Need help understanding Universal Credit award

[Erber]

Hi, I filled out both entitled to and turn2us benefits calculators in April and both said we should be entitled to a small amount of UC although the amounts shown were different. Although we've both had pay rises this year because benefits were increased we should've been entitled. Previously we received tax credits although we both changed jobs in 2021 with higher salaries so we stopped being entitled and haven't received any money from tax credits since 2021. Our claim for tax credits 'officially' ended after 6 months of not being entitled to anything.

Since then the cost of living crisis has hit us hard as we're not high earners but earned slightly too much to qualify for benefits meaning we didn't get any help or cost of living payments that others got.

I opened a claim for universal credit in April. They calculated an award for us on 23rd May. I received a 5% performance bonus which was paid as a lump sum withmy salary in April. I told universal credit this would happen and the award calculated for April was £0 due to my bonus.

We received another award decision today. It is £0 again. I don't understand their calculation. At the bottom of the award there is £105.74 taken off for tax credits recovery. We do owe tax credits money as they overpaid us in 2021 when our entitlement ended so I don't dispute that we owe them money. I believe we owe them around £600 in total. Does this mean that we should have been entitled to an award of £105.74 but that this was given to repay tax credits instead? Are we actually entitled to UC? This months earnings reflect the amount we will actually earn every month as we are both salaried so are paid the same amount each month with the exception of my bonus which is performance based and paid yearly in April.

I am currently on maternity leave so I will be dropping down to SMP soon and we are really.going to struggle as I'll only be receiving 1/3 of my salary. I've put a message in the journal but nobody has replied. We're in Scotland so if we're entitled to UC we would also be entitled to the Scottish child payment, a pregnancy & baby grant and another grant in the summer for my middle child starting school which would make a huge difference to us. I need a UC award to claim these but I can't figure out if we're entitled or not.

I'm really struggling to understand their calculation for the following reasons:

1. Their take home pay figure is £234 more than I calculated it to be based on their rules. They have the same figures I do. I understand we get to keep the first £379 we earn then deductions of 55p per £1 we earn over that. Could this £234 be a reduction based on the bonus I received in April?
2. Our 'take home pay' figure they have calculated plus the 105.74 taken adds up to our total award reducing it to 0. I don't understand why they are taking 100% of our award when according to Google they're only allowed to take up to 25% or up to 40% in exceptional circumstances.
3. It says if you're receiving deductions from universal credit they should write to you telling you about it and how much they will take. We have received nothing from universal credit either in post or on our online account. When we made the claim we received a letter from tax credits telling us the final amount owed (which was half the amount they told us we owed initially) and that they would let UC know we owed them money. The first I have ever heard from universal credit was the deduction in today's calculation. I have attached a screenshot of this below.

I would really appreciate it if somebody could help me take sense of this. I just need to know if we're actually entitled to anything so I can claim the child payment and grants.

Sorry, I think the file was too large to attach in the OP.

An award starts with MAx UC - the money you and your partner and kids need to live on.

You say you've a work allowance of £379; you can keep that much from earnings before UC starts to taper off by 55p for every £1.

Earnings, for people on PAYE, are the amounts after tax, NI and Pension reported by your employers to HMRC when they run payroll.

So your award will have MAx UC, less work allowance, less 55p for every £ of earnings over the work allowance. If there are other deductions, eg for debt owed to tax credits those come off as well. There are rules about how much they can take:

https://www.citizensadvice.org.uk/benefits/universal-credit/problems-with-your-payment/if-your-payment-is-stopped-or-reduced/

If the above does not help please come back with more specific figures.

Hard to tell with only part of the statement showing.
Are all your elements correct ? Do you have standard couples element, rent element, child/ childrens element ( if you already have kids ) on your statement ? Deductions for wages are pretty high at £1638 so earnings must be pretty good.

You also mention a middle child, how many children do you have ? You will get a maximum of 2 child elements on the claim unless you have more and they were all born before April 2017. Do you have childcare costs and if so have they been included in the statement ?

Hi everyone, thanks for all of your replies.

I have 3 children with the youngest born in March 2023. I was aware that my third child wouldn't be included in the calculation. We are not claiming childcare costs but couples allowance, rent and child elements are there. They also have the correct earnings reported by our employers.

Our earnings are quite high which is why I was surprised we would be entitled at all. I only filled out the calculator when I heard that benefits were increasing by 10% in April and I was very shocked when I found out we would be entitled. I honestly find it ridiculous that our income isn't considered enough for a family of 4 (because our youngest child doesn't count) to live off of. The pregnancy was unplanned and money was a huge consideration when deciding whether ir not to continue with the pregnancy. I saved for mat leave and never even considered benefits at that point as I assumed we would earn too much.

After redoing all of the calculations I understand how they arrived at their 'take-home pay' figure. This minus the tax credits recovery amount reduces our award to 0. Therefore we should've been entitled to £105.74 this month but 100% of this was used towards our tax credits overpayment.

So I now understand everything except from:

1. Why haven't they informed us that they will take deductions from our award, how much this will be and when it will end.
2. Why are they taking 100% of our award when their own guidelines say they won't take more than 25% or 40% in exceptional circumstances.

Unfortunately they haven't replied to my message today so I won't hear from them until next week at the earliest.

I think it's 25% of the standard element they can take so £105 sounds about right.

If you have student loan deductions they don’t factor them in so they calculate your take home+student deductions so that can skew the figures.

The limit on deductions for debt are based on a proportion of the Standard Allowance, not the UC payable in any given Assessment Period.

As regards the deduction for a Tax Credits overpayment were you having money deducted whilst you were actually on Tax Credits? In that case, if the regime for deductions in was in place on Tax Credits then, all things equal, I'd expect it to follow.

Unfortunately, because of the way Tax Credits are based on previous years income overpayments emerging when actual figures are checked.

If you don't know anything at all about a TC recovery and this has emerged from the blue then it needs following up.