2016 benefits changes for working people?

rogerblack

Batman_100 wrote: »

OK, so how do these surplus earnings provisions work?


And does this apply to contribution based JSA as well as UC?

It only applies to universal credit.
My understanding:

If, in any month you earn more than 300 pounds over the limit at which you would be paid universal credit, then those 'surplus' earnings are assumed to be saved, and usable in case work does not continue. (for up to 6 months)
For a single claimant with no housing costs, this would be a job earning over 900/month. (11K/year).

If they get a job for 15K, then that's surplus earnings of 380/month or so.
If they keep the job for 3 months, that is a surplus earnings of 1100.

If they lose their job, they would normally (as a single person with no housing costs) be entitled to 300 pounds a month or so.
Every month after they lose their job, 300 pounds is deducted from the surplus earnings pot above, until it reaches the zero entitlement point - at about 900 pounds.

So, they go to reclaim UC, and for the first month are entitled to nothing.
For the second month, their surplus earnings pot is now at 900 pounds - they may get some pence.
The third month it's at 600 pounds, they may get around a quarter of their normal award.
The fourth month - because it's been 6 months since they claimed UC, their award will be back at 300/mo.

(round numbers, not taking into account tax).

Simple!

It gets _way_ more complex for couples that may meet or split up in the middle of this, as well as people having change of circumstances.

At least this policy is not being implemented straight away - it needs 'full' UC - with integration with HMRC for earnings to be implemented, and the full software to be available for UC - which is not even in the best case going to happen before 2017.

And yes, this policy means that those who get relatively short-term work, but with significant extra costs over their normal living costs on UC - say traveling a hundred miles to work - will be compelled to take that work, but then once they lose that job, through no fault of their own, will not be entitled to benefit - as they should have saved the 'excess' money - that they have largely spent on travel costs.

And remember.
The whole alleged policy intent here is not due to saying people should save. It's due to saying some people can manipulate their earnings and when they are paid in order to maximise UC.

How far do you think you'd get with most employers if you say you only want to be paid in May for the whole of the year?

zagfles

rogerblack wrote: »

It only applies to universal credit.
My understanding:

If, in any month you earn more than 300 pounds over the limit at which you would be paid universal credit, then those 'surplus' earnings are assumed to be saved, and usable in case work does not continue. (for up to 6 months)
For a single claimant with no housing costs, this would be a job earning over 900/month. (11K/year).

If they get a job for 15K, then that's surplus earnings of 380/month or so.
If they keep the job for 3 months, that is a surplus earnings of 1100.

If they lose their job, they would normally (as a single person with no housing costs) be entitled to 300 pounds a month or so.
Every month after they lose their job, 300 pounds is deducted from the surplus earnings pot above, until it reaches the zero entitlement point - at about 900 pounds.

So, they go to reclaim UC, and for the first month are entitled to nothing.
For the second month, their surplus earnings pot is now at 900 pounds - they may get some pence.
The third month it's at 600 pounds, they may get around a quarter of their normal award.
The fourth month - because it's been 6 months since they claimed UC, their award will be back at 300/mo.

(round numbers, not taking into account tax).

Simple!

It gets _way_ more complex for couples that may meet or split up in the middle of this, as well as people having change of circumstances.

At least this policy is not being implemented straight away - it needs 'full' UC - with integration with HMRC for earnings to be implemented, and the full software to be available for UC - which is not even in the best case going to happen before 2017.

And yes, this policy means that those who get relatively short-term work, but with significant extra costs over their normal living costs on UC - say traveling a hundred miles to work - will be compelled to take that work, but then once they lose that job, through no fault of their own, will not be entitled to benefit - as they should have saved the 'excess' money - that they have largely spent on travel costs.

And remember.
The whole alleged policy intent here is not due to saying people should save. It's due to saying some people can manipulate their earnings and when they are paid in order to maximise UC.

How far do you think you'd get with most employers if you say you only want to be paid in May for the whole of the year?

Though of course as pointed out above they could be entitled to contribution based JSA.

It's pretty easy to manipulate taxable earnings by the month eg through pension contributions (which are 100% deductible for UC), and it's probably right to put something in place to prevent this, but I would have thought that people who have actually lost their job should be exempted.

Anyway no-one need worry because the govt have got the legislation wrong

benniebert

Deleted%20User wrote: »

You know I agree with you and majority of your posts, but what does Sir think a Judge will make of this, you know when national minimum wage just doesn't pay all the bills, or you are underpaying them at minimum, but you haven't accessed the system - should we then try for euthanasia

Well let's go back in time to deal with that.


Up until I was in my late teens, the only thing that mattered was having enough money to give my mum for keep, enough for 3 nights out with the lads and enough to keep my sports car on the road. I was quite happy to plod along with my job.
Then I got married, then the children came along - I needed more money obviously. The nights out were stopped, the car was sold and a cheap banger was bought - £50 with 12 months T & T!!
I took on a night job to make ends meet - driving taxis 6 nights a week from 6pm to 2am. That meant that I was working 16 hours Mon - Fri and 8 on a Saturday - a total of 88 hours a week.
I changed my day job every 2/3 years at least to get a better wage.
From age 21 to age 35 we had one holiday - 1 week in a caravan on Anglesey cost £25. I can't recall the many times that I had to push the car to the nearest garage as I had run out of petrol.


