice car sitting in the driveway. Person A must burn through their own savings before being eligible for support, all whilst having 0 luxuries.

So whilst at face value it makes sense that people with savings pay using them, I find it ridiculous that two people who have had the exact same money coming in wouldn't receive the same support based on whether they are good at saving their money or not. Why are people who choose to save their money being penalised against someone who may have spent their money frivolously? IMO if two people both have had the same income they should be eligible the same support, AIBU?

Another Emma - Yes I agree but if a carer has no other income they will be able to claim UC ( or Income support, housing benefit, tax credits on legacy benefits ) alongside the carers allowance, it's not just £67.25 a week . I agree it should be more though.

YANBU - wish the irresponsible people who keep buying beyond their means wouldn’t be ALWAYS put first 😔😡

My DP is being made redundant. We are both mid fifties. I earn a very low wage. My DP is of an age to take his private pension, but rather than take an annuity he will draw down occasionally when extra money is needed. He won’t withdraw enough to pay any tax. This will be done after our savings are depleted. If we are able to claim some UC due to my low wage will his pension money be classed as an income?

Thebear - Yes pension income would reduce UC pound for pound unfortunately.

@Thebearsbunny

My DP is being made redundant. We are both mid fifties. I earn a very low wage. My DP is of an age to take his private pension, but rather than take an annuity he will draw down occasionally when extra money is needed. He won’t withdraw enough to pay any tax. This will be done after our savings are depleted. If we are able to claim some UC due to my low wage will his pension money be classed as an income?

Yes. Even money from student loans is counted as income.

@DrCoconut

Babyroobs is right, there should be a scheme where the money saved can only be used for a house deposit. That money would not then be spent on luxuries but in secure housing for life. It should not be counted for UC claims as it would be inaccessible as cash flow. If you consider someone going onto UC at for example 30 years old and getting their rent paid due to low income and then retirement that’s a lot of money. Even at say £200 a month (to average out higher and lower entitlements as kids grow up, wage improves but just enough to reduce rent allowance etc) for 50 years it’s £120000 in today’s money. The government should be forward thinking and looking at saving that. And then you get onto the security that an inheritance can provide for the next generation. As I said I think UC is ideological. The rhetoric about scroungers, why should they have anything, you’re paying for this etc. You didn’t get that with tax credits. They were seen as a bit of help for (mostly) working families and there was no shame attached to them.

What sort of a house could a person needing their rent paid for life actually buy in the first place? Wouldn't they also need someone else to cover their mortgage payments if they never earned enough to support themselves?

People can actually have a pretty high income and still be entitled to UC.

@Babyroobs

DisobedientHamster - There are loads of people still on tax credits and as long as they don't have a change of circumstances they will continue to be for some years to come as managed migration is likely to take years. Even when they are migrated to Uc I think their savings will still be protected and will not affect their Uc entitlement. How is it fair that one family on tax credits who have likely claimed benefits for years could have an inheritance over 16k and it not affect their monthly payments at all, yet another family recently claimed Uc due to redundancy who could never have claimed benefits before in their lifetime could inherit over 16k and their UC would stop immediately ? It's a shocking way of treating people differently.

My question is not why people on tax credits and have 16k of savings and people on UC can't but why was there a system in the first place that allowed people to have benefits when they had savings like that , too late now to change it of course so many people are still on tax credits, but certainly the solution can't be to amend UC just because the last benefit system was more generous

Witches - My very well off BIL who has lived in the USA for thirty years asked my SIL if he could use her London address to claim his free London bus pas/ travel card for when he returns for visits !! Pleased to say she swiftly told him where to go !!

@Babyroobs

People can actually have a pretty high income and still be entitled to UC.

Why are highly paid people eligible to have their rent paid?

Oldsu - There are a lot of shocking things about tax credits that have been allowed for 20+ years like people being able to work just a few hours a week even when their kids were teenagers and getting hundreds of pound worth of benefits a month, wheras now on UC you need to be looking for work earning 35x nmw when your child turns 12. things absolutely needed to change.

The thing is, DrCoconut, UC is designed so the person doesn't stay on it from age 30 to retirement age. It is designed so people get work, enough work so they are paying most if not all of their support costs. If you can, watch the BBC show about it. You are heavily, erm, encouaged to take jobs/multiple ones to pay your own way until pension age.

This is my time : Everyone still get a rent element on UC ( as long as you rent ! ).Even on a pretty high earnings many will still get UC, it only takes having a few kids born before the 2017 cut off date and perhaps high childcare costs and a high rent and that makes their Uc entitlement very high meaning that even when a deduction has been taken for wages they may still get a significant amount of UC.

