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?

Why do people think That you shouldn't be Adjusted if you have 6 k in savings, uc is a benefit its there to help top up to live not to Save
Its like people who say they can't work as they have kids , you can but you have to pay for childcare but often you get help with this if poorly Paid .
There has always got to be a cut off though and if your close to this then yes its not great, but people would be up in arms if someone on uc suddenly got a huge wage increase but got to keep all their benefits
I think its a better system, apart from the 5 week wait for first payment and whilst I get why they wait so they can see reflection , a one off payment may be the way to go here .

[quote mumwon]@UhtredRagnarson
except if you have childcare & you pay for longer hours than you work or fort transport[/quote]
Yes I know. I was talking about income being higher. I know outgoings will also be higher in many circumstances. I’ve run the numbers myself so many times. Realistically my most logical option financially would be to work 7.5 hours a week.

@TeachesOfPeaches absolutely and that's only even affordable because of housing benefit which also is cut when DC are grown. You could spend 20 years being okay and then suddenly being in a complete shit show with much more limited options. Scary

The problem is that it really is a trap. To achieve escape velocity if you're a renter with a brood of kids - this is no joke - I think it's not worth trying to improve your income unless you are certain you can get to above 75k!! Maybe then you can actually get to a point of a tangibly better quality of life in accordance to your means. I know people will roll their eyes at that, and be appalled, but seriously, get a spreadsheet out and study how it all works.

With tapers and tax rates, if you really analyze the way the system works it's a huge eye opener.

When I worked in retail I was forced to cover overtime for people that refused to work over 16 hours because it would affect their UC.

No sorry, you were working to cover the hours for your employer because they wouldn’t hire extra staff. You weren’t covering extra hours for colleagues.

Also we had a huge overpayment on wtc when my dh changed jobs halfway through year to better paid, we told them before he started even and because it was better paid we ended up with a £1000 overpayment , the reality is when we were receiving the wtc we desperately needed that money to live , once he was in a better wage we didn't . But as they look at the yearly income rather than month to month like uc, we ended up with a huge bill.
We also had the dilemma where i worked part time and it wasn't worth me picking up more hrs as we lost it all in wtc and childcare and actually would of been slightly worse off , this has always been the case.
So many people I know had overpayments on wtc through no fault if there own

@donewithitalltodayandxmas

Why do people think That you shouldn't be Adjusted if you have 6 k in savings, uc is a benefit its there to help top up to live not to Save Its like people who say they can't work as they have kids , you can but you have to pay for childcare but often you get help with this if poorly Paid . There has always got to be a cut off though and if your close to this then yes its not great, but people would be up in arms if someone on uc suddenly got a huge wage increase but got to keep all their benefits I think its a better system, apart from the 5 week wait for first payment and whilst I get why they wait so they can see reflection , a one off payment may be the way to go here .

Because 6k is, excuse the language, fuck all in the context of buying a house thanks to the other problem - house price inflation. Punishing people by reducing their income for trying to save to escape isn't going to help social mobility and adds to the disenfranchisement.

It's by design.

@donewithitalltodayandxmas

Also we had a huge overpayment on wtc when my dh changed jobs halfway through year to better paid, we told them before he started even and because it was better paid we ended up with a £1000 overpayment , the reality is when we were receiving the wtc we desperately needed that money to live , once he was in a better wage we didn't . But as they look at the yearly income rather than month to month like uc, we ended up with a huge bill. We also had the dilemma where i worked part time and it wasn't worth me picking up more hrs as we lost it all in wtc and childcare and actually would of been slightly worse off , this has always been the case. So many people I know had overpayments on wtc through no fault if there own

Totally avoidable by putting the excess into the pension.

@TulisaIsBrill that's interesting, perhaps it's regional or depends on circumstances.

I've worked out that I need to earn around £32k to comfortably live and cover all of my costs with a reasonable amount of disposable income and being able to afford all rent and bills and even save a little. But, I don't need to consider childcare costs and I also don't drive and I have HA property so although where I live rent is very expensive the cost of that is negated somewhat.

I'm currently earning well below that due to being part time and I do worry about how to make the jump to that level of income - as in I worry about the intermittent years.

I think it really is those in between periods that cause the most difficulty. We need to do better with getting women into careers they can progress in even as mothers.

It's not UC to consider.
People on UC qualify for free prescriptions, dental, etc I believe. Plus some other benefits.
Once you loose those, if you are not earning a much higher amount on UC, you are worse off.

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

Err...off the top of my head- better chance of progressing in your job, earning more year on year, decent pension, having more money, being able to get a mortgage, self reliance,not having to see work coaches? Not having the pharmacist sneer at you when you present your tax credits exemption card!
I worked part time with top ups as a lone parent for years. I was poor. After starting full time on a fairly low wage my income increased by 15 k in a few years and I have an ok pension now. Are people really jealous of single mums on benefits? Fuck me.

