Universal credit - how it will work

kerrypn

My only concern with the overhaul is whether hard working low income families will be worse off under the new system.

Unfortunately, it doesn't matter what you do to the benefits system-those who know how to play the system will continue to play the system and rinse it for all its worth no matter what. I realise this is a small number of claimants-but it is these that need the crackdown more than most.

The people who are likely to suffer are the ones who rely on the tax credit system to make up their wages to a livable amount per annum.

I do agree changes need to be made. A friend of a colleague gets 1500 GBP a month in benefits does not pay rent or council tax and chooses not to work. Until this area is addressed, things will never change IMO

BigAunty

kerrypn wrote: »

...

The people who are likely to suffer are the ones who rely on the tax credit system to make up their wages to a livable amount per annum.

..

Tax credits are only a sticking plaster in our high cost/low wage economy. I don't think its recipients ever think past how it helps their immediate household. It's not good for wider society or employers to have tax credits. It stops the govt from addressing things like lack of affordable housing, transport and childcare if they just shove out benefits to make up low incomes.

One of my relatives in a recruitment role has long bewailed how the 16 hours limit for lone parents (now raised to 24 for 2 parent families) isn't employer friendly. Their may have operational activities that result in peak periods and the bulk of those with parental responsibilities refuse to take on any extra work or switch into full time roles because it affects their benefits. These recipients get literally the same or more income than other households with higher employment income, longer working hours.

Also, Labour left a legacy whereby more was paid out in benefits than is paid in income tax receipts, very healthy imbalance if the public is getting more than employees are paying in tax.

kerrypn

I agree entirely-but until something is done about lack of affordable housing and raising the minimum wage significantly, then unfortunately people do have to rely on tax credits-I am all for reforms that make tax credits unneeded-but these reforms must come first, not second to stripping away lifelines of tax credits to hardworking families.

BigAunty

kerrypn wrote: »

...-I am all for reforms that make tax credits unneeded-but these reforms must come first, not second to stripping away lifelines of tax credits to hardworking families.

Well hopefully once the reforms take place which make people better off in employment, more households will be incentivised to support their families through working longer hours or getting to used to getting by on less, in the way they used to have to do before the implementation of tax credits.

Also, perhaps it will lead to more political pressure to get employers to pay a living way above NMW rather than get away with paying the minimum and expecting the state to subsidise its employees.

The cushion of tax credits comes at very bad cost to society, I think, anything from the resentment that it creates when households find their part time working neighbours are better off than them, through to its negative impacts on employers, the way that it promotes parents to live apart and so forth.

kerrypn

BigAunty wrote: »

Well hopefully once the reforms take place which make people better off in employment, more households will be incentivised to support their families through working longer hours or getting to used to getting by on less, in the way they used to have to do before the implementation of tax credits.

Also, perhaps it will lead to more political pressure to get employers to pay a living way above NMW rather than get away with paying the minimum and expecting the state to subsidise its employees.

The cushion of tax credits comes at very bad cost to society, I think, anything from the resentment that it creates when households find their part time working neighbours are better off than them, through to its negative impacts on employers, the way that it promotes parents to live apart and so forth.

If the bit in bold does happen, it is definitely a good thing-the NMW should be raised anyway in line with living costs which to be fair it hasn't over the years.

You are bang on the money about getting a system is place that makes work pay, and I think 99% of people out there working would support that. As I say my only worry is what will actually happen is the assistance to low earners(full time) will be cut with no measures to compensate for this such as raising the NMW, yet the people who do not work at all for no good reason will be unaffected-and I worry that this is in fact the most likely scenario

Desperate to be proved wrong though

missapril75

Originally Posted by Cate1976
I think that when UC comes in, there should be an option for people who genuinely can't manage on a monthly payment to get it weekly. ..

BigAunty wrote:

I disagree - UC should simplify things and not set up exceptions where people cannot or won't budget for various reasons. It is much better if there are rules that people change their behaviour to fit rather than a system which has masses of discretion in it.

In a perfect world, perhaps. But there are those who, for whatever reason, are better at managing money in the way they manage it - however bemusing it may seem to most. To put at risk their housing and ability to manage other financial matters (with all the attendant problems that come with that) on a point of principle seems somewhat foolhardy.

gravitytolls

Cate1976 wrote: »

My husband & I are on benefits but would rather we weren't. Due to our circumstances when my husband lost his appeal for being found fit for work by ESA medical, our twin girls were 11 months old so me working full time wasn't going to be practical. I claimed IS for both of us due to being my husband's carer but have been doing some studying as well as some job hunting mostly checking the local papers.

My thoughts on the Universal Credit are that although it will simplify things, it's going to cause problems. The first being for people who rent privately, most landlords want rent paid in advance so that's going to mean some people paying their first month's rent in advance then not having money for food.

The second I can see is that people currently on disability benefits who are only able to work part time will find themselves losing their disability entitlements but then not being able to live an acceptable standard of living, by that I mean enough money for food, clothes and essential bills and a little left over each month to save for clothes.

I have a nasty suspicion that this is what will happen to my husband & I.

At this point I know some of you who tar all people on benefits with the scrounger brush are asking what we're doing about it. The answer is that better employment prospects is one of the reason's we're moving to Norfolk in the Autumn. I'll look for a job which'll pay enough for us to get off means tested benefits, will probably need top up from WTC. My husband is also hoping to look for work, he could cope with max of 20 hours a week. I'm also going to be studying for getting into the accounting area. Am currently waiting on results of first year of Accounting Technicians Ireland Level 5 Diploma.

Our goal is to be off means tested benefits before girls start school in 2014, might be ambitious in current economic climate.

Finding

Ican't see you managing in Norfolk without any benefits. On the upside, it's a lovely olace to raise children. Jobs are often seasonal and mostly P/T.

Random word at the beginning of my post.......:think:

Morlock

BigAunty wrote: »

Also, perhaps it will lead to more political pressure to get employers to pay a living way above NMW rather than get away with paying the minimum and expecting the state to subsidise its employees.

The Tories would quite happily scrap the minimum wage at any given opportunity, they are a pro-business party. Do not forget who implemented the minimum wage, under a Tory government it would never have happened and we would all be a lot worse off.

Anubis_2

Universal Credit will only work IF there are enough jobs there in the first place. At the moment it has as much chance of success as I have of getting a 100 percent clean bill of health, which is zero chance.

BigAunty

Anubis wrote: »

Universal Credit will only work IF there are enough jobs there in the first place....

UC doesn't require full employment for a successful implementation. Full employment hasn't happened in the UK since the 70s, at least.

It is simplifying a clunky, chaotic, complex system and making those in employment better off - that is a fantastic goal. It will be definately better for employees and employers, yes, and better for society, too.

The structural problems in capitalism mean that there will always be pools of unemployed people. I'm not sure why you think UC should/could address this.