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?

@DogsAreShit
Sorry 1 more question.
On entitled to it asks for monthly wage before tax and ni - I don't normally earn enough to pay tax or ni
Then next box is pension contributions

So in the monthly wage do I put for example £900
Then £100 into pension box

Or do I put the monthly wage with the pension already taken out so it's lower?

Also, there's two ways to look at investment...and it's a funny old paradox.

When you're young, taking more risk seems a good idea - because you have time on your side to make amends. But you generally don't have the capital to take much risk.

When you're a bit older, you may be in the very fortunate position where you've accrued a wedge that allows you to take risks in nominal terms that you would never have been able to when you were young.

When I was in my early twenties and had say 20k saved it would have been insane for me to buy £10k of gold on a whim because I think the price may go up. Or crypto or anything.

Now, 10k is a very small percentage of what I'm worth, so I can take that risk without batting an eyelid.

And this is why there is such a horrible trap in the system. The risk is massively exacerbated with that savings taper that removes the incentive because your income goes down. It's horrible.

@MondeoFan gosh I don't know the answer to that one. I don't know the implications of not paying NI. Try putting the number in and see what happens but I think it would be really helpful for you to talk to a welfare benefits specialist at either the council or the CAB. And do talk to them, because if you can do this you'll be so much better off in the future.

[quote MondeoFan]@DogsAreShit
Sorry 1 more question.
On entitled to it asks for monthly wage before tax and ni - I don't normally earn enough to pay tax or ni
Then next box is pension contributions

So in the monthly wage do I put for example £900
Then £100 into pension box

Or do I put the monthly wage with the pension already taken out so it's lower? [/quote]
You put in your total monthly wage including the pension contributions. It works it out for you on the next page.

Top and bottom of it is-
if the living wage was actually enough to live on, I'd not need top ups.
If my child's father paid what he was supposed to, I wouldn't need top ups. Though why would he when it's so much easier to walk away, safe in the knowledge he'll be a hero for looking after his own child once a fortnight, and I'll get battered by society, the press, the government and people like you for his choice?
If the cost of living wasn't so high I'd be able to manage on my pittance.

^well said 👏🏾👏🏾👏🏾

@Waxonwaxoff0
Thank you

@Cassimin

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.

I feel the same. I think it is unfair that because you are on your own you've got to do two people's roles/work, which is that usually you both might work and share child/home duties. Or one at home one at work. There is only so much one person can do, and I don't feel bad that when my DC goes in to day care that I might get a few hours to myself.

@beentheretoo It's only up until age 5 apparently and then I was told you are expected to earn the equivalent of a 35hr job on minimum wage, if that makes any sense.
Obviously it's different to years ago before UC. But now it's a work based benefit, where to stay on it you need to work, meaning they don't have to pay you as much.
Oh lol the incentive to work, we are supposed to want to do that without any encouragement. And it's a lovely thought. But when my monthly rent is more than what I earnt full time in a respectable job where by you even need to be registered to do that job, it doesn't give me much incentive!
Adding on the fact that you need to drop hours or do P/T if you can find something that fits in, to go and collect children from school, but apparently we are supposed to get wrap around care, so that the children can be picked up later, I was told up until 6pm, so I would like to go back to the Health Visitor who told me my child should be in bed at 7.30pm, and ask how is that possible with those work/childcare hours?!

@womaninatightspot

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.

Apparently not, as they 'say' they will pay 85% of your costs, but you have to be set up in work first etc to show proof of employer etc, so where do they expect you to be paying it all from in the interim. And the point is not that one shouldn't of had kids/thought about it etc beforehand. Things shouldn't be so hard it expensive!

@Theunamedcat

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

Exactly! They make it sound good, I will not do it unless it's made simpler.

[quote beentheretoo]@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.[/quote]
Well it was Cameron who said he wanted 'work to work' to make it worth going to work, it looks like that failed then!

@Notglam

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.

If you have only one child of say nursery age it doesn't sound so bad, as if you work full time, you will get 30 free hours, so that only leaves 5 hours to cover, if only work/life balance worked out that well. And UC say they will pay 85% of childcare costs, but I hear it's painful getting it back!

@Pumpkinstace

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.

I couldn't get a flat anywhere in London on 25k. They ask for proof of 35k every landlord/agent I have had contact with and that was constantly throughout last year.

@Redruby2020 you get your Childcare costs back but you have to pay them first from your own money I’m shocked at this rule and I cannot seem to get my head around it. Around 4 weeks later you do get the money back no issues usually.

@Doyoumind

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.

Paying rent is a luxury now, I couldn't do it in full time work with or without a child how ridiculous is that!

@slashlover

I'm working and on UC, have no kids and buy a weekly bus pass anyway so I take any overtime I can get and my wage varies. I just had a look at my spreadsheet and for working 29 extra hours per month, my monthly income went up by £98.

Apparently you can get reductions on your travel?

@Countrygirl2021

I can't believe that we have a system where a working age adult can just decide to work part time and expect the tax payer to foot the bill for the rest of her outgoings I would love to work 2 days a week but couldn't pay my mortgage if I did.

