2016 benefits changes for working people?

zagfles

NYM wrote: »

This confuses me so much !

So if someone loses their job through redundancy, they aren't entitled to claim unemployment benefits under UC because they may have earned too much before that redundancy ?

I'm totally confised too. Looking at the regulations, it seems to have mis-defined the "nil-rate UC threshold"!!

http://www.legislation.gov.uk/uksi/2015/345/made

“the nil UC threshold” is the amount of total earned income above which there would be no entitlement to universal credit, expressed by the following formula—
(M −U)x100 +WA
where—

M is the maximum amount of an award of universal credit(a);
U is unearned income(b);
WA is the work allowance(c),

This is complete rubbish, that would make the "nil-rate UC threshold" massive! And virtually no-one would be affected!

There should be a divide by 65 there ie (M −U)x100/65 +WA

Surely the govt haven't made such a basic error in legislation?? Or am I missing something?

nannytone_2

NYM wrote: »

This confuses me so much !

So if someone loses their job through redundancy, they aren't entitled to claim unemployment benefits under UC because they may have earned too much before that redundancy ?

if they had such a large redundancy payment that it ruled out universal credit, then they would have paid sufficient NI contributions to entitle them to conts based JSA, which isn't being replaced by universal credit

Weary_soul

http://www.rightsnet.org.uk/forums/viewthread/7317/

It means income in excess of the amount required to extinguish your UC entitlement, plus £100 a month.

To take the most straightforward example of a single person with no housing costs. Their maximum UC is 314.67 a month. They have an earnings disregard (“work allowance”) of £111 a month and any earnings above that are tapered at 65%. So for that person to lose UC they need to have earnings of 314.67/65*100 + 111: £595.11 a month. So surplus earnings in such a case would mean anything in excess of £695.11 a month.

zagfles

Weary_soul wrote: »

http://www.rightsnet.org.uk/forums/viewthread/7317/

It means income in excess of the amount required to extinguish your UC entitlement, plus £100 a month.

To take the most straightforward example of a single person with no housing costs. Their maximum UC is 314.67 a month. They have an earnings disregard (“work allowance”) of £111 a month and any earnings above that are tapered at 65%. So for that person to lose UC they need to have earnings of 314.67/65*100 + 111: £595.11 a month. So surplus earnings in such a case would mean anything in excess of £695.11 a month.

That's right (although they changed the excess to £300 after the consultation instead of £100, and for people with housing costs and/or kids they'd need to earn considerably more to be affected).

However, the legislation itself quotes the formula without the divide by 65!!

Batman_100

benniebert wrote: »

That sounds quite reasonable. And I would add that if you are monthly paid, the salary should be treated as a payment to take you through the next month.
I was interested in this particular situation a while ago. I was looking at the Pension Credit regulations with regards to when you could claim. It seemed that you could claim from the following day after receiving your last monthly salary payment. In other words you have twice the money for the first month.
As an example if you finished work on the 30th April and received your final monthly salary payment, you could start to claim GPC as from the 1st May. No account was taken other than of capital of that final salary payment.
Additionally if you were receiving a monthly salary well above what would be said to be a standard living cost, it would be right to assume that that excess would/should have been saved.

That's still sound incredibly unfair to me. I'm not too knowledgable about UC as it hasn't been introduced in my area yet. But is the unemployment component still decided into income based and contribution based components like JSA is? Surely this would only apply to income based UC?

So would it be the case that if I'd saved up my hard earned money to take my family on the holiday of a lifetime to America (which I hope to do at some point) and come home to find a redundancy notice on the doormat I wouldn't be entitled to any help of the state because I'd recently made an extravagant piece of expenditure when I had no idea I was about to be made redundant. That doesn't sound right. Surely I'd still be able to claim contribution based benefits if I'd paid enough NIC's?

And surely it can't be right that people should have to weigh up making larger purchases on luxury items (which they're perfctly entitled to make against the possibility of future unemployment, something which they can't foretell? Do the government expect us to all get crystall balls so we can predict these things?

I guess it all goes back to the governments advice to keep at least 6 months worth of outgoings in your savings at all times to cover any sudden loss of income. But where's the public information campaign to educate people about this? What about the millions of people who live hand to mouth and have no savings, or only negligible savings?

So are they're serioisly millions of people out there who are blissfully unaware of this and think they'd still be eligible for help from the state if they lose their job, when actually they'd be left destitute?

Rant over!

p00hsticks

Batman_100 wrote: »

That doesn't sound right. Surely I'd still be able to claim contribution based benefits if I'd paid enough NIC's?

It isn't. As nannytone has said previously, UC only replaces means tested benefits. If you've got the correct NIC benefits, you'll still be claiming contributions based JSA rather than UC if you get made redundant

Batman_100

p00hsticks wrote: »

It isn't. As nannytone has said previously, UC only replaces means tested benefits. If you've got the correct NIC benefits, you'll still be claiming contributions based JSA rather than UC if you get made redundant

So presumably when Contribution based JSA comes to an end after 6 moths and you get transferred to UC, they will only look at your finances going back 6 months to when your JSA claim started.


So in other words, if you've paid enough NIC's to qualify for Contribution based JSA you won't need to worry about large amounts of money going out of your bank account whilst you were still in work.


Have I got this right?

rogerblack

Batman_100 wrote: »

So in other words, if you've paid enough NIC's to qualify for Contribution based JSA you won't need to worry about large amounts of money going out of your bank account whilst you were still in work.


Have I got this right?

Not quite.
The regulations do not as I understand them care at all about how much you spend, only how much you earned.
If this is considerably over your entitlement to UC - including housing costs - then the 'surplus earnings' provisions may kick in, and you be not entitled to UC for a period.

It does not matter if the reasons you spent this money were entirely reasonable.

zagfles

rogerblack wrote: »

Not quite.
The regulations do not as I understand them care at all about how much you spend, only how much you earned.
If this is considerably over your entitlement to UC - including housing costs - then the 'surplus earnings' provisions may kick in, and you be not entitled to UC for a period.

It does not matter if the reasons you spent this money were entirely reasonable.

I really don't think this will affect many people, certainly not people with housing costs going in and out of low paid work.

Say someone with 2 kids would have had a £1500pm UC award (inc housing) when unemployed. In order to affected by this, they have had to earn over £2870pm take home while working, so gross salary of over £46k pa!!

For a single person with a £750pm UC award (inc housing) they'd have had to take home over £1564 to be affected, so the job would have had to pay over £23k pa.

The only people on low paid likely to be affected are single people with no housing costs who haven't got enough of an NI record for contribution based JSA.

Besides which, as above, the govt have got the legislation wrong so virtually nobody will be affected

rogerblack

zagfles wrote: »

I really don't think this will affect many people, certainly not people with housing costs going in and out of low paid work.

200000 is a credible estimate.