Universal Credit - how can this be right?

[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?

@boltfromtheblueblue

If you qualify for any amount of universal credit, then absolutely - you are in part of the income spectrum where you will only be fractionally 'better off' than if you were earning less and topped up....That's because of the taper and the product of the effective marginal rate of taxation. Which is what some of the martyrs on this thread refuse to acknowledge

It's not about "refusing to acknowledge it", it's about understanding that a purely monetary calculation isn't (or shouldn't be) the point. Earning your own money instead of being on benefits, building your career, having pride in yourself, working for self esteem and self worth, all of those things matter too.
If you stick with the mindset that its not worth it, its only a little more money, you're better off not working more and staying on benefits, you're losing out on so much more. And, and its a big and, you are feeding that idea to your children who are then more likely to perpetuate the cycle and do the exact same thing.

Pride and self-esteem don't pay the bills though, or stop the exhaustion people are prone to if they work long hours and have kids.

Your point is a valid one for people in roles where there are genuine career prospects, but a lot of jobs are just jobs. And I think the best way to promote people's self and esteem in work is by making sure they are well rewarded for it.

If I worked 10 hours overtime and only ended up £20 better off, I wouldn't be feeling self-esteem or self-worth, I'd be feeling like a fucking mug.

It's definitely short time pain for long term gain. I have been a sp since dc was 6 months and at some points pre school I was working for v little for hours over a certain point, but I kept my pension and career progression and have had pay rises and promotions, so we'll worth it. If on minimal wage and few progression options it must be more difficult to look for the long term benefits. I really think the advantages of establishing your career before having children should be emphasised more

[quote Ylvamoon]@AnaisNun - so you pay 50% of your childcare bill.
Do you think that's a bad idea? Is Taking financial responsibility for yourself and your children a bad thing?

Where does the states responsibility end and individual responsibility start?[/quote]
The states responsibility should be to stop meddling with everything! That's the whole cause of the shitshow we are in.

Benefits are not there to help claimants build up assets. They are a bare minimum safety net. Would you give the cost of your deposit and associated inflation back to the taxpayer when disposing that asset? Yes this situation creates a cycle of dependency, which is also not good, but the idea is that money goes straight back into the economy, even if it is on your landlords mortgage.

Wrong. They allow claimants to build up assets in the form of a pensions.

They also allow private landlords to build up assets.

its the poverty trap. It takes a really decent wage to make it worth what youd give up, although as her kids get older, she would be expected to be looking for full time hours.
These people on low hours arent counted in unemployed statistics though, so the government are ok with it

@boltfromtheblueblue they are working for £2 an hour. Not an extra £2 an hour.

Why can't ppl mind their own business.
Everyone will do what is best for their own circumstances not what is best according to some random on mumsnet.

@TulisaIsBrill

So you're happy for tax payers money to end up paying for the assets of leveraged landlords, where the claimant is just a proxy to do this?

But not for the claimant themselves to save any money in order to eventually make society more equitable?

Smart thinking there. You should be employed in a right wing think tank.

It seems it's entirely fine for taxpayers' money to be used to pay for property for BTL landlords, but not for people who want a home of their own. But I suppose that's not so very different from subsidising low pay for those employed by private companies.

I'd love to know how much of the DWP budget for benefits for people of working age ends up in the pockets of landlords. I know that pre-UC, the amount of HB that went to PRS landlords was several billions.

It's not about "refusing to acknowledge it", it's about understanding that a purely monetary calculation isn't (or shouldn't be) the point. Earning your own money instead of being on benefits, building your career, having pride in yourself, working for self esteem and self worth, all of those things matter too.

So if you’re on receipt of benefits you have no pride, self esteem or self worth?

Also had it occurred to you that not everyone will be capable of earning more? And they are aware of this? They know there won’t be any promotions or career building in their future.

Not all of us have jobs with career progression. I could work full time in my current role and be financially worse of and still have zero career progression at the end of it.

@Ilovegreentomatoes

Not all of us have jobs with career progression. I could work full time in my current role and be financially worse of and still have zero career progression at the end of it.

Exactly!

Spending some time in the real world would really help some posters here.

@Ilovegreentomatoes

Not all of us have jobs with career progression. I could work full time in my current role and be financially worse of and still have zero career progression at the end of it.

Exactly!

I'm fed up of people going on about "career progression." Who is going to do the minimum wage jobs then? Someone has to do them and not everyone is able to "progress" in their career for various reasons. I could not be a manager for example. I am not a leader. I'd be rubbish at it.

People on minumum wage jobs deserve to have children too. It shouldn't be a privilege for the wealthy only.

Earning your own money instead of being on benefits, building your career, having pride in yourself, working for self esteem and self worth, all of those things matter too

Bloody excuse me I do have a career. Not even just a job, a career that I can progress in. I still receive benefits. Many many people on benefits are working mothers and working families. Please educate yourself.

It depends on childcare as well, if she's only working part time the during the school holidays she only has to find and pay full day care for 2 days a week. Any surplus she make working full time would be eaten away during the school holidays by having for to pay for it over 5 full days and could end up making her worse off annually.

@80sMum

If I ruled the world, Universal Credit would be just that - universal. Everyone of working age who isn't in full time education would get it by default, no means testing needed. It would be just enough for a subsistence level existence, ie it wouldn't cover luxuries such as alcohol, cigarettes, gifts, holidays etc.

Anyone who worked would have their earned income on top of the UC, so it would be worthwhile getting a job or taking on extra hours.

The personal tax allowance would be abolished. Everyone would pay income tax, including on the UC (the net amount of which would be sufficient for the said basic existence).

So when you started earning money, you would directly benefit from it and nothing would be taken away apart from the income tax.