@Babyroobs

Oldsu - There are a lot of shocking things about tax credits that have been allowed for 20+ years like people being able to work just a few hours a week even when their kids were teenagers and getting hundreds of pound worth of benefits a month, wheras now on UC you need to be looking for work earning 35x nmw when your child turns 12. things absolutely needed to change.

But they are. The tax credits are going, no new claims for them for 2.5 years now. Plenty of things trigger a move to UC now. They will be completely phased out. Why keep pointing out how unfair things are on tax credits v. UC when a) you can't claim tax credits as a new applicant any more b) everyone is going to be on UC in the next couple of years? It's a moot point. The tax credits are going, going, gone. And don't matter to new applicants as it's all UC now.

@Babyroobs

This is my time : Everyone still get a rent element on UC ( as long as you rent ! ).Even on a pretty high earnings many will still get UC, it only takes having a few kids born before the 2017 cut off date and perhaps high childcare costs and a high rent and that makes their Uc entitlement very high meaning that even when a deduction has been taken for wages they may still get a significant amount of UC.

How bizarre.

Anyone moaning about people having savings for a house, if you buy a house, you don't get housing benefit, so saving thousands in benefits a year, any mortgage help you get is a loan that you have to either pay back or have as a charge on your property when you sell it.

@DisobedientHamster

The thing is, DrCoconut, UC is designed so the person doesn't stay on it from age 30 to retirement age. It is designed so people get work, enough work so they are paying most if not all of their support costs. If you can, watch the BBC show about it. You are heavily, erm, encouaged to take jobs/multiple ones to pay your own way until pension age.

the thing is UC is something that people will dip in and out of throughout their life times, many will be dependent on it when thy have young kids and then may not claim it when the kids have left home . Like I said earlier I see large numbers of my clients who develop illness or get made redundant in their late fifties and early sixties, they will never work again, have partners not working or on a low income and aren't eligible for their state pensions until they reach 67 ( and rising), so they claim UC again to get them by until pension age.

This is my time - You think it's bizarre that people get help with a high rent and / or high childcare costs?

Some people could potentially be paying £1200 a month rent in parts of London and the south East and another 1k a month in childcare costs, this would potentially wipe our even a decent salary with nothing left to live on if people could not claim help from UC ?

@Babyroobs

Oldsu - There are a lot of shocking things about tax credits that have been allowed for 20+ years like people being able to work just a few hours a week even when their kids were teenagers and getting hundreds of pound worth of benefits a month, wheras now on UC you need to be looking for work earning 35x nmw when your child turns 12. things absolutely needed to change.

Tax credits haven't been around for 20+ years. They were introduced in 2003 and you haven't been able to put in a new claim for over 2 years.

They have been, in benefit terms, a very short-lived benefit.

Lyra - People could still potentially be on tax credits for years. I've no doubt that with the hundreds of thousands of new UC claims that have been made over the last few months, that managed migration will be put back even further now and like I said previously even those that are forced to go onto Uc will have protection.

It's a new system and the old system, which people are still on, took account of this happening and didn't insist on dragging everyone down to the gutter. New TC claims stopped just over a year ago for those with 3 children, 2 years ago for everyone else. If this had happened 3 years ago, people would have been ok with their savings.
And that's the difference between the Tories and everyone else
Most people on this thread, and at elections, agree with them so that's what you are stuck with

@Babyroobs

Lyra - People could still potentially be on tax credits for years. I've no doubt that with the hundreds of thousands of new UC claims that have been made over the last few months, that managed migration will be put back even further now and like I said previously even those that are forced to go onto Uc will have protection.

It's likely the opposite in my opinion. Many, many more people will have to claim UC because of a change in circumstances than expected because of the pandemic. Being outwith the managed migration will mean they don't have their transitional protection.

The government could have introduced a regulation to ignore house deposit savings which are in a help to buy or lifetime isa for a short period as one of the measures to help during this crisis. The same as profit on a house sale can be ignored for up to 6 months. It will also adversely affect those with mortgage endowment savings.

Typical Tory ideology, promote the right to buy with massive discounts and subsidies and then pull the safety net.

Lyra - I guess so maybe, it will depend if people can keep enough hours to continue claiming WTC, or can hold out just on tax credits for a short while and get a new job fairly quickly. People with savings will be forced to stay on tax credits if they can't claim UC then I guess and then claim UC when their savings drop. It really is going to be a shit storm for so many people if and when we have mass redundancies. There are many aspects of Uc that are far better, it really is better for lots of people, particularly those working but not so good for other groups.