But everyone can't do the same jobs or be in the same situation. I don't know where you live to have a mortgage, also not sure if you are on your own or not. I could work all the hours in the job I was in for more years than I care to remember, and would still be unable to pay my rent, never mind a mortgage. Can't reduce the size of my accommodation, so that's not the answer. It's lovely having pride and thinking of maybe the longer term outcome of working where you can't pay to live. But pride won't pay the bills. Why should someone slog their guts out and end up with nothing? And by working and claiming, you are not just claiming then, as many were years ago. I went to school with the kids whose parents were all sat at home on Income Support doing sweet FA all day! Times have moved on and it was a way of getting everyone to do a little bit of work at least!

@Countrygirl2021

*Actually, especially given the way housing costs work in the UK, I think it's a statistical inevitability that a proportion of the population will never be able to earn enough to sustain a minimal standard of living. It's not an option to tell people they can't have children because they don't earn enough, so it's up to us (the people who think that standard of living must be achieved) to supply the cash that makes up the difference.*

I don't necessarily disagree but you should be working more than 2 days a week. There is a difference between working as hard as you can but there being a shortfall because you work in a minimum wage job, verses just opting out of work.

And no, I'm not lucky to have a mortgage. I have one because of ridiculous hard work and postponing having children until I was secure.

Woo bully for you, you've got it all sorted out then fantastic!

@usedandabusedx1000

Some of the attitudes on here are appalling not to mention short sites.

There are so many possible factors when it comes to this situation! My own for example, ex cheated, repeatedly, and was emotionally abusive - MN consensus on this would be to get out, I did. Said abusive ex, dragged me through the court systems for the best part of 3 years, the end result of this???? 50/50 contact. One week on, one week off. So now I need to find a job that is during school hours (all kids go to different schools as well to add insult to injury, school runs are fun) or an evening job (meaning I literally never see my children) and put the kids in childcare, or a job that is one week on/one week off (good luck with that) I personally feel I have been put into an impossible position, I have nothing to offer the working world, I will be on a minimum wage job, I have no prospects or worthwhile qualifications, I could work every evening and only “gain” £30 on top of UC, which will potentially get lost in travel expenses/childcare expenses/more trips to court when my ex asks what the hell is the point in my kids even being here???? £30 a week to NEVER see your kids???? Is it worth it? Does anybody truly believe that this is a choice I’m making????? I’d love to hear another solution

With you totally, some don't have a clue. I am only at the beginning of this journey and have to say having read things on this thread, am really not looking forward to it 🥲 I wasn't doing great before my DC, but worse off now, and all the things that flashed before me, when my abusive ex pushed a child on me, have come true, and then some. So I try to be optimistic but I know that is also a little naive too!

@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.

Would you say the same about someone choosing to work p/t because they were better off by keeping their earnings below the threshold at which student loan repayments start, @boltfromtheblueblue ?

A colleague did exactly that until her daughter qualified for free child care, because she ended up working for nothing if she worked f/t once she'd factored in child care and travel costs.

@JosieJarker

Yes the 6k savings cap is a bugger, not enough for a deposit which means I'll be stuck renting forever unless I meet someone who wants to buy with me. If you buy crypto does that count as savings? I could buy 1k and hold it until its worth a lot. Unless it's not going up much more.

Strictly speaking, I suppose you should declare it as savings, same as you should shares.

Feck knows how they'd ever find out about it though.

Even if you buy it anonymously, with cash from someone you know who had some they were willing to sell, and you immediately transfer it to a hardware wallet .... The problem will come when you attempt cash in, especially for a significant sum. If you were liable for capital gains tax say, HMRC would easily join the dots and say - 'hang on, you had assets over 6k'.

Against, I suppose you could repeat the process in reverse (find someone to sell to anonymously, for cash), but that would be both risky and not straightforward. And illegal.

To me, I find much more pleasure in finding legal ways to avoid tax than illegal ones. This thread has alluded to many. You'll sleep better at night too.

(the illegality being you had assets above 6k undeclared)

@JosieJarker I’m sorry I know this never goes down well. But if you have the ability and skill to save over 6k for a house deposit. You should go for it!

And before the pearl clutches come along and say 'how dare anyone avoid tax, especiay low incomes', let's go through a few of the ways middle and higher income people do it.

• earning between 50k-60k and losing child benefit? No brainer to stick it in the pension or sacrifice on cycle to worm. plenty do so.

• earning between 100-125k - same as above.

• Running a business? Incorporate, pay yourself minimum wage and take the rest as dividends. Make sure all expenses are claimed for an offset from revenue.

• And then we get to the bigger fish. Running a multinational retail coffee chain? Base yourself in Switzerland or Ireland, and charge a franchising free equivalent to the entirety of your UK revenue to the more favourable foreign base, where corp tax is lower.

Im not trying to avoid tax.
Im trying to think of ways of making enough money to buy a house.
I suppose if it went over 6k I would have to tell them and pay the taper.
But even 16k is not enough for a deposit in some areas.
Its a trap.