Income tax would be tiered, as it is now, but probably with different thresholds.

I know I haven't really thought this through, but surely something like that would be fairer to everyone?

I would vote for this.

She is talking a lot of bullshit or getting it confused with the old benefits system, where 16 hours of work did lose her all the benefits.

UC does not talk in hours. Where hours are mentioned it is times minimum wage.

At 16 times minimum wage per week the benefit cap is removed. So she actually might be better off working that or more if the amount of benefit cap removed is more than the earnings deduction. This is the case with my sister and I've had people send in fake wage slips to try to get this to happen.

She's bullshitting you because she does not want to work more and using UC as the scapegoat so that you will stop suggesting it.

That said so many people insist the old rules apply to the new benefit it is insane and she might be that stupid that she does not realise the difference. The amount of people who ask me how many hours they can work before it gets taken away and I have to explain it does not work that way. every week

Here the dirty truth. Swathes of middle earners don't get it. They think that they are paying for scroungers and have grotesque attitudes towards the minimum wage earners. just because they've got a 'career' that means they might earn 80k one day.

The really high earners might actually be able to work out the truth. You're stuffed either way unless you earn an absolute shit load, and use every allowance available. In that respect we have more in common with the minimum wage earners and thus way more sympathy and empathy

@TulisaIsBrill I just want to thank you for all your posts on this thread, some of which have been very informative. and I think you should do a financial advice AMA

Not all of us have jobs with career progression. I could work full time in my current role and be financially worse of and still have zero career progression at the end of it

While I fully agree with this, I also think career progression and better job prospects are linked to your employment history.

Nobody just walks into a 40k + job without any workplace experience.
Most of us have to work from the bottom up on low wages. Changing jobs on the way.
I look at myself: 5 years ago I had a good job, WFH 3-4 days/ week. Company was 5min up the road and extremely well paid. Before I worked in similar jobs for a lot less. Thanks to Brexit & covid, this job and the company I worked for are gone. Once again I find myself near the bottom of the pile in a mediocre job. Trying to make my mark with a new employer.

Nothing is guaranteed, but not taking a job because it has zero career progression and thinking that UC is picking up the pieces forever is false economy.

PP talking about a basic subsistence level of benefit for all should look at Universal Basic Income.

Allowing pensions to be built up whilst on benefits is good because it means less reliance on the state in the form of pension credit and housing benefit when the claimant reaches state retirement age.

@Ylvamoon

If the state REALLY want to lift children out of poverty and break intergenerational cycles of benefit dependence, their responsibility starts with making sure that salaries/wages are in line with education costs and rents, i.e after payments of essentials are made, there is enough money to still allow for a decent standard of living. I’m not talking the ubiquitous, tiresome “flat screen TVs and package holidays in Marbella” - I mean to pay for food, utilities, clothes and essentials, without panicking at 3am that you’re going to have to choose between new shoes for your kid, and your prescription.

That’s where.

They can do that by raising wages, capping rents or childcare fees- I don’t give a shit how they do it- but the system is not working for a huge swathe of people, for reasons entirely out of their control.

@Ylvamoon

Not all of us have jobs with career progression. I could work full time in my current role and be financially worse of and still have zero career progression at the end of it

While I fully agree with this, I also think career progression and better job prospects are linked to your employment history.

Nobody just walks into a 40k + job without any workplace experience.
Most of us have to work from the bottom up on low wages. Changing jobs on the way.
I look at myself: 5 years ago I had a good job, WFH 3-4 days/ week. Company was 5min up the road and extremely well paid. Before I worked in similar jobs for a lot less. Thanks to Brexit & covid, this job and the company I worked for are gone. Once again I find myself near the bottom of the pile in a mediocre job. Trying to make my mark with a new employer.

Nothing is guaranteed, but not taking a job because it has zero career progression and thinking that UC is picking up the pieces forever is false economy.

I have to agree with this.

I earn just under 50k now. I've been a single mum for most of my daughter's life (she's now 14; I only met my current partner 6 years ago). I had to work my arse off in lower paid roles for the best part of a decade (roles that were seemingly going nowhere), and stay focussed on the bigger picture, to be where I am now.

@MiddlesexGirl

PP talking about a basic subsistence level of benefit for all should look at Universal Basic Income.

Allowing pensions to be built up whilst on benefits is good because it means less reliance on the state in the form of pension credit and housing benefit when the claimant reaches state retirement age.

Agreed on UBI because some form of it is inevitable. Once capital holders have reached the end game by automating everything and captured all assets, there's no alternative

The 'great reset' and its disturbing 'you'll own nothing and be happy' darkly alludes to that.

@Ylvamoon

As an aside- where do you think the line of state responsibility was during the financial crisis? Banks and bankers were “subsidised” and dug out of the shit in a way the ordinary folk most definitely would and will never be- and that WAS something that can be squarely blamed on people being reckless with money and making poor decisions.

They’re called “hedge fund managers” and incidentally, one of them, right at the heart of it all, was none other than Rishi Sunak.

So don’t lecture me about “taking responsibility” when the state is profoundly fucking irresponsible, in structure, ideology and personnel.

[quote UhtredRagnarson]@TulisaIsBrill I just want to thank you for all your posts on this thread, some of which have been very informative. and I think you should do a financial advice AMA [/quote]
No worries

I think the majority of people would be absolutely horrified by a financial AMA with me. It would end up sounding like I'm advocating every individual to act like Mossack Fonseca, and drive straight through every loophole imaginable.

The folks who actually think that any government actually gives a shit about our tax receipts (they don't - they'll just borrow from the central bank anyway and funnel it to whichever corporate interests lobby hard enough) would be spitting feathers!!

Maybe then we should!