Universal Credit for [merged]

seven-day-weekend

I don't understand how the proposed Universal Credit works.

Is it just combining several Benefits under one umbrella? So that for example if someone claimed £200 a month Housing Benefit and £300 a month Jobseekers' Allowance they would get £500 a month under UC? In which case it is just a change of name.

Does the amount they are entitled to depend upon their circumstances, the same as now?

Is it all means-tested?

I understand that people who move into work will be able to keep more of their income than under the present set-up.

There must be a load of things I am missing. Can people explain to me how it works - bearing in mind the title of my thread?:)

LadyMorticia

I'd like to know about this too.:o

zagfles

Very simply... it combines most means tested benefits, eg HB, JSA(IB), IS, WTC, CTC.

It doesn't include CTB (which will be "localised"), and child ben, DLA and contributory benefits.

It is means tested and will be tapered at 65% on net income, with quite a big disregard depending on circumstances (ie you'll be able to earn a fair amount before it starts being reduced).

It'll make moving into work of less than 16 hours far more benefiicial than it is now.

There are capital rules similar to IS, ie over £16k capital you get nothing.

There are transitional rules so those who will be worse off under UC will get "cash protection", This includes those with large savings claiming tax credits.

There will be conditionality rules depending on earnings not hours. If you earn below the amount (dependant on single/couple/age of kids/disabilities etc) you'll be expected to seek work/further work. Unlike now where it's done on hours.

BigAunty

SDW - sorry, but there's no short cut other than to read the DWP proposal papers. I think I've posted the link to it but can't be 100% sure.

http://www.official-documents.gov.uk/document/cm79/7957/7957.pdf

http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/universal-credit/

It's definately not the plan that a household retains the same level of benefits as before implementation, though I do believe at launch there is a promise no-one will be worse off. One of its main aims is to ensure people are always better off in employment.

A couple of key controversies is that there is an expectation that a stay at home parent with children of school age should seek employment, some kind of change in threshold, which I can't elaborate on further.

Another thing that has got some people up in arms is that the self employed will be treated as if they earn the NMW from their businesses. I think this must be a way of discouraging the tens of thousands of hobby and ebay type 'businesses' that now flourish because of tax credits.

I've always been astonished that a household can have tens of thousands of pounds in savings and still qualify for tax credits.

To me, the aim to make work pay is well overdue - the emphasis on tackling child poverty by giving subsidies to parents rather than making work pay was always shortsighted, so too is the way that tax credits for the self-employed can kill real entreprenurial spirit as it can disincentive profit!

seven-day-weekend

zagfles wrote: »

Very simply... it combines most means tested benefits, eg HB, JSA(IB), IS, WTC, CTC.

It doesn't include CTB (which will be "localised"), and child ben, DLA and contributory benefits.

It is means tested and will be tapered at 65% on net income, with quite a big disregard depending on circumstances (ie you'll be able to earn a fair amount before it starts being reduced).

It'll make moving into work of less than 16 hours far more benefiicial than it is now.

There are capital rules similar to IS, ie over £16k capital you get nothing.

There are transitional rules so those who will be worse off under UC will get "cash protection", This includes those with large savings claiming tax credits.

There will be conditionality rules depending on earnings not hours. If you earn below the amount (dependant on single/couple/age of kids/disabilities etc) you'll be expected to seek work/further work. Unlike now where it's done on hours.

Thanks, that has really helped.

However, the bit I've underlined......below what amount?? Can you give an example? I'm always better with examples!

zagfles

seven-day-weekend wrote: »

Thanks, that has really helped.

However, the bit I've underlined......below what amount?? Can you give an example? I'm always better with examples!

See Sixer's posts in this thread https://forums.moneysavingexpert.com/discussion/3621977=

seven-day-weekend

I read that thread earlier on and found it inpenetrable!! Hence the question

Fiver29

seven-day-weekend wrote: »

I read that thread earlier on and found it inpenetrable!! Hence the question

I am struggling to understand it too. Can anyone put this into plain English? (or Dummies guide language)

Setting the level of the threshold: an expectation of fulltime work wherever appropriate
a) Under current benefit rules we expect any JSA claimant without caring
responsibilities or health conditions to be actively seeking and available for
10 October 2011 full-time work. We will maintain this expectation to look for full-time work under Universal Credit.

b) We do not believe it is appropriate to require anyone to earn more than the National Minimum Wage, or to work longer than full-time. We therefore intend to set the maximum threshold for a single claimant at the level of earnings that would be accrued by working full-time at the National Minimum Wage.

c) If we take full-time to mean 35 hours, the maximum conditionality threshold for an individual would be set at £212.80 at current rates. This means that if an individual earns over £212.80 per week before tax, they will be in the no conditionality group.

What's the conditionality bit mean?

MissMoneypenny

Fiver29 wrote: »

What's the conditionality bit mean?

I assume it is this:-

http://www.guardian.co.uk/commentisf...=FBCNETTXT9038

But Lord Freud, minister for welfare reform, fears the new system will pay "benefit to claimants who are clearly capable of working or earning more". He wants to apply conditionality to in-work claimants.

People who work hard and feel they are contributing to society will be told they must earn more or face a sliding scale of cuts to their income. In-work conditionality will be defined by an earnings threshold, the equivalent of a 35-hour week on the national minimum wage (currently £212.80). Workers who fall below this threshold must increase their work with their current employer, or look for an additional job or for a new one. The threshold for single parents with a child under 13 will be about 20 hours with gross pay of £120. With children over 12 they will be expected to work full time within 90 minutes of their home.

Conditionality will be personalised. Mothers and fathers will be treated as separate individuals rather than as a family. With a child under 13, one must be designated as the carer who will be under the same conditionality as a single parent. The other will be treated as a single worker. A couple with children over 12 will both be expected to work 35 hours.

Fiver29

Edited

:doh: Think I just got it.

) If we take full-time to mean 35 hours, the maximum conditionality threshold for an individual would be set at £212.80 at current rates. This means that if an individual earns over £212.80 per week before tax, they will be in the no conditionality group.

So they're saying that if someone earns £212 a week, they'll get the top up UC with no questions asked (not literally no questions, but you know what I mean), whereas if you earn £150 a week you'll get the UC, but on the condition you look for more work or better paid work.

Is that right?

Weary_soul

People who believe they are making a contribution, but through no fault of their own cannot earn more, need training, a living wage and access to good quality childcare, not the state threatening to impoverish them further. In-work conditionality may prove to be the bridge too far for Tory welfare "reform".

Exactly. This is going to be a nightmare for the low paid.