MSE News: Universal credit - Most claimants unprepared, Citizens Advice says

[Deleted User]

As a carer, I still struggle to manage on the benefits I get. I budget very carefully, don't go out ever, but how I am supposed to save enough to pay rent (the payment date of which won't change and somehow I'm supposed to just magic up £775 on a week's money), plus buy food and pay other bills all on a week's money.

It doesn't matter if you work or not.., no one could manage such a transition without problems. Its nothing to do with knowing how to budget.., 1 just won't do 4 (ie one week's money won't stretch to cover things for a month).

You do remember that benefits are set at subsistence level don't you? There's not a lot left over to 'save' to cover the transition period.

My ex left me in a bit of a pickle financially when he left.., its taken me months to get things even barely on an even keel again. I dread this change. The people making the policies have absolutely no idea what effect the change will have.., they are just caught up in something that sounds good.

seven-day-weekend

deannatrois wrote: »

As a carer, I still struggle to manage on the benefits I get. I budget very carefully, don't go out ever, but how I am supposed to save enough to pay rent (the payment date of which won't change and somehow I'm supposed to just magic up £775 on a week's money), plus buy food and pay other bills all on a week's money.

It doesn't matter if you work or not.., no one could manage such a transition without problems. Its nothing to do with knowing how to budget.., 1 just won't do 4 (ie one week's money won't stretch to cover things for a month).

You do remember that benefits are set at subsistence level don't you? There's not a lot left over to 'save' to cover the transition period.

My ex left me in a bit of a pickle financially when he left.., its taken me months to get things even barely on an even keel again. I dread this change. The people making the policies have absolutely no idea what effect the change will have.., they are just caught up in something that sounds good.

Whilst understanding your problems, this is another facet of the benefit trap, isn't it? What would happen if you found work, you would have to manage for a month then. Everyone has that problem who has been on Benefits, if something suddenly changes (or indeed if they change from weekly to monthly paid employment).

Morglin

At one time, if you were on benefits and found work, the DWP could loan you money to tide you over with the transition, which you the paid back gradually

Lin

BigAunty

MissMoneypenny wrote: »

Didn't the Labour MP Frank Field also predict that Tax Credits would be "a benefits trap" and resign his post of Minister of Welfare Reform, when Blair decided to bring in his "vote winner" new benefit, Tax Credits?

...

I've dug up some of his opinions on tax credits and they chime with mine.

"tax credits have given rise to a huge dependency not only among claimants but also among employers. This "wage subsidy" has grown to more than £26bn annually. And tax credits for women with children have almost obliterated the difference in levels of take-home pay between the highly skilled and the unskilled.

Huge swaths of the electorate cannot now make themselves better off by gaining qualifications or working longer. Only the chancellor can do that by changing tax credit rates. Such circumstances do not encourage the effort and entrepreneurial spirit required to generate economic growth.
Employers deliberately structure their jobs so employees can gain the maximum tax-credit supplement. Hence the extraordinary rise of part-time employment."

http://www.theguardian.com/commentisfree/2013/apr/11/how-to-make-pay-work

Field's analysis is that the public's attitude towards welfare is that you should get out what you put in. The trouble is that when Labour was in power it did the opposite. Gordon Brown used means-testing to spray £30bn on tax credits as a subsidy for poor families. The idea that one hardworking breadwinner would think it fair that his lower-paid neighbour received state cash for free to top up his pay packet, was, in Field's view, "why the policy failed".


http://www.theguardian.com/society/2013/oct/29/frank-fields-welfare-contribution-plan

zagfles

deannatrois wrote: »

As a carer, I still struggle to manage on the benefits I get. I budget very carefully, don't go out ever, but how I am supposed to save enough to pay rent (the payment date of which won't change and somehow I'm supposed to just magic up £775 on a week's money), plus buy food and pay other bills all on a week's money.

It doesn't matter if you work or not.., no one could manage such a transition without problems. Its nothing to do with knowing how to budget.., 1 just won't do 4 (ie one week's money won't stretch to cover things for a month).

You do remember that benefits are set at subsistence level don't you? There's not a lot left over to 'save' to cover the transition period.

