Universal Credit

confusedmummy

Sixer wrote: »

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!

Thanks Sixer, much clearer! I wonder if what people will have to provide as proof they are actively looking for work is going to be made stricter? It seems like they are making the system much stricter. What will happen to people on income support who don't have to look for work?

zagfles

Spendless wrote: »

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?

Yes. It's sort of similar to now, except the conditionality levels are higher. Now you can get HB/CTB/tax credits with no conditionality but not JSA, so the "threshold" now is about £5500 for a couple, under UC it will be a lot higher for most.

Is there an income cut off that UC isn't paid at (like there is with tax credits)?

There is no income "cut-off" with tax credits, you get various elements which are tapered and at some point they will taper to zero, but that point depends on exactly what elements you are entitled to. The more elements, the higher the income at which they get tapered to zero.

I imagine it'd be similar with UC.

zagfles

confusedmummy wrote: »

Thanks Sixer, much clearer! I wonder if what people will have to provide as proof they are actively looking for work is going to be made stricter? It seems like they are making the system much stricter. What will happen to people on income support who don't have to look for work?

They will have a lower threshold because they aren't expected to work. Eg single parent with a baby wouldn't have any threshold, couple with a baby will have a threshold of one person working 35 hours at NMW rather than 2.

marrbett

Will Child Benefit be rolled into UC, thus stopping it being something all parents of children(now earning under £44k)are entitled to?

zagfles

marrbett wrote: »

Will Child Benefit be rolled into UC, thus stopping it being something all parents of children(now earning under £44k)are entitled to?

That's not the current plan, child benefit is to be kept separate. Otherwise it'd be subject to capital rules etc.

But this is all up in the air at the moment with the current hole the govt has dug itself with child benefit. This could all change in the budget in a couple of weeks.

bestpud

Have I got this right?

The target income will remain the same however many children there is in the family? But the amount of UC they receive will still include an element per child?

I can see over stretched job centres crumbling under these rules! They can barely cope with the unemployed, let alone working people!

It has to happen though - only a crazy system pays two able-bodied parents to work 16 hours between them.

Dontknowanymore

So does this mean they will be making one single payment instead of various payments over the week/fortnight?

Sixer

bestpud wrote: »

Have I got this right?

The target income will remain the same however many children there is in the family? But the amount of UC they receive will still include an element per child?

Yes, that's right.

bestpud wrote: »

I can see over stretched job centres crumbling under these rules! They can barely cope with the unemployed, let alone working people!

Yep! How about HMRC? The plan is to implement this as a real-time merge with PAYE. Zagfles is more optimistic than I am about this, but I just cannot see it working.

Think how complex LHA is. It won't be administered by people with any experience of it. It's all leaving the local authority.

bestpud

Sixer wrote: »

Yes, that's right.



Yep! How about HMRC? The plan is to implement this as a real-time merge with PAYE. Zagfles is more optimistic than I am about this, but I just cannot see it working.

Think how complex LHA is. It won't be administered by people with any experience of it. It's all leaving the local authority.

I'm inclined to agree. I thought UC was about simplifying the benefit system but I can see this being a logistical nightmare.

BigAunty

bestpud wrote: »

...

It has to happen though - only a crazy system pays two able-bodied parents to work 16 hours between them.

Yeah, 212,000 households with probably at least 400,000 or more kids between them.

I understood the concept of WTC to encourage workless households to undertake at least some employment and be better off than a non-working household. However, it backfired as it made working part time more attractive than full time because their standard of living is so similar with just a few hours in employment.