switching from usual benefits to UC - advice please

lauram25

Hi,

I currently work part time and receive some HB, CB, WTC, and CTC. I may be upping my hours at work so did an online calculation. It worked out that I would be £10 a week better off if i switched to UC.

Ive heard mixed reviews about this and so I'm after some advice.

Is the waiting period long as I couldnt afford to be without money for a long period of time, especially because I private rent and my landlord wouldnt be happy about that.

Does it really work out better off being on UC? just after some honest feedback please

Alice_Holt

Five week waiting period for UC.

But only a two week HB run on.

CB not affected.

What is the value of the 5 weeks worth of amended TC's and 3 weeks HB ?
How many weeks UC till you break even?

How frequently are you paid. Will you have UC assessment months which encompass 2 pay periods (so potentially no UC paid)?

Will your earned income put you in the situation where your UC work coach expects you to seek additional work?

Remember TC is calculated by income over the financial year, have you used your 2019/2020 income estimate?
https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/calculating-tax-credits/

Worth checking several benefit calculators:
https://www.entitledto.co.uk/
https://benefits-calculator.turn2us.org.uk/AboutYou
https://www.betteroffcalculator.co.uk/#/free

and double checking the numbers.
Since having made a UC claim, there is no returning to legacy benefits.


https://www.citizensadvice.org.uk/Global/CitizensAdvice/welfare%20publications/Making%20a%20Universal%20Credit%20claim%202018%20-%20final.pdf

Informed by local CAB's experience with helping UC claimants July 2018.
Conclusion on page 33.

lauram25

i have no idea how to answer all the questions you had in your reply as ive used 2 different calculators and got very different replies. I think its because of last years income.

2018-2019 I was mainly self employed for 18 hours per week but havent needed to submit my self assessment for this period yet so i estimated the figures, I need to get an accurate figure for this i think as its probably what is messing with the figures.

I stopped being self employed on 23rd April 2019 and started paid employment for 3 days a week, 16 hours per week at £9 per hour.

I have now been asked to possibly up my days to 4 days a week, 24 hours a week at £9 per hour.

If i am losing 3 weeks worth of HB by switching to UC then i couldnt afford to do this as it would mean losing £388.56. So I dont get this back paid then?
So is it a case if i switch to UC, i get a 2 week run on from HB and then i lose 3 weeks of HB?

I dont think i would lose much in tax credits as I am only increasing my weekly hours by 6.

I get paid weekly.

I dont know what the work coach is or what the minimum amount required is.

calcotti

lauram25 wrote: »

If i am losing 3 weeks worth of HB by switching to UC then i couldnt afford to do this as it would mean losing £388.56. So I dont get this back paid then?
So is it a case if i switch to UC, i get a 2 week run on from HB and then i lose 3 weeks of HB?

You will not lose 3 weeks HB by switching to UC. Your HB will continue for 2 weeks from the start of any UC claim. You will normally receive your first UC payment 5 weeks after you make the claim so there is a 3 week gap but this payment is for the month that starts from the day you claim. You actually get paid your housing help twice for the first two weeks. If you need to you can get an advance when you claim UC but this has to be paid back over the next 12 months so you get less in future payments.

lauram25

Geez this is all confusing isnt it.

The first reply I got made it sound like I would be losing 3 weeks hb so If i applied for uc on 1st November I would get a 2 week payment of hb whenever it is normally due and then I'd get my first uc payment around first week of December?
Just giving example of dates so I'm clear.

Thank you

calcotti

If you claim UC on 1st November you will be paid HB up to 14th November. You will receive 1st UC payment on 7th December - this UC payment will be for period 1st November to 30th November and will include help with rent for that whole period.

Your entitlement to Tax Credits will end on 1st November.

calcotti

Apart from the amount of money you receive you need to think about the fact that UC will pay you one monthly payment whereas your tax credits and HB no doubt come at different times. Managing UC will be done on line not just once a year like Tax Credits. On the other hand UC should adjust as your earnings change whereas with Tax Credits you sometimes endup with an overpayment or underpayment.

Alice_Holt

lauram25 wrote: »

Geez this is all confusing isnt it.

The first reply I got made it sound like I would be losing 3 weeks hb so If i applied for uc on 1st November I would get a 2 week payment of hb whenever it is normally due and then I'd get my first uc payment around first week of December?

Yes it is confusing!

In terms of cashflow, you will have no help with housing payments for the period after 14th Nov and the first UC payment on 7th Dec.
So that is 3 weeks when you will need to find the money in full to settle your rent.

Again looking at cashflows.
Tax credits are paid 4 weekly, and it should be possible for you to estimate what you final TC payment would be (based on the entitlement ending on 1st Nov [in your example]), and when.
There will then be a gap until your UC payment arrives on 7th Dec.

Do you have savings to tide you over these periods?
And, going back to my earlier post, how long till the extra UC you receive would replenish those savings back to their original amount pre UC claim?

I'm suggesting that it's not just the absolute values that you need to look at. Cashflow is very important.
It is worth charting out future cashflow (with HB and TC payment dates and amounts) to check that claiming UC wouldn't cause financial hardship in the immediate future.

(When Iain Duncan Smith designed UC to be paid monthly in arrears, this attempt to "prepare people for the world of work", rather assumed everyone was paid monthly (like MP's) and had sufficient savings build up to act as a buffer between payment dates.)

calcotti

Alice_Holt wrote: »

In terms of cashflow, you will have no help with housing payments for the period after 14th Nov and the first UC payment on 7th Dec.
So that is 3 weeks when you will need to find the money in full to settle your rent.

Whether or not this is a problem depends on whether OP currently receives HB weekly or every 4 weeks.

There will undoubtedly be changes to cash flow during any switch over and I completely agree this is an essential consideration. The impact of any immediate cash flow disruption can be lessened by taking a UC advance but this means reduceauments for the next 12 months which is then detrimental to cash flow.

lauram25

I receive hb 2 weekly at the minute
Wages weekly
Tax credits weekly

Alice_Holt

Another factor to consider (have you looked at the report I linked to?) is that a minority of UC claims fail to pay the correct amount on the first due date. This is often due to tenancy agreements not being processed in time (or correctly), and the housing element not being paid (or paid incorrectly).
A further complication is that the UC housing element is not itemised to show how it has been calculated. Establishing if the correct amount has been paid, is even more difficult than HB - and requires a detailed knowledge of LHA's, room allowances, etc to work backwards to check the DWP calculation.