Universal Credits

abby1234519

Just a quick one, standard jist in the news and media is that universal credit will make us all worse off apart from 8% (i think)

Now, entitled to says that our £40 tax credits would turn into £99 a week under universal credit. So of course I can't wait!!!

I live in one of the initial roll out areas so is it bad of me to want to be switched onto universal credit sooner.

rogerblack

abby1234519 wrote: »

Just a quick one, standard jist in the news and media is that universal credit will make us all worse off apart from 8% (i think)

This is at best an oversimplification.
UC will have winners and losers, and cliff-edges in income.
For example, someone who is out of work, and gets help with their mortgage payments under UC of (say) 400/month - if they are able to get part-time work at 50/week - will stop being entitled to any help with their mortgage at all.

http://blog.cix.co.uk/gmorgan/2013/03/18/three-big-lies-of-welfare-reform/ - this hasn't gotten better since then.

zagfles

rogerblack wrote: »

This is at best an oversimplification.
UC will have winners and losers, and cliff-edges in income.
For example, someone who is out of work, and gets help with their mortgage payments under UC of (say) 400/month - if they are able to get part-time work at 50/week - will stop being entitled to any help with their mortgage at all.

http://blog.cix.co.uk/gmorgan/2013/03/18/three-big-lies-of-welfare-reform/ - this hasn't gotten better since then.

Mortgage interest support has always had a cliff edge, so it's nothing new. Though they could have taken the opportunity to tidy that anomoly.

UC will have less cliff edges than the current system, for instance the 16/24/30 hour cliff edges in tax credits, the 16/24 hour cliff edges in JSA will all go.

The 8% sounds like rubbish, it's likely more people will be better off than worse off under UC compared to the current systems.

rogerblack

zagfles wrote: »

Mortgage interest support has always had a cliff edge, so it's nothing new. Though they could have taken the opportunity to tidy that anomoly.

My understanding is that you can claim SMI in some circumstances if you are claiming JSA, to top up very low level employment.
Even one penny a week of employment will wipe out SMI for people under UC.

Sweeping generalisations are going to be hugely unhelpful - the treatment of people with and without housing costs, the differing treatment of 'households', extended benefit units, the problems with the lack of averaging income ...

Some will be better off, some worse off.

Morglin

As the IT problems seem to be increasing with this, it'll be a long while before it's mainstream anyway.

Lin

zagfles

rogerblack wrote: »

My understanding is that you can claim SMI in some circumstances if you are claiming JSA, to top up very low level employment.
Even one penny a week of employment will wipe out SMI for people under UC.

Yes, there's still a cliff edge though in a different place. Now it's 16 hours, under UC is 0 hours AIUI.

Sweeping generalisations are going to be hugely unhelpful - the treatment of people with and without housing costs, the differing treatment of 'households', extended benefit units, the problems with the lack of averaging income ...

Some will be better off, some worse off.

Have I missed something...what are the changes in treatments of households/benefit units?

MissMoneypenny

rogerblack wrote: »

This is at best an oversimplification.
UC will have winners and losers, and cliff-edges in income.
For example, someone who is out of work, and gets help with their mortgage payments under UC of (say) 400/month - if they are able to get part-time work at 50/week - will stop being entitled to any help with their mortgage at all.

Home owners with mortgages, are meant to take out insurance that will pay their mortgage if they lose their job.

Under the present system with SMI: the payment they are given from the welfare state, might not cover all their monthly mortgage payment and will stop after 2 years anyway.

I assume insurance policies will have a time limit for the unemployed too, or else many would not bother to work if the payments were never ending.

Even under the welfare reforms, there will still be a time limit for mortgage payments help from the welfare state. The fact that all mortgage help will stop if they find any work; even for a few hours; is to encourage more home owners to do the right thing and take out insurance. It's money well spent for those with a mortgage and part of parcel of being a home owner..

The government have already (rightly) stated that it is unfair to ask others to pay your mortgage, when many of those paying your mortgage can't afford to buy their own home and have their own families (and insurance policies) to pay for.

rogerblack

MissMoneypenny wrote: »

The government have already (rightly) stated that it is unfair to ask others to pay your mortgage, when many of those paying your mortgage can't afford to buy their own home and have their own families (and insurance policies) to pay for.

Unfortunately, I can't lay my hands on it at the moment, but recall research that came to the not wholly surprising conclusion that homeowners who relied on SMI had in general paid lots more in contributions than the average.

tinkledom

MissMoneypenny wrote: »

Home owners with mortgages, are meant to take out insurance that will pay their mortgage if they lose their job.

Under the present system with SMI: the payment they are given from the welfare state, might not cover all their monthly mortgage payment and will stop after 2 years anyway.

I assume insurance policies will have a time limit for the unemployed too, or else many would not bother to work if the payments were never ending.

Even under the welfare reforms, there will still be a time limit for mortgage payments help from the welfare state. The fact that all mortgage help will stop if they find any work; even for a few hours; is to encourage more home owners to do the right thing and take out insurance. It's money well spent for those with a mortgage and part of parcel of being a home owner..

The government have already (rightly) stated that it is unfair to ask others to pay your mortgage, when many of those paying your mortgage can't afford to buy their own home and have their own families (and insurance policies) to pay for.

There well may be a time limit for those claiming IB JSA, but from memory those claiming IB ESA and Guaranteed Pension Credit, there is no time limit.
I wonder why?

MissMoneypenny

rogerblack wrote: »

Unfortunately, I can't lay my hands on it at the moment, but recall research that came to the not wholly surprising conclusion that homeowners who relied on SMI had in general paid lots more in contributions than the average.

If they have been paying in lots more than the average, then they would have already paid off their mortgage and not needed SMI.

danielanthony

MissMoneypenny wrote: »

If they have been paying in lots more than the average, then they would have already paid off their mortgage and not needed SMI.

Are you hard of thinking?

I pay lots in income tax but my mortgage isn't paid off as I'm 34 and have a 30 year mortgage. I pay about £1700 per month in income and council taxes and so if I lost my job tomorrow do you not think I should be entitled to more support than someone who has contributed nothing or very little throughout their working lives?

Also, SMI only covers mortgage interest, not capital repayment so the amount owed to the bank remains the same. This interest payment will be lower than the rent on the same property, so again, saving the government money compared to those who don't work hard enough to buy themselves a house (my wife and I bought our 1st house in 2009 with a deposit we saved for ourselves with NO help from either parents).