Universal Credit and Savings

atlantis187

How is the new universal credit system going to affect people with savings? We currently only receive child tax credits based on my income of £20,000 but have been saving like mad and our savings are well over £16,000 is this going to affect us?

Will we no longer be entitled to child tax credits?

What is the limit of saving u are allowed to have in order to still be able to claim child tax credits?

gingergee

Even now if you have 16k it will affect ctc i think???

nannytone_2

it is only interest on capital that affects ctc at the moment.

when universal credit comes in, no one will get child tax credit .... they will have to apply for universal credit, as ctc will be scrapped.

to be honest OP, and im not deliberately being harsh ....

if you can afford to save over 16k whilst in receipt of benefit ... it's a biyt of a slap in the face for low earners, who can claim nothing, but are paying tax to give to people who are managing way better than they are!

and yes ... as far as i can work out, savings will be considered under the new system

annie1975_2

nannytone wrote: »

it is only interest on capital that affects ctc at the moment.

when universal credit comes in, no one will get child tax credit .... they will have to apply for universal credit, as ctc will be scrapped.

to be honest OP, and im not deliberately being harsh ....

if you can afford to save over 16k whilst in receipt of benefit ... it's a biyt of a slap in the face for low earners, who can claim nothing, but are paying tax to give to people who are managing way better than they are!

and yes ... as far as i can work out, savings will be considered under the new system

I assume then that working tax credits will stop as well as the child tax credits?
Blimey wish I could save £1600,let alone £16k.

atlantis187

Is there any links u can point me to re. How saving will affect people in the new universal credits system.

And to the poster above, low earners get a lot more child tax credits than we do. My income of 20k feeds & houses 4 people
People earning double what I earn even receive child tax credits upto 42k.

An example: woman I work with gets the following with 2 kids
Work salary £90 a week 2 mornings a week
Husband salary - 18k a year
CTC- 155 a week
Dla - 52 a week
Carrers allowance - 55 a week
She is currently pregnant with third child so tax credits will sky rocket to over £200 a when baby is born.

gingergee

Its going to be much simpler i think UC. Also i think the OP has done well to save that much! Maybe you could post on the budgeting board with some hints etc. I thought id done well to save the amount i had lol xx

downshifter98

CTC is currently based purely on income - meaning, for example, that anyone with children who earn a low-ish wage (or don't work at all) but with say a million quid in the bank earning next to nothing (2%?) will still receive some CTC - still not sure whether Gordon was mad or bad haha. Universal credit will be fully means tested so capital will be taken into account. As a side note, help for student finance is also similar - ie purely based on parents income irregardless of capital so the ideal set up over the last 10 years or so would have been money in the bank plus part-time work plus kids all 21 before CTC ends...:money:

BigAunty

Find the DWP proposal paper for the Universal Credit system on the DWP website as it provides the best overview of UC.

I have seen a paper dealing specifically with savings (for example, people saving for a house) and the govt decided there was no way or they had no desire to ring-fence savings.

So, yes, under UC, your savings will affect your eligibility to receive it - the type of capital limits that apply to means tested benefits now (such as Income support, Housing Benefit, council tax discount) will apply to UC, unlike tax credits where people with high savings but low income receive them. As indicated previously, tax credits will be scrapped, so the capital limits will apply in full under UC with no exemptions currently enjoyed by tax credit recipients.

BigAunty

atlantis187 wrote: »

...
And to the poster above, low earners get a lot more child tax credits than we do. My income of 20k feeds & houses 4 people
People earning double what I earn even receive child tax credits upto 42k.

An example: woman I work with gets the following with 2 kids
Work salary £90 a week 2 mornings a week
Husband salary - 18k a year
CTC- 155 a week
Dla - 52 a week
Carrers allowance - 55 a week
She is currently pregnant with third child so tax credits will sky rocket to over £200 a when baby is born.

You are comparing apples with pears - your own situation is that you can't hope to receive UC with that degree of savings, though there is some kind of transitional protection in place when it is introduced. Before tax credits were introduced, your eligibility to receive any type of means tested/income based benefit would have been severely compromised by your savings, so we are reverting back to that kind of situation.

Not even sure why you would have used an example whereby the household receives around £100 per week in disability/care related benefits, quite an irrelevance to your own.

princessdon

It's about time too!

Why on earth should someone who can earn a few pennies more than you a year with no savings and maybe on the breadline pay for you to have your tax credits whilst having large savings in the accounts?

I hope from April this is the first part they slam into place with UC - Immediate savings check should be the FIRST thing they do.

SkyeKnight

princessdon wrote: »

It's about time too!

Why on earth should someone who can earn a few pennies more than you a year with no savings and maybe on the breadline pay for you to have your tax credits whilst having large savings in the accounts?

I hope from April this is the first part they slam into place with UC - Immediate savings check should be the FIRST thing they do.

The ridiculous thing is that if the OP buys a house with her savings then they don't count again. I believe we are going to qualify for UC even though we have more than 10x £16k equity in our house.