@TulisaIsBrill but if you have a brood of kids rather than just a couple it will always be expensive and that is something people should take in to account
Having 5 or 6 is out if most peoples affordability and hence why most of us don't do it
I would of loved 3 , we had 2 as thats all we could reasonably afford and at times we have still ha to rely on wtc or uc top ups but with 2 kids thats been doable , with more it would of been harder
And as we are not high earners or likely to be due to professions/ qualifications etc it something we had to think of when we had kids and realistic

@TulisaIsBrill we didn't have a pension to do that? When you start a job then you don't qualify to be in there pension straight away .
So no not possible at all and also they still looked at the annual income and when the credits stopped because he earnt a better job we needed that money to eat

@donewithitalltodayandxmas - even two kids is enough to quite for quite a chunk, and this make the taper rates go quite high.

The difference between two families with two kids each, who rent where one earns a low income and a medium one is not very much net once the lower paid one gets UC. Which is all good - but again, it's a real world example of why people don't bother with earning more once they've worked that out.

[quote donewithitalltodayandxmas]@TulisaIsBrill we didn't have a pension to do that? When you start a job then you don't qualify to be in there pension straight away .
So no not possible at all and also they still looked at the annual income and when the credits stopped because he earnt a better job we needed that money to eat [/quote]
Anyone can open a private pension and use that!

@TulisaIsBrill but your receiving a benefit to help with living costs not to save
Plenty of people working with no right to uc etc can't save
The idea of the benefit is to top up so as you need help with day to day living not to help someone save .
Its benefits not a saving pot

@TulisaIsBrill well we and thousand if others don't and didn't know this
Seems a silly loophole for the goverment to of not closed
But like i said if we were getting £70 a week to help us live then my dh earns that £70 so our wtc stopped straight away but because we had already been paid the £1000 in previous benefits , how do i put that away
As I am not better if that £70 now in dh wages as opposed to tc , but we still need to eat

Because 6k is, excuse the language, fuck all in the context of buying a house thanks to the other problem - house price inflation. Punishing people by reducing their income for trying to save to escape isn't going to help social mobility and adds to the disenfranchisement.

It's by design.

This.

I get £438 per month from UC towards my rent. If I can’t save whilst on UC I can never get a mortgage. Never. So that £438 per month is a continuing cost to the government of housing me. Whereas if I am allowed to save a deposit for a mortgage the government will then be saving that £438 per month. Does that not make sense?

I would very happily accept my savings being ringfenced and locked in like the help to buy ISA scheme if UC would allow such a system. They won’t.

[quote donewithitalltodayandxmas]@TulisaIsBrill well we and thousand if others don't and didn't know this
Seems a silly loophole for the goverment to of not closed
But like i said if we were getting £70 a week to help us live then my dh earns that £70 so our wtc stopped straight away but because we had already been paid the £1000 in previous benefits , how do i put that away
As I am not better if that £70 now in dh wages as opposed to tc , but we still need to eat[/quote]
Loophole or not, the info is there in black and white on the form you get each year, and online.

If a few minutes of reading the form can save you hundreds, maybe thousands in overpayments - do it

£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
This was my situation. I earned £30k but at the time, you could get the interests on your mortgage paid and interest rates were much higher. On £30k, I was it entitled to £50 a month tax credits yet paid £400 a month childcare (after-school and before school clubs) and more with school holidays.

So indeed, I calculated that I was it about £100 better off a month, no better off during school holidays, bit I still did it.

I dropped my kids off at 7:30, commuted for an hour and picked them up between 5:30 and 6pm depending on traffic.

Was it worth it! It didn't seem so at the time but looking back, best decision I made. I was promoted twice in the next 10 years and my earning went up significantly. I also did a Master's during that time.

As another poster mentioned, I contributed during my pension which means I'll be able to retire at 60 and maybe even earlier.

To be, that £100 extra was much much more than a small cash incentive. At the time, I did envy my friends who got to work only 16h, and had so much more energy than I and seemed to enjoy life much more. The roles are now significantly reversed, but likely for a much longer timeframe.

It was an investment and even though I missed out on some things, it certainly was worth it for where I am now.

Also to add, this lifestyle taught my kids to be resilient and used to long hours which as really helped them adjust to adult life and indeed working FT and long hours.

Oh and this 'loophole' exists for UC too. They debated in parliament and decided it was important to allow people to save for retirement. And so, why wouldn't anyone take advantage of this? You bet wealthy people take every advantage they can.

The working 16 hours a week thing isn't true on UC. Not from my experience anyway. They deduct anything you earn over £290 regardless of hours. And then deduct 63p per pound you earn over that.

@TulisaIsBrill

Oh and this 'loophole' exists for UC too. They debated in parliament and decided it was important to allow people to save for retirement. And so, why wouldn't anyone take advantage of this? You bet wealthy people take every advantage they can.

If they allow it to save for retirement they should allow it to save for housing.

@SnooperTrooper12345

The working 16 hours a week thing isn't true on UC. Not from my experience anyway. They deduct anything you earn over £290 regardless of hours. And then deduct 63p per pound you earn over that.

Depends. How UC works is they have a 'minimum income floor' that they expect you to earn, otherwise you'll be hassled. So yes, for someone working full time for minimum wage, you have less options.

But If you are earning, ooh more than minimum wage, then you can afford to drop your hours and see very little difference.

@UhtredRagnarson quite agree. If you choose to save to enter the mess that is the housing market - that should be ringfenced too. But personally, i wouldn't bother unless I was a high earner. But I would stuff my pension regardless.