Benefit cuts question re TC and UC

sunshine1980

Please could someone help. I am a single mum to a school age child and work earning £10,450. I have been on one of the calculators which says I will be £1,515 worse off from April next year. Fair enough. However I have read the following in The Independent:


"From April 2016 the level at which a household's tax credits are withdrawn for every extra pound earned will be reduced from £6420 to £3850. For Universal Credit, which is replacing six working life benefits including tax credits, the figures will be £4764 for those without housing costs and £2304 for those with housing costs".


I am assuming "housing costs" means housing benefit? I do claim some housing benefit. If so will I be even more worse off when I get transferred onto UC? Does anyone know about how much? Also is there some transitional protection when moved over to UC or will the withdrawal level of £2304 come into effect immediately?


Thank you.

Icequeen99

sunshine1980 wrote: »

Please could someone help. I am a single mum to a school age child and work earning £10,450. I have been on one of the calculators which says I will be £1,515 worse off from April next year. Fair enough. However I have read the following in The Independent:


"From April 2016 the level at which a household's tax credits are withdrawn for every extra pound earned will be reduced from £6420 to £3850. For Universal Credit, which is replacing six working life benefits including tax credits, the figures will be £4764 for those without housing costs and £2304 for those with housing costs".


I am assuming "housing costs" means housing benefit? I do claim some housing benefit. If so will I be even more worse off when I get transferred onto UC? Does anyone know about how much? Also is there some transitional protection when moved over to UC or will the withdrawal level of £2304 come into effect immediately?


Thank you.

Are you thinking you are worse off because it looks like you would go from the 3850 threshold in tax credits to 2304 in UC?

IQ

sunshine1980

Hi IQ. Yes that is how I have read it. Do you think that is the case? I can manage with the £1515 cut next year but anymore and I am a bit worried! Thanks

mejaa

From what you have wrote we would be better off on uc as we have no housing costs .
But I also read if you move onto uc voluntarily then no transitional protection is offered. So you lose out eihter way
Absolute disgrace. Total screwed up system. So much for the goverment wanting to help workers...total bullsh*t.

Icequeen99

sunshine1980 wrote: »

Hi IQ. Yes that is how I have read it. Do you think that is the case? I can manage with the £1515 cut next year but anymore and I am a bit worried! Thanks

You can't really compared the two - tax credits are based on gross income and taper at 48% above the threshold.

UC is based on net income and tapers at 65% above the threshold.

So it doesn't follow that you will be worse off because the UC work allowance is less than the new WTC threshold - they are not the same thresholds because UC is calculated differently.

IQ