Universal credit Vs tax credits

[sharonJJ55]

What's everyone's experience of moving from working tax credits to universal credit? Did you end up with more monthly?

Yes. Moved from tax credits in January. Dh earns more wages by around £200 a month (he had a different job when we were on tax credits) and we still get more on UC even with his higher wage.

We do get quite a few elements though as ds has a disability / I get the carers element etc.

I've only been on UC but I know people who are on tax credits and UC seems to work a lot better for working parents. It all depends on your savings though because there is no savings threshold for tax credits.
The help towards childcare is higher(70% on wtc but 85% with UC) and as the data is reviewed every month you aren't subject to surprise overpayment deductions.
Tax credits asks you to work out pay for the year and average it out, UC gets the information directly from HMRC so you'll get the amount you are entitled to based on your earnings.

Interested in this too.. would also like to know more x

We preferred monthly as our income is irregular. We ended up owinv tax credits as although we'd had v little income for the first half of the year then ny husband got a good job but the income was worked put retrospectively!!!!

At least with UC it is done on that month.

There used to be people who could work out if you were "better off". A better off calculation or soemthing? But cant remember if that was CAB or job centre or where...

If you have the choice Tax Credits are the better of the two because of the way income and savings are treated. Very few people are better off on UC, the 5 week wait for starters knocks a hole in your income, savings are ignored on tax credits, maternity allowance is ignored, £100 a week of SMP is ignored. UC is particularly harsh on women on maternity and returning to work.

If your pay cycle is anything but monthly you get less UC, the benefit cap is applied on actual income rather than hours worked, that is devastating for some families. If you are on the sick you are worse off on UC as working tax credits will continue for 26 weeks, on UC there are many people who lose the work allowance when on the sick. If you get back pay UC count it, Tax credits allow you £2500 before they start to count it.

The taper for tax credits is less too and the only reason they pay more childcare is to make it look more generous. You also have to pay your childcare in advance on UC.

There are more reasons but that’s off the top of my head.

There are a couple of things where UC scores points over Tax Credits but few and far between and overall it’s not as generous. Otherwise the government would not have introduced UC.

I'm better on UC but my salary/pay dates are static as are my childcare costs so my payments have always been accurate and timely.

I much prefer it as every year at TC renewal there was an anomaly - sometimes in my favour, sometimes not - despite having a similar salary/childcare arrangement.

Have a look at a benefit calculator such as Entitled to. However note that the standard allowance - the amount for you or you and partner is £20 per week high on universal credit now the entitled to calculation does tell you the difference at the end. Universal credit is paid monthly and calculated monthly. If you apply today the assessmr would be 8th -7th next month. The change is for assessment periods ending on or after 6 October.

If you are better off claim by 6 September so that you get one month at the higher amount.

Light reading universal credit regs
www.legislation.gov.uk/uksi/2021/313/pdfs/uksi_20210313_en.pdf

There is more to UC than the bottom line though, depending on your personal circumstances.

And you need to put the right info in, for example if you get paid weekly you would need to do separate calculations for when you are paid 5 times in one month or worse 2 times in one month if your paid 4 weekly.

@L1ttleSeahorse makes a good point about tax credits though. This happened to a friend they had a small amount of tax credits each month and her husband got a pay rise, he didn’t tell her how big that actually was though and at the end of the year she had to pay it back.

Worse was a single parent who had a really good job and then had to go part time, she had already earned too much and couldn’t qualify, that was pre UC days and she was pretty desperate for money.

Benefits are a minefield.

Universal credit essentials has a accurate calculator to work it all out. We hundreds better off on universal credit and we both work

A better off calculation meant I would be significantly worse off on UC. I dont understand how it works really as I have seen couples earn more than me and still get more UC than I would get. For this reason I had no reason but to stick with TC.

I'm finding it really difficult to live at the moment financially I am getting myself back out there looking for a better paid, satisfying job. A role has been presented to me which to be honest sounds fantastic, and what I used to do before becoming a Mom. This should sound fantastic however because of how TC is done on an annual basis I cant see how I will be better off moving part way through the year. The salary increase is likely to mean I am just out of being eligible for tax credits, in which case will mean everything I have been paid so far will be classed as an overpayment (I've worked it out). So despite getting a better salary, monthly I will actually end up with less each month and with a TC debt. The worry of ending up with an overpayment is giving me anxiety. As whilst I've been receiving TC payments, I've needed them. Its meant I've been able to feed us. We have spent 7 years living hand to mouth. I feel so under the poverty line it's unreal! So knowing I am likely to have an overpayment for simply bettering myself is pretty upsetting.

So I really like the fact that UC is based on real time figures. However it's significantly less income for me so I chose to stay on TC and am now in the predicament I am in.

Are you sure it’s less? There is a universal credit essentials Facebook group and the admin can help you work it out. We only ever got £20 a week tax credits. No rent help. So universal credit is very generous for us

TC vs UC works differently for different people. Some get more TC, others more UC.

I think the intention with UC is that it is harder to work fewer hours and get a significant top up like with TC that makes it hardly worth working more than 16 hours a week unless you earn significantly more than NMW.

Yes significantly less. I've even used the essentials calculator. UC is only a third of what I get in tax credits. Its a huge drop. Im in mortgaged though so maybe that's why. But I was shocked at how big the difference was

Maybe, but I do 30 hours a week and I don't feel TC is overly generous for me. Maybe that's because of how many hours I do

However it is generous when compared to the same circumstances under UC