Currently receiving Tax Credits. Move to Universal Credit?

thinfatwhiteduke

Hi everybody.
I'm self employed and due to low income, I'm currently receiving tax credits (about £53 per week). I've seen that I cannot apply for Housing Benefits anymore so I was wondering if with Universal Credit I could receive something extra to cover the rent.
I know that I would have to give up Tax Credits and completely move to Universal Credits.
I'm not sure if I'm wrong but it really scares me the idea that I could end up receiving even less.
Any idea/help/advice?
Thank you.

[Deleted User]

thinfatwhiteduke wrote: »

Hi everybody.
I'm self employed and due to low income, I'm currently receiving tax credits (about £53 per week). I've seen that I cannot apply for Housing Benefits anymore so I was wondering if with Universal Credit I could receive something extra to cover the rent.
I know that I would have to give up Tax Credits and completely move to Universal Credits.
I'm not sure if I'm wrong but it really scares me the idea that I could end up receiving even less.
Any idea/help/advice?
Thank you.

Not something I'd do if self employed given the strict rules on self employment income. You may be entitled to far less than you than you are getting now.

Alice_Holt

Do some research on the minimum income floor under UC.
https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

Then try putting various scenarios into a benefits calculator to see the likely UC payments.
https://www.entitledto.co.uk/

thinfatwhiteduke

According to the calculator I could get more money. I'm just afraid to move to UC. What if the calculator is wrong? It would be crazy if I end up getting less. It wouldn't make any sense. Can anybody help clarifying?

Alice_Holt said:

Do some research on the minimum income floor under UC.
https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

Then try putting various scenarios into a benefits calculator to see the likely UC payments.
https://www.entitledto.co.uk/

thinfatwhiteduke

_shel said:

thinfatwhiteduke wrote: »

Hi everybody.
I'm self employed and due to low income, I'm currently receiving tax credits (about £53 per week). I've seen that I cannot apply for Housing Benefits anymore so I was wondering if with Universal Credit I could receive something extra to cover the rent.
I know that I would have to give up Tax Credits and completely move to Universal Credits.
I'm not sure if I'm wrong but it really scares me the idea that I could end up receiving even less.
Any idea/help/advice?
Thank you.

Not something I'd do if self employed given the strict rules on self employment income. You may be entitled to far less than you than you are getting now.

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

poppy12345

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

Have you read the link that Alice posted above? Here it is again, please do have read. If you're subject to the minimum income floor, you could be worse off, regardless of what the benefit calculator says. Difficult to advise when you've not given any information about your circumstances. https://www.gov.uk/government/publications/universal-credit-and-self-employment-quick-guide/universal-credit-and-self-employment-quick-guide

thinfatwhiteduke

I found this example on https://www.moneyadviceservice.org.uk/

'Sarah has worked as a self-employed hairdresser for two years. She is aged 25 and is expected to work 35 hours a week.

The National Living Wage for her age group is £7.83.

Her minimum income floor is worked out like this:

• 35 × £7.83 = £274.05 per week
• £274.05 × 52 weeks = £14,250.60 per year
• £14,250.60 ÷ 12 months = £1,187.55 per month
• Income tax, Class 2 and Class 4 National Insurance contributions would then be deducted from £1,187.55 to arrive at the minimum income floor.
• On this amount, deductions would be £12.35 per month based on Class 2 NI contributions (for tax year 2018/19 these are £2.85 per week).
• £1,187.55 - £12.35 = £1,175.20
• This is the minimum amount the DWP expects Sarah will earn each month and her payment will be based on an income of £1,175.20.
• If she earns more than this, her Universal Credit payment will go down by 63p for every £1 she earns unless she qualifies for the Work Allowance.
• If she earns less than this, she won’t get any more Universal Credit to make up the difference.

I don't understand the example very well. If she earns less than £1,175.20 , she will not get any Universal Credit money at all? If she earns more she, will earn 63 p for every £1. So if you earn more you get something, if you earn less you get nothing. It doesn't make any sense.

Alice_Holt

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

 You clearly haven't understood  the link I posted some 9-10 months back on the how the Minimum Income Floor affects the self-employed when claiming UC.
Here you are:  
"When you are self employed and you claim Universal Credit, you are treated as if you are earning a certain amount. This amount is called the 'minimum income floor'.

If the minimum income floor applies to you and you earn below this level in any month, you are treated as earning the minimum income floor.

If you are earning more than the minimum income floor, your actual earnings are taken into account instead."

The minimum income floor is the equivalent of someone working full time (35 hours per week unless you have other responsibilities) on the National Minimum Wage for your age group."


 Of course "they" won't warn you. 

It is designed to deter people from claiming benefits when their self-employment efforts are insufficient to provide them with a living wage.  The government are, in effect, pushing you to find better full-time paying employment rather than playing at self-employment,

Tax Credits have a similar test, which is likely to catch up with you. Read this link:
https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/gainful-self-employment/
The government's reasoning behind these rules is that "they" are trying to stop the "trap" whereby the tax-payer subsidies non gainful self-employment. You may not agree with this, but this is their thinking.

calcotti

thinfatwhiteduke said:

What do you mean? If I'm entitled to far less, than they should warn me against it once they review my application, otherwise it wouldn't make any sense. It would just be like a trap from the government.

The DWP will not warn you about anything before you claim. They will not tell you what you may get before you apply. The DWP  administer the benefits system, they are not benefits advisers. Once you have applied there is no going back.

calcotti

thinfatwhiteduke said:

I don't understand the example very well. If she earns less than £1,175.20 , she will not get any Universal Credit money at all? If she earns more she, will earn 63 p for every £1. So if you earn more you get something, if you earn less you get nothing. It doesn't make any sense.

That's not what the example says. It says that if she earns less than £1,175.20 she will still be treated as if she does. If she earns more than £1,175.20 she will be treated as earning the actual amount she earns. Whether or not there is any UC entitlement will depend on what her potential maximum UC is.
If you do not understand what you are reading I suggest you go to an advice agency and ask them to go through your circumstances and explain your options.

thinfatwhiteduke

Tax Credits have a similar test, which is likely to catch up with you. Read this link:
https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/gainful-self-employment/
The government's reasoning behind these rules is that "they" are trying to stop the "trap" whereby the tax-payer subsidies non gainful self-employment. You may not agree with this, but this is their thinking.

What do you mean? There is not mention of Tax Credits in your link.