Universal Credit - surely, we're not eligible?

[fr4zzledmum]

As me and DH are starting to think about TTC for number 2, we've obviously been considering finances, in particular because I may potentially drop a day at work.

I've just been having a play around with the Entitled To calendar (as found on the gov.uk website), basing it on our full time pay, £10k savings (optimistic overestimate) but with two children. It states that we'd potentially be eligible for Universal Credit for £128.08 per week, £555.05 a month.

Surely not?! Have I done something wrong?

What’s the full time wage for you and DH?

Possibly. It largely depends on whether you have rent and childcare costs to pay.

Unless your rent is high I think you may have done it wrong.

£1800ish per month for me and £1500ish per month for DH - both before tax.

We own our home (mortgage) and yes, I did input childcare costs - around £190 a week.

The childcare costs are likely to be why then.

Yeah I noticed that but definitely UC.

Rough/ready cross check with QBC (professional tool) gives similar numbers.

As @Babyroobs said childcare and/or rent can add UC to what, on face, look reasonable salaries.

I thought you couldn't claim UC if you're homeowners as they'd effectively be paying your mortgage off for you but I could be wrong...

There's no direct help for owner/occupier mortgages though if it's your landlord's BTL loan that's fine....

There was a section on the calculator regarding the portion of UC allocated for housing costs. For homeowners, this is a loan - for that part I didn't complete.

Help with housing on UC is only one element of it, so whilst they won't pay directly towards a mortgage you can still qualify and people with kids who have a mortgage rather than rent will benefit by getting a higher work allowance which means that a higher proportion of their earnings are completely disregarded before wages reduce their Uc total. UC actually is pretty generous for working people with kids.

This refers to support for mortgage interest which very few people qualify for. It won't apply to the vast majority of homeowners particularly working ones.

Of course you can. Most people on UC are hard workers, many with their own homes and professional jobs.

Yes I agree UC is generous if parents work and have kids especially if paying high rents or childcare or just childcare but for single people with no kids including young care leavers with no family backing very very mean.

Access to SMI is not quite as restrictive as it was - wait period reduced etc - but bottom line is you're using loan (b) to pay off loan (a).

Just apply and see what happens OP. It's not like it shows on credit records or anything. Sounds to me like you may qualify for help with childcare costs as you're on average salaries.

I'd apply if I were you. But savings over £6k will be taken into account. I guess this is already in your calculation.

It would make sense for the government to act to reduce rents and childcare costs (therefore reducing their own bills) but that doesn't seem to be happening!

DH and I are on similar salaries while we were private renting and we were eligible for a similar amount of UC due to high rent and childcare costs we had 15K in savings (so we had an amount deducted).

UC enabled us to not have to use our savings and keep our heads above water. Eventually, we were able to buy a shared ownership property. We are not eligible for UC anymore as our rent and childcare is a lot lower now but you can still claim if you own a property due to the other elements aside from housing...mainly childcare costs.

I would apply, I found the experience of UC fairly straightforward. If you are working they generally leave you alone and you don't need to attend job centre appointments compared to someone who is out of work etc

If you live in a part of the country where rents are high, say an Outer London Borough, then it's possible to be both a recipient of UC and a Higher rate Taxpayer.

You’re don’t earn a lot, why wouldn’t you be?

The government taketh away and the government giveth.

I do think that if, like most other western countries, we had better, subsidised, childcare. More social housing rather than subsidising private rents. Tax credit/ additional tax allowance per child then the majority of working claimants could come off UC.

I work full time and claim UC. The amount of tax/ NI I pay is pretty much equal to the amount of UC I get and my childcare bill. It just seems a bit convoluted.

I would apply though Op people are often entitled to help with childcare/ rental costs even when they take home decent money.