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?

You will always bring in more working more hours but when you are used to receiving a certain amount with working many hours for it, the incremental increase income for those extra hours isnt huge and many people prefer to have more time and less money.

The reality is that uc is also a gateway to other benefits. If she increases her salary she looses her uc at 63p in the £ which is fair enough, still better off BUT things like free school meals, prescriptions/dentistry (for adults), council tax support etc have a cliff edge and you simply get nothing meaning earning literally £10 more can make you £150 a month worse off and that's without considering childcare. Once kids hit 12 (I think) the situation changes because you are expected to seek full time work and can be sanctioned for not trying.

@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.

Not with small children in childcare, and commuting costs, and risk to your job if they get sick or school is closed and you have to cover anything. I'm on a good salary (well, redundant right now, but usually), and even so it is horrible to realise how much flows out once you are working

Anyway, some savvy posters on around 35-50k might have joined the dots by now as to how they too can get in on the act Coughdyor on salary sacrificecough

The government and banks have caused it. Look at that budget - 5% mortgages again - 'great' because increasing easy credit will solve inflated prices. Let's enrich the shareholders of then housebuilders. And 1% payrise for NHS.

Sod em, get on the gravy train. You can take my taxes on 150k and enjoy it until the system collapses - I want to see their actions have a reckoning.

@TulisaIsBrill do you mind sharing what area you are working in to be on that salary?

and can I come work for you?

[quote PearlescentIridescent]@TulisaIsBrill do you mind sharing what area you are working in to be on that salary?

and can I come work for you?

[/quote]
I'm a very overpaid engineer.

(And my job is highly maths based )

@TulisaIsBrill Wow, I don't think there's a job I could be worse at than that!

@Pumpkinstace unfortunately many low paid people with DC do find themselves in that position. Well it's not unfortunate at the time because it's lovely to fit work around their little lives and be home lots. But everyone should be concerned about how hard it is for the majority to meet the cost if living in the UK and particularly about how hard it is to own your own home in some areas (like the bastarding SE where I am)

Bee0fSpring1 Fri 05-Mar-21 13:42:31
Child benefit will stop at some point

Everyone needs 35 years National Insurance contributions to receive a full state pension

If your friend continues to work part time, she needs to take this into account for her retirement

About 50% of State pensioners DON'T have a full N.I. record - instead they receive Pension Credit to take them up (almost) to the amount of a full State pension (though P.C. is means-tested). So not having a complete N.I. record doesn't impact the post-retirement income of most people, unless they/their partner have other income/substantial savings.

Also you get ni credits if you work part time as long as you're

• over the threshold
• have a child or
• elect to pay.

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

You have to understand that there are plenty of people who are happy to have a little less and not have to work very much. That's not bashing people on benefits, it is and always has been the truth. I grew up amongst people who thought so, I still know plenty of them. My sister, my cousins, lots of people I went to school with, they're happy on what they have in the main (and those that aren't work mainly under the table to gain more without losing what they have).

I imagine I'll get flamed for saying it but it's true in my experience.

@CuriousaboutSamphire

Totally agree. I’ve said numerous times to my work coach that I’m one of the luckier ones. Every time they’ve fucked up my childcare payment, I’ve been able to beg or borrow
from friends or use a credit card (so far). Not everyone’s as lucky as me. And I earn a really decent salary. It’s STILL not enough to cover rent, bills and the £550pcm of childcare I pay for 4 days a week - that’s WITH 30 free hours factored in. I keep my boy home and wfh/leave him with a family member on Fridays so that I can keep costs lower.

And then I thank god my employer is flexible.
Thank god I have family. Thank god I have a desk job.

But I shouldn’t have to thank anyone- let alone a god I don’t believe in- for these things. I should be able to live on my good salary, and thank myself for a job well done. But because govt have structured early years the way they have ... nothing I do, short of doubling my salary again... will be enough.

I feel for the mums in worse positions than mine, very acutely. I grew up in that household. I know how it is.

@UhtredRagnarson

Thank you. We’ll be okay - he starts school I. September, and that feels like we’ve achieved something- we’ve survived the hard bit!

