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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

Universal Credit - how can this be right?

478 replies

beentheretoo · 04/03/2021 23:24

I’ll admit I know very little about Universal Credit apart from what you hear on the news thankfully (touch wood) never had to claim).

A friend recently got a new job 2 days a week I congratulated her and said it’s the type of job they are always looking for people I bet they’ll be offering you more days in no time. She then said oh I don’t want more days it’ll affect my UC, I’m allowed to work up to 16 hours before they take money off me and besides I’m really looking forward to having 3 days to myself once the kids are back in school. She’s a single parent her DH left her when she was a SAHM she was on full UC for a bit then had another PT job now this new one (she has a degree but doesn’t want to go back into that field).

I was thinking about it how can they be right that if you work 16 hours you get full UC but if you work 20 you get money taken away? Where’s the incentive to work more hours? My friends DC are older so doesn’t need childcare and I’m sure loads of people would love 3 days to themselves I bloody would.

Am I getting it correct then?

OP posts:
Cassimin · 04/03/2021 23:31

I’m not sure about the working of the uc but she must be living on a strict budget.
If she’s a single mum as well as working she is looking after her home and her children mostly on her own.
If she values a bit of time to herself over earning a lot more money I think that is up to her.

wewillmeetagain · 04/03/2021 23:41

It is most definitely not worth working more hours when claiming certain benefits! You don't get to keep the extra money they just reduce the benefits so you end up paying more rent or getting less in benefits! Im currently in the process of going back to work after being a carer for a few years. I will be doing a professional job earning upwards of 25k yet I will be far worse off than if i just went and worked in a little part time minimum wage job.

wewillmeetagain · 04/03/2021 23:42

To add I will also be worse off than i am currently on just benefits! The system is all wrong!

womaninatightspot · 04/03/2021 23:44

They reduce the benefits at 66p in the pound so you should in theory be better off working more. However travel expenses, childcare and you can easily end up worse off.

Theunamedcat · 04/03/2021 23:45

They take away 63p in the pound it actually does make sense to work more hours unless you pay childcare which is a shitshow to claim back

ohwaitthatwasme · 04/03/2021 23:48

It's not really a UC only thing. I remember a colleague 30? Years ago who would t do any more then 16 hours because it affected her FIS (family income support), tax credits came along, same thing, now it's UC. It's not a new problem.

Original poster
beentheretoo · 04/03/2021 23:50

@wewillmeetagain that’s awful I truly didn’t realise so your actually better off working 2 days a week than working FT for 25K, how is that any incentive to go retrain and work more hours?

What’s the point in working full time then? You might as when just work 2 days and have the rest of the time to yourself (I’m feeling like that just now as my mental health could really benefit from it).

I don’t think UC should be less but at the other end wages should be higher then so that if you do work more hours it’s worth your while.

OP posts:
user127819 · 04/03/2021 23:52

Normally you can't earn anything without your benefit being reduced. You only get the work allowance if your ability to work is limited by a health condition. So I would assume that's the case with her (if not, she needs to be careful as UC will want any overpayment repaid if they find out she's earning and not declaring it).

MrsBerthaRochester · 04/03/2021 23:53

Feel free to give up the job op and see how fun it is living on benefits. Universal credit is a disgrace to this nation but obviously we should just go back to the workhouse system......

sst1234 · 04/03/2021 23:54

And this is why the general population feels how they do about benefits.

Viviennemary · 04/03/2021 23:55

It's a mad system. I thought all this can't work because of losing benefits was abolished.

MrsBerthaRochester · 04/03/2021 23:58

The general population? You mean the vast majority who claim working tax credits? Millions are unclaimed in benefits every year because people still buy into this benefit scrounger crap. People in this country having to rely on food banks? Focus your froth on that.

MorriseysGladioli · 05/03/2021 00:01

You also will need to go through all the rigmarole of informing HMRC of changes, and so on, which can be quite daunting.

Pumpkinstace · 05/03/2021 00:03

When you earn UC and work, the first £290ish your earn doesn't effect benefits.

After that they deduct 63p from the UC for every £ you earn.

It means you are better off in work, but at you've earn the first 300 quid you are only working for about £3.20 an hour extra in your pocket if you are on minimum wage.

Sometimes a combination of travel, short shifts and childcare costs make it not really worth it.

Pumpkinstace · 05/03/2021 00:04

But after you earn... sorry typo

MiddlesexGirl · 05/03/2021 00:04

She'll get a work allowance because she has kids.
I'm guessing what she really means is that she'll have used up her work allowance and be on the taper rate (63p in every £1) if she works more hours. So she would be better off but not significantly and with the mess of childcare it's perhaps not worth the hassle.
Legacy benefits like JSA/ESA can have a 16 hour limit.

