Who isn’t migrating Tax Credits to UC ?

[treedragon]

Received a letter about migrating from Tax Credits to Universal Credit.

A deep dive into seems to show that a huge chunk will be taken due to savings over £16k. It also seems like a lot of hassle trundling into Job Centres.

I have decided not to bother with moving so do the TCs just stop?

Interested to learn who else has decided not to bother??

Isn't that point of benefits? To help the most in need?

That’s the point of benefits, isn’t it? To help those in need.

I don't disagree with that. But I can see PP issue with her savings. You can try your best to save, hardly mega wealthy, but penalised for it.

We bought a kitchen and bathroom several years ago now which wiped out most of our savings so there's very little there now.

I was penalised immediately for savings. I do however get transitional protection due to my UC entitlement being significantly lower than TC.

£174 is taken off your money is not reduced for savings over 16k but it is reduced for savings between 6k and 16k.

If I am expected to go out and work then it's doubtful that we will go ahead with the claim and will close the account. Due to current circumstances it's not a possibility just now. CTCs were fine for allowing families to use money as they see fit to raise their children. Absolutely stupid and unwise decision and hopefully Labour get in and reverse UC system.

there is no transitional protection on existing savings between 6k and 16k

No tax credits won't stop.

My sums are correct, based on a savings level of £7000. After £7500, a claimant with a savings account returning 4.25% would start to lose money.

Tarrif income isn't meant to be a reflection of actual interest achievable. It's just a notional income.

I think it will as they will count my inheritance as extra income so therefore I won’t be eligible.

interest of over £300 a year is classed as income not the inheritance itself. So you ignore the first £300 of interest and any after that is your income.

I don't think pensions are counted as savings for UC (that is, paying into a pension whilst below pension age)

Really? I didn’t know that. Thanks.

I suspect you will be exempt from work expectations. You could also say you are a carer for the child who is disabled. That turns off work commitments. The Facebook groups are good. If you are entitled, look into it and see what you think.

Unfortunately the claim for the youngest is in the process of being looked into (need paediatrician input) so not sure that counts until it's officially successful. But thanks for the advice, probably good chance I won't be expected to look for work. Studying already difficult part time around a busy family life, not sure where work would fit in especially with my own chronic health issues .

Hang on so any savings between 6k and 16k aren't eligible for TP, so if you have these then when you migrate you actually won't be at the same level of income because they are taking money away from you for your savings?

yes this is correct. There is deductions for anything between 6k and 16k.

No there aren't and the figures they use for earnings ( which determine the deductions on UC ) are after tax, NI and pension contributions are taken off.

Tax credits would stop from the last date of the migration notice ( the date oyu should have claimed by ).

Yes. The Transitional Protection will protect the level of your Tax Credits if your UC award is lower. But if you have £16000 or more in the bank, for the first year you would have £174 deducted for the savings between £6000 and £10000, then after a year, you would lose UC altogether. If you have between £6000 and £16000 in the bank, you won't get any disregard for it and the tariff will be applied at a rate of £4.35 for each £250 over £6000 per month.

I'm getting a significant amount of Tax credits currently due to one child and low income. I currently have between £6 and £16k savings. When I do any of the UC calculators I get almost zero. I have capital in the one property I own - is that wiping it all out? Worried.

Tax credits will stop for everyone. They will no longer exist. We will just have to live on the inheritance for now. Although I'm trying to get my husband who has health conditions(lost pip 3 years ago) into part time work some how to cover the lost tax credits.

Is it a property that you don't live in? Equity in a property you live in is disregarded on UC.

We only get £44 a week WTC but have savings above £16k as we're saving for a house deposit. Every calculation I've done sees us getting less than £2 a week UC. So I don't think we'll bother.

No idea how people manage to save when having an income low enough to claim WTC but well done and yes probably no point applying although you would get the TP on the savings for 12 months.