@UhtredRagnarson

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

If she has limited capability for work for health reasons, is a single parent, or doesn't claim housing costs, she'll get the higher work allowance, which is £512 a month.

Sixteen hours pw @ min wage comes to nearly that.

Also, if she earns over £120 a week, she'll start to lose 12% of any extra in national insurance.

If she earned £100 a month over £120 pw, she'd lose £12 NI, and 63% of the £88 (approx £55) that's left would be deducted from her UC. She'd only get to keep £33 of the extra £100.

On NMW, she'd have to work an extra 12 hours to earn £100. I wouldn't work 12 hours to earn an extra £33, the net gain works out at less than £3 ph.

If NI thresholds had kept pace with tax allowances, and the taper rate for UC was variable, the marginal gains would be greater and more people would be prepared to work more hours.

You have to understand that there are plenty of people who are happy to have a little less and not have to work very much. That's not bashing people on benefits, it is and always has been the truth.

This is true. My brother in law and his relatives are like this. They are kind, nice people. But they have few material desires, are happy to rent, and would rather work fewer hours on a low wage with a benefits top up, than work more and be a little better off.

No one is criticising this, its human nature, it's just difficult as to ensure we protect those who need it, we also by default enable people to take this choice, and that's hard for people to accept when the government is short of money for other areas.

...and yet some posters are still horrified by the idea that someone on benefits might try and save toward a deposit and be sad that they are limited by the capital cap in being able to do so.

Yes and rightly so , its called benefits for a reason , its to help out with living not help to save
No issue with someone being able to save a couple thousand as back up for things going wrong and hence the threshold is £6000
But you can't have people saying in one breath uc is poorly paid and in another saying people should be able to save over £6000 or for a deposit for a house
Many many people can not save a deposit, i myself am one of them .
Even when both of us are working we struggle with saving a deposit as have to run to cars to work, commute time , childcare costs previously etc etc
So no I don't think people on uc should be able to save over £6000 .
If they can then they don't need it in the first place
Prior to covid i think we had more people going back to work than ever before so some part if it must work

You have to understand that there are plenty of people who are happy to have a little less and not have to work very much. That's not bashing people on benefits, it is and always has been the truth.
Yes your right I know several like this and also some who are happy to stay on benefits as there parents were and now they are etc etc
People who say this never happens don't live in the real world and prob live in a nice mc street and not on a council estate like myself where there are all sorts of people.
Some happy on benefits with no plan to cone off , some struggling , some doing best to come off and many not on any benefits at all.

@DogsAreShit to answer your question about when I was a lone parent I worked full time and didn’t claim benefits at all. Your insinuation that I didn’t work at all is insulting to single mothers as if being a single mother automatically means you are claiming benefits.

If people were allowed to save for a house deposit only ( would t be difficult for the government to implement a UC ISA) then it would save tax payers millions paying rent in the future.

You have to understand that there are plenty of people who are happy to have a little less and not have to work very much. That's not bashing people on benefits, it is and always has been the truth.

While I don't doubt there are people like that, there are also people like me that are not.
It is a trap, but that only becomes apparent when you try and lift yourself out of it.
It might appear from the outside that I'm happy to be 'trapped' because my circumstances have changed very little during the 26 years since I had my first job, it may appear that I've done nothing, not worked hard enough or been proactive enough in changing my circumstances, because they haven't changed. But I have.