In all of those years from when I got married the only benefit that my family claimed was Family Allowance.


In the whole of my life I have had 2 foreign holidays (Spain & France) and 8/9 on a caravan park.


Every penny that I earned went to support my wife and two children - I still wear a belt that I bought 48 years ago! I would not have claimed anything else even if it was there to take because to me that was failing my responsibilities to my family and myself I had pride in myself for getting there and pride in my country for giving my children a decent education and my family for keeping us all healthy.

cbrown372

benniebert wrote: »

I wouldn't call it shameful, I would call if British Pride. As you say no one cares what others think when they claim for every penny that they can get their grubby little mits on. Yes it does actually seem that society now views those that don't make claims to maximise their benefits as complete mugs. Thank God I still believe in British Pride and my country.

you do make me laugh Andy :rotfl::rotfl:

Batman_100

rogerblack wrote: »

It only applies to universal credit.
My understanding:

If, in any month you earn more than 300 pounds over the limit at which you would be paid universal credit, then those 'surplus' earnings are assumed to be saved, and usable in case work does not continue. (for up to 6 months)
For a single claimant with no housing costs, this would be a job earning over 900/month. (11K/year).

If they get a job for 15K, then that's surplus earnings of 380/month or so.
If they keep the job for 3 months, that is a surplus earnings of 1100.

If they lose their job, they would normally (as a single person with no housing costs) be entitled to 300 pounds a month or so.
Every month after they lose their job, 300 pounds is deducted from the surplus earnings pot above, until it reaches the zero entitlement point - at about 900 pounds.

So, they go to reclaim UC, and for the first month are entitled to nothing.
For the second month, their surplus earnings pot is now at 900 pounds - they may get some pence.
The third month it's at 600 pounds, they may get around a quarter of their normal award.
The fourth month - because it's been 6 months since they claimed UC, their award will be back at 300/mo.

(round numbers, not taking into account tax).

Simple!

It gets _way_ more complex for couples that may meet or split up in the middle of this, as well as people having change of circumstances.

At least this policy is not being implemented straight away - it needs 'full' UC - with integration with HMRC for earnings to be implemented, and the full software to be available for UC - which is not even in the best case going to happen before 2017.

And yes, this policy means that those who get relatively short-term work, but with significant extra costs over their normal living costs on UC - say traveling a hundred miles to work - will be compelled to take that work, but then once they lose that job, through no fault of their own, will not be entitled to benefit - as they should have saved the 'excess' money - that they have largely spent on travel costs.

And remember.
The whole alleged policy intent here is not due to saying people should save. It's due to saying some people can manipulate their earnings and when they are paid in order to maximise UC.

How far do you think you'd get with most employers if you say you only want to be paid in May for the whole of the year?

So let's so if I've got this right. Under UC, if you start a new job and come off benefits, it's wise not to spend more than £300 a month more than what you would would have been getting on benefits for the first 6 months. Otherwise you might get a nasty shock of you lose your job and need to make a rapid reclaim?

Weary_soul

This all sounds appauling.

To quote one of the CAB people on Rightsnet..

This is very worrying and does mean that the whole point of UC encouraging people to work is going to fall down as working will leave them vulnerable in the future. Very worrying

Exactly.

dktreesea

rogerblack wrote: »

And remember.
The whole alleged policy intent here is not due to saying people should save. It's due to saying some people can manipulate their earnings and when they are paid in order to maximise UC.

How far do you think you'd get with most employers if you say you only want to be paid in May for the whole of the year?

But that's the reality for a lot of self employed people with seasonal businesses, where they may earn all of their income in the couple of months leading up to Christmas.


Say you have a shop, rent £10k per annum. In November and December, you make a profit of £40k, but in the remaining ten months you lose £6k. So overall for the year you have a profit of £24k, enough to exclude you from the benefits system.


That works well, because your net profit is taken over a year. but under UC, even now with these new regulations, say you apply for UC in January. From January to June you get nothing, because you have surplus earnings from December. But from July onwards you get your full "entitlement", even though, under the current system, you'ld get nothing for the entire year.


It seems to me all this is doing is bringing into the benefits system's orbit a whole lot of people who currently aren't entitled to a dime. At least for self employed people, they should be considering the income over the previous 12 months, not just the last 6 months.

Spendless

benniebert wrote: »

In all of those years from when I got married the only benefit that my family claimed was Family Allowance.

If you were claiming in the days when it was called Family Allowance, you will have also had a better tax code due to being able to claim the married mans allowance and an amount for each child as previously mentioned.

Batman_100

dktreesea wrote: »

But that's the reality for a lot of self employed people with seasonal businesses, where they may earn all of their income in the couple of months leading up to Christmas.

Well then you really need to try and diversify the nature of your business. Many of the people who run seasonal business specialising in selling Christmas trees in November and December are the same people who specialise in selling parasols and BBQ's in July and August.


Maybe not all seasonal business are like this, but that's one of the key things I was taught about seasonal related business when I studied business at college.