My ex left me in a bit of a pickle financially when he left.., its taken me months to get things even barely on an even keel again. I dread this change. The people making the policies have absolutely no idea what effect the change will have.., they are just caught up in something that sounds good.

They have thought of this. See http://www.legislation.gov.uk/ukdsi/2013/9780111531549/regulation/19

zagfles

BigAunty wrote: »

I've dug up some of his opinions on tax credits and they chime with mine.

"tax credits have given rise to a huge dependency not only among claimants but also among employers. This "wage subsidy" has grown to more than £26bn annually. And tax credits for women with children have almost obliterated the difference in levels of take-home pay between the highly skilled and the unskilled.

Huge swaths of the electorate cannot now make themselves better off by gaining qualifications or working longer. Only the chancellor can do that by changing tax credit rates. Such circumstances do not encourage the effort and entrepreneurial spirit required to generate economic growth.
Employers deliberately structure their jobs so employees can gain the maximum tax-credit supplement. Hence the extraordinary rise of part-time employment."

http://www.theguardian.com/commentisfree/2013/apr/11/how-to-make-pay-work

Field's analysis is that the public's attitude towards welfare is that you should get out what you put in. The trouble is that when Labour was in power it did the opposite. Gordon Brown used means-testing to spray £30bn on tax credits as a subsidy for poor families. The idea that one hardworking breadwinner would think it fair that his lower-paid neighbour received state cash for free to top up his pay packet, was, in Field's view, "why the policy failed".


http://www.theguardian.com/society/2013/oct/29/frank-fields-welfare-contribution-plan

The trouble is that if you chase targets, like the previous govt were obsessed with, then they're probably a success. By reducing the difference between the average and the bottom, you reduce "child poverty", by increasing part-time work, you reduce unemployment stats.

You create poverty traps and destroy incentives, but who cares as long as the right boxes are ticked. Just like hospital targets...

ALIBOBSY

seven-day-weekend wrote: »

Whilst understanding your problems, this is another facet of the benefit trap, isn't it? What would happen if you found work, you would have to manage for a month then. Everyone has that problem who has been on Benefits, if something suddenly changes (or indeed if they change from weekly to monthly paid employment).

Actually virtually everywhere I or OH have worked allow you to request a payment advance in the first month-usually part way through the month ie. 2 weeks.

Plus some of the benefits replaced by UC are currently paid in advance some in arrears. What about if someone fails to sign on, at the moment the JSA would stop, but tax credits would continue will UC just all stop even though strictly speaking some parts will still be payable.

A lot of difficulties to sort all of which are going to cause some hardship to people. I think they will have to have some kind of system where they can make advances and/or emergency payments for the changeover period.

Ali x

seven-day-weekend

ALIBOBSY wrote: »

Actually virtually everywhere I or OH have worked allow you to request a payment advance in the first month-usually part way through the month ie. 2 weeks.

Plus some of the benefits replaced by UC are currently paid in advance some in arrears. What about if someone fails to sign on, at the moment the JSA would stop, but tax credits would continue will UC just all stop even though strictly speaking some parts will still be payable.

A lot of difficulties to sort all of which are going to cause some hardship to people. I think they will have to have some kind of system where they can make advances and/or emergency payments for the changeover period.

Ali x

Virtually nowhere I have worked has allowed this.

ALIBOBSY

zagfles wrote: »

They have thought of this. See http://www.legislation.gov.uk/ukdsi/2013/9780111531549/regulation/19

Should have read the whole thread before my last post lol. Looks like this allows for the advance/extra payments during the changeover period. Once people are into the swing on monthly payments things should be ok.

Ali x

ALIBOBSY

I have also suspected that tax credits have kept wages at the lower end of the employment market down, its easier for employers to get people to work for min wage when the employees know they can get that low wage topped up.

It is clear the trend in employment in this country, has for some years drifted to more part time, more min wage, more zero hours contracts as long as the tax credits bridge the gap people will keep working. But as the benefits get cut over the next few years-whoevers in power there simply won't be the money to do anything else but reduce the benefits, will employers be forced to pay more simply to get workers through the door? We will see.

Ali x