I've never been out of work for more than a couple of weeks since I was 15. I could go back to any of the employers that I've worked for (all things being equal) judging by their respective references and them telling me that in person. I've been promoted in quite a few of them too, studied (sometimes at my own cost) applied myself and worked hard. The difference is that I've worked hard in the jobs that were open to me, hospitality, care and a brief foray into retail, they are just not considered worth paying a lot for. I've been turned down for jobs recently because I was applying for 'entry level' (junior care, bar staff, shop assistant) because they thought I wouldn't be happy in the role because of the experience and qualifications I've got. The next step up (management roles, team leader, etc) I got no joy from because I had work based experience and qualifications, not a levels or a degree.
And here I am, at 41, back in a minimum wage job, because it's all I could get. I'm lucky that the employer I work for saw themselves as getting bargain rather than a burden. Doesn't help me out of this trap though does it.
I can't afford to give up work and go to university, or even college, I'm stuck with on the job training.
I'm relatively happy where I am, it's a nice place to work, decent employers and it pays some of the bills.
I've tried time and again to lift myself out of this, to get myself above the threshold for tax credits, but it's nigh on impossible without a lot of luck.
And by luck I don't mean someone handing it to me, I mean both mental and physical health staying good (both of mine have taken a hit in the last 25 years more than once) I mean luck like having an LL that doesn't sell 6 months in meaning you have to move, and as you can't afford anything available near you, moving further away and it not being feasible to keep the job you're doing well at. I mean luck like the CMS actually squeezing money out of people like my ex who walk away from their responsibility, instead of just letting it go.
So yeah, to some it might seem like I'm happy to have less, because I earn less, I'm not I've got no choice. Being miserable about it will solve nothing, though I suspect that some people on this thread think I should be and that would give them satisfaction.
At the moment I'm taking stock, it's been a very hard year with trying to survive on furlough, then being made redundant, then knowingly going into a job where I'm at higher risk of covid and could find myself in a position where I've been the person who's unwittingly carried it in to numerous vulnerable people.
That doesn't mean I'm happy to be trapped.

Im unsure about UC but it's like this on tax credits.

And that's not a woe is me comment btw, it's how my life has panned out and just how things are.
It is so disheartening to read that you're just labelled lazy, what's lazy is tarring everyone with the same brush and refusing to see the things that run through every layer of society that keep people like me where I am. At the bottom.

It is so disheartening to read that you're just labelled lazy, what's lazy is tarring everyone with the same brush and refusing to see the things that run through every layer of society that keep people like me where I am. At the bottom

I don't think anyone said you are lazy. They said some people on benefits are lay, and some are, but nobody said all are

Nothing like going to the extremes! The disgrace is the clear fact that it can pay people not to work because we, taxpayers, will prop them up and hand-wringers will defend them. It's nothing new though, as long as there's been a state-funded safety net there have been those who abuse it. I recall my mother talking about her neighbour whose 2 adult children lived with her in her subsidised council house, they both owned a house that they let out

People on benefits pay taxes, too, if they're in work and earn over £120 pw (NI is just a tax by another name). Even people who aren't in work pay tax every time they buy something that's not an essential food item or children's clothes. That still leaves an awful lot of essential purchases.

And council houses haven't been subsidised since the late 1980s, Thatcher made it illegal for councils to subsidise rents and all councils had to ring fence their housing revenue accounts. Prior to that, some councils (notably Tory ones) didn't subsidise their housing anyway.

And I'm another one who doesn't get why it's ok to save for a pension if you're on benefits but not to save for a house deposit.

People who save a deposit and buy their own homes will not be entitled to benefits to cover their mortgages if they lose their jobs or become too unwell to work, so will still be reducing their burden on the public purse. And they are at least saving out of taxed income.

The people who are putting money into their pensions to maximise their benefit entitlement are getting tax relief on the money they save, so getting double bubble from the public purse.

Three reasons why I think pensions are allowed but not houses - I'm not saying it's right, but here's my guess as the rationale.

• much of the the UK is obsessed with housing, but thinks pensions are a scam. This I find hilarious because a defined contribution fund is completely within your control and is much less rigged than housing. But basically - people ignore pensions so they know there are very few people who would pay more into a pension anyway.

• pensions are deferred taxation on income. You pay in gross, but when you take it out - it's at your marginal tax rate. Now, that might well be advantageous if you're savvy - you have an annual personal allowance after all.....but again, the headline would be 'deferred taxation'

• Thirdly - as someone else mentioned a fat pension fund will be means tested later. And given most people hardly even think of their pension, many will be on benefits later. Those people who decided to stuff theirs won't.

@MyDcAreMarvel

If people were allowed to save for a house deposit only ( would t be difficult for the government to implement a UC ISA) then it would save tax payers millions paying rent in the future.

I agree. I bought a house last year, I was getting working tax credits plus housing benefit when I was in rented. Now I just get working tax credits.

Before anyone starts on about me affording to save for a house deposit when I get top up benefits, I get a lot of child maintenance from my ex and that's how I afforded it.