Universal Credit 16k+ savings transistional protection?

CRITCHK

OK so nothing for the kids them. Now as a non tax payer I can only pay 3600 gross into my pension (as would not be able to obtain futher tax relief). Then get husband to pay say £7,200 gross into his which will reduce his income to around 7,500 and we would declare a combined income of just under 10k. Although I have read tax credit is reduced by 41p in the pound for income above (I think the figure is something like 5/6k) so maybe pay more into a pension to reduce income to that level? Per additional £100 pension contribution would cost £39 as £20 would be tax relief and £41 more from tax credits. Does that sound correct? Is this possible?

zagfles

Indie_Kid wrote: »

This may be classed as deprivation of capital and you may still be treated as if you have it.

There's no such thing as deprivation of capital when it comes to tax credits. There are notional income rules, but pension contributions are a specifically allowed deduction within (quite high) limits. It would be like claiming someone is dodging tax by using an ISA!

And I can't see how contributing to a pension now could be classed as deprivation of captial for UC given that there is planned transitional protection for UC for those with savings, and that it's unlikely to go live for those with children for a couple of years at least.

Indie_Kid

zagfles wrote: »

There's no such thing as deprivation of capital when it comes to tax credits. There are notional income rules, but pension contributions are a specifically allowed deduction within (quite high) limits. It would be like claiming someone is dodging tax by using an ISA!

And I can't see how contributing to a pension now could be classed as deprivation of captial for UC given that there is planned transitional protection for UC for those with savings, and that it's unlikely to go live for those with children for a couple of years at least.

I wasn't referring to the pension. But surely, giving money to your children in order to get around the UC rules regarding savings, is deprivation?

zagfles

Indie_Kid wrote: »

I wasn't referring to the pension. But surely, giving money to your children in order to get around the UC rules regarding savings, is deprivation?

Oops sorry went down the wrong track there...it's past my bedtime! I suppose that could be deprivation but again as there are transitional rules, so they'd have got UC even with the savings over £16k, I think it's unlikely. Pension would be safer and has the additional advantage of increasing tax credits now.

thor

bloolagoon wrote: »

They do if they work surely. Who isn't?

People with savings in ISAs for a start. These people claiming tax credits now will be worse off under UC, something IDS promised will not happen.
I do have to admit that I am making a big(but not unlikely) assumption here as I do not know what the tapering breakdown is but as the years go on people with savings will be getting less and less from UC

zagfles

thor wrote: »

People with savings in ISAs for a start. These people claiming tax credits now will be worse off under UC, something IDS promised will not happen.

Err... that's what transitional protection is for, as discussed in this thread. There are plenty of people who'd be worse off under UC but the promise was that TP would make them no worse off in cash terms.

MissMoneypenny

tinkledom wrote: »

I am talking about a council (my council) that changes the building plans midway through a development and without any consultation, tells the developer to scrap those 6 x 5 bed detached properties, you now have to build x number of low cost housing in their place. Totally wrong that they put them in the middle of an exclusive development.


The property owners that had bought pre this change bought on the strength that all of the surrounding properties would be similar to theirs. As it is now, their properties have been devalued and are having difficulty selling them on to get away from this mini council estate.


Hence why they are banding together as they are told that they have a case against the council for their losses. When the plans were agreed that is what should have been built - not have an 11th hour change that no one knew about. None would have bought if that information had been made available at the start of the development.

:rotfl:Where do you think the successful criminals/thugs, live? They don't live in social housing. They use their criminal activity proceeds to buy an expensive house on an "exclusive development".

MissMoneypenny

thor wrote: »

as the years go on people with savings will be getting less and less from UC

Benefits are for the sick and temporary help for the poor. If someone is healthy and has savings, then why should they be given benefits?

MissMoneypenny

zagfles wrote: »

That's not what it says in the Dec 2012 briefing note (not sure if there's a later one), it says (as one of the changes that ends TP)

"a sustained (3 month) earnings drop beneath the level of work that is expected of them according to their claimant commitment; "

So if earnings are already below the work requirement it doesn't sound like that would apply, or not unless earnings drop further anyway.

They key part there in your quote is "the level of work that is expected of them according to their claimant commitment; " When they claim UC, they will be told their 'level of work that is expected of them' in their UC claimant commitment. i.e. 35 hours per week at national minimum wage.

Therefore; if they are already below the work requirement (level of work that is expected of them) when they are moved onto UC and don't do anything to change that; then they only get 3 months transitional protection: because they have "a sustained (3 month) earnings drop beneath the level of work that is expected of them according to their claimant commitment; "

If they want to keep their transitional protection after those 3 months are up, then they have those 3 months maximum, to get up to their "level of work that is expected of them" in their UC claimant commitment, or they will lose their transitional protection. Although in reality, they have much longer than that "3 month": they have years (as claimants will be aware that these changes are coming in in the next few years).

Your quote doesn't say 'an earnings drop from what they were earning when they were moved onto UC'.

Makes sense when you think about it. If you were correct, then many claimants would continue to not work many hours/earn much money, just to keep their transitional protection benefits for years. Which would fly in the face of these welfare changes, which aim to get some people to do more to keep their families. i.e. the parents who at present, only work 24/30 hours a week between them and get the welfare state (other people) to make up their lost wages.

dktreesea

MissMoneypenny wrote: »

Another thing with Universal Credit, is the money you and your husband will be expected to earn per week to avoid the UC Conditions.

To avoid the UC Conditions: there will be no more of 2 parents only working 24 hours between them; no more self employed earning less than national minimum wage per hour; no more single parents with teenage children just working 16 hours per week: with benefits (Tax Credits) making up their lost wage.

This is incorrect for the self employed. They are free, always assuming the DWP agrees they are gainfully employed, to make as much or as little profit as they so desire.

For benefits calculation purposes they income will be the higher of their actual profit or deemed to be the amount of pay they would have received had they been working for the NMW for the required hours.

Even for solo parents only currently working 16 hours, all that will happen is their full benefit entitlement will be passported over to UC for the transitional period, however long that turns out to be, but they will also be subject to conditionality, i.e. will have to look for another 19 hours a week work ( if "full time" is the same as what is proposed for the self employed, i.e. 35 hours a week) on top of the 16 hours a week they now have.

I see the government's current plans are not to make the UC available across Britain until 2016 and not to migrate people on existing benefits until 2016/2017. https://www.gov.uk/universal-credit/overview

I wonder if that means the transitional protection will last until 2020/2021? At the rate they are going, or rather, not going, one wonders if anyone currently with children under the age of 16 will still have eligible children at the point they are transitioned to UC.