Notglam · 05/03/2021 00:05

This isn’t correct. For every £1 you earn, UC is reduced by 63p. Also, if you work under a certain amount of hours, the agreed minimum that was decided when you signed up, usually 35hrs. You will still be made to see your work coach and apply for jobs that have more hours. Unless you can reasonably justify why you cannot. If you don’t, you risk being sanctioned.

MiddlesexGirl · 05/03/2021 00:06

Just to clarify some other posts .... the work allowance only applies if you have limited capability for work or you're responsible for children. Without one of those there is no work allowance and the taper rate applies to all earned income.

DogsAreShit · 05/03/2021 00:06

She won't be on full UC but she will be getting some - as pps said, for every £ she earns over the threshold she'll lose 66p of UC. The threshold is lower than 16 hours MW so she won't be on a full award and yes you are pound for pound better off w
the more you work due to this.

But. Presumably she has to pay childcare for every hour she works and commutes, given that she's single. That won't be reimbursed anywhere near in full, so what she has to do is work out where the point is where she's losing the least amount in taper and spending the least amount on childcare, across the year. It's actually quite complicated to get right and depends on her employment contract, whatever childcare contracts she has etc. Presumably the 16 hours is that point for her, all things considered.

Hopefully once she gets a few wage rises etc (if any of us ever get wage rises again!) she'll be able to look at gradually increasing so that she doesn't end up ten years down the line facing her income drop off a cliff when the UC stops and she realises she's paid fuck all into a pension.

Not a series of decisions you'd enjoy having to make for sure OP, any of it.

Pumpkinstace · 05/03/2021 00:11

No one is better off working 2 days a week and claiming UC than they are working full time for 25k

Not in normal circumstances anyway.

Doyoumind · 05/03/2021 00:11

If she's only working 2 days she's likely to be stuck with that financial set up long term as there won't be career progression or the opportunity to earn more. It's short term gain for long term pain. You really don't get much on UC. It's not like you can live the high life.

Sapho47 · 05/03/2021 00:13

@beentheretoo

I’ll admit I know very little about Universal Credit apart from what you hear on the news thankfully (touch wood) never had to claim).

A friend recently got a new job 2 days a week I congratulated her and said it’s the type of job they are always looking for people I bet they’ll be offering you more days in no time. She then said oh I don’t want more days it’ll affect my UC, I’m allowed to work up to 16 hours before they take money off me and besides I’m really looking forward to having 3 days to myself once the kids are back in school. She’s a single parent her DH left her when she was a SAHM she was on full UC for a bit then had another PT job now this new one (she has a degree but doesn’t want to go back into that field).

I was thinking about it how can they be right that if you work 16 hours you get full UC but if you work 20 you get money taken away? Where’s the incentive to work more hours? My friends DC are older so doesn’t need childcare and I’m sure loads of people would love 3 days to themselves I bloody would.

Am I getting it correct then?

It reduces by less than you earn.

So work

16 hours full uc
Work 20 hours 4 hours extra pay but uc reduces by less than this.

So you're always "up" by taking more hours but like she said people are happy to take the hand out have less money and have 5 days off a week

DogsAreShit · 05/03/2021 00:15

Actually, I've just seen that you've said she doesn't need childcare, which means the youngest is 12 so presumably the oldest is 13 at least. That means she's only got another three years of UC that covers all three members of the household, five max providing the eldest stays in fte. Doesn't sound so great really.

UhtredRagnarson · 05/03/2021 00:18

Ok

The first £292 you earn per month is discounted by universal credit. On minimum wage this works out at 7.72 hours per week so I’m not sure why your friend thinks 16 hours is the magic number. This means whatever your universal credit amount is, let’s say £1000, you get to keep the £1000 plus the £292.

Anything you earn above £292 is discounted at a rate of 63p per pound. So if you earn £600 per month, £308 would be used to calculated the deduction.

£308x 0.63= £194

So they would take £194 off your universal credit amount of £1000.

£1000-£194= £806

So your total money for the month would be

UC = £806
Wages = £600
Total = £1406

If you work more hours and earn £900 per month the same calculations are applied

£900 - £292 = £608
£608 x0.63 = £383

£1000-£383= £617

So your total money for the month is

UC = £617
Wages = £900
Total = £1517

So you are always going to be bringing in more money by working more hours on UC

meeeeh · 05/03/2021 00:19

I had heard about this. I've just had a baby and I'm looking at going back to work 16 hours per week (I will work the 2 days my husband is off) as the cost of childcare is nearly the same as what I'd earn. I thought I could claim something on this but when I looked into it online it said I wouldn't be entitled to any benefits