Universal Credit

marrbett

With the proposed changes bringing in universal Credits (eventually), am I right in assuming that between them, parents will have to be earning 2X minimum wage amounts before being able to claim what are now called child tax/working tax credits?
So if minimum wage is £6.08, that's approx £23K??

If you don't bring in this amount between you, you will get nothing if you're not looking for work. Have I got this right?

uponahill

marrbett wrote: »

With the proposed changes bringing in universal Credits (eventually), am I right in assuming that between them, parents will have to be earning 2X minimum wage amounts before being able to claim what are now called child tax/working tax credits?
So if minimum wage is £6.08, that's approx £23K??

If you don't bring in this amount between you, you will get nothing if you're not looking for work. Have I got this right?

In principle - yes.

It's all about helping yourself first instead of being reliant on benefits.

Sixer

It's kind of correct. The briefing notes outline the following:

Couple with no children or children 12+ : earnings threshold of 2 x 35 x NMW per week.

Couple with children 5-12: earnings threshold of 1 x 35 x NMW + 1 x 20ish x NMW per week.

Couple with children under 5: earnings threshold 1 x 35 x NMW per week.

Doesn't matter who earns what. It's the cash threshold that counts. So if one person in the couple earns the full cash threshold, that's fine.

If couples don't make the cash threshold then they have a choice:

Claim UC on the basis of the cash threshold as notional income instead of their actual income.

Claim UC on the basis of their actual income and submit to JSA-style jobseeking conditionality (ie show evidence of seeking more/better paid work).

confusedmummy

Sixer wrote: »

It's kind of correct. The briefing notes outline the following:

Couple with no children or children 12+ : earnings threshold of 2 x 35 x NMW per week.

Couple with children 5-12: earnings threshold of 1 x 35 x NMW + 1 x 20ish x NMW per week.

Couple with children under 5: earnings threshold 1 x 35 x NMW per week.

Doesn't matter who earns what. It's the cash threshold that counts. So if one person in the couple earns the full cash threshold, that's fine.

If couples don't make the cash threshold then they have a choice:

Claim UC on the basis of the cash threshold as notional income instead of their actual income.

Claim UC on the basis of their actual income and submit to JSA-style jobseeking conditionality (ie show evidence of seeking more/better paid work).

Can you post a link to the government website? I really don't understand that at all. Are you saying that couples with kids out of work could lose their child tax credits altogether if they are not adhering to certain conditions? thanks.

MissMoneypenny

confusedmummy wrote: »

Can you post a link to the government website? I really don't understand that at all. Are you saying that couples with kids out of work could lose their child tax credits altogether if they are not adhering to certain conditions? thanks.

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

If you want UC payments, then you will have to adhere to the set conditions, just as job seekers have to now if they want their benefit payment.

UC will also have capital limits; whereas at the moment tax credits strangely doesn't have capital limits, even though all other income based welfare payments do. This anomaly will be rectified with Universal Credits.

Spendless

Sixer wrote: »

It's kind of correct. The briefing notes outline the following:

Couple with no children or children 12+ : earnings threshold of 2 x 35 x NMW per week.

Couple with children 5-12: earnings threshold of 1 x 35 x NMW + 1 x 20ish x NMW per week.

Couple with children under 5: earnings threshold 1 x 35 x NMW per week.

Doesn't matter who earns what. It's the cash threshold that counts. So if one person in the couple earns the full cash threshold, that's fine.

If couples don't make the cash threshold then they have a choice:

Claim UC on the basis of the cash threshold as notional income instead of their actual income.

Claim UC on the basis of their actual income and submit to JSA-style jobseeking conditionality (ie show evidence of seeking more/better paid work).

What does the bolded bit mean please? I understand the rest.

zagfles

Spendless wrote: »

What does the bolded bit mean please? I understand the rest.

Say your threshold is £425pw (2x35h NMW for couple with kids over 12)

If you earn more you'd get UC based on what you earn with no conditions.

If you earn less, say £300pw, you have a choice:

a) Seek work/more work and get UC based on your actual income of £300

b) Don't bother, and get UC paid as if your income was £425, which will get you less UC than in a) due to higher income.

Sixer

confusedmummy wrote: »

Can you post a link to the government website? I really don't understand that at all. Are you saying that couples with kids out of work could lose their child tax credits altogether if they are not adhering to certain conditions? thanks.

The briefing notes are more useful than Miss Moneypenny's link (sorry, Miss Moneypenny!)

http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-bill-2011/universal-credit-briefing/

However, you'll find I summarised it more clearly than the briefing notes do.

If you read what I said, I've made it as clear as I can. Tax credits won't exist. Universal Credit will be available to all. Nobody will lose anything altogether. People will be expected to attain a level of income based on their household type. If they do not attain this level of income, they will have a choice:

* prove they are jobseeking to try to get to the level of income (like JSA claimants have to now

* if they don't want to jobseek, then they will receive Universal Credit AS IF they were earning the target income

The target income will be based on NMW x a certain number of hours depending on whether or not they have children and how old the children are.

Let's take the example of a family with children aged over 12. That family's target will be 35 x 52 x 6.08 x 2 (two full time workers). Their target income will therefore be £22,131. If they earn this much between them (doesn't matter if it's just one of them or both of them), then they'll receive UC on an income of £22,131. If they only earn £15,000 between them, then they have a choice:

* prove they're looking for work in the same way JSA claimants do now and receive UC on an income of £15k

* say they don't want to submit to that conditionality and receive UC based on an income of £22,131 even though they only actually earn £15,000.

I don't know how I can make it any simpler or clearer!

Sixer

Sorry Zagfles - posting as you were!

Sixer

You want the chapters on condionality in particular - 10, 11 and 12. But you'll really need to read it all or you'll miss important definitions that are explained earlier on.

Spendless

zagfles wrote: »

Say your threshold is £425pw (2x35h NMW for couple with kids over 12)

If you earn more you'd get UC based on what you earn with no conditions.

If you earn less, say £300pw, you have a choice:

a) Seek work/more work and get UC based on your actual income of £300

b) Don't bother, and get UC paid as if your income was £425, which will get you less UC than in a) due to higher income.

Thank you. I get it now. I do know of some married women with husbands in lowish paid jobs who in the past haven't looked for work/have turned down work cos their tax credit has made it 'not worth me working'. Presumably from what you say UC will stop that? Is there an income cut off that UC isn't paid at (like there is with tax credits)?