Universal Credits

renegadefm

Hi,
Someone I know had their Universal Credit stopped because they did a few hours overtime which lead them over the threshold of doing 16 hours a week, so Universal Credits learned of the increase of hours even though it was only a few hours extra.
My question could they avoid going over the 16 hours by contributing more to their pension, so in affect if they for example increase their pension contribution by an amount that would absorb any overtime money?
This would of course leave the person short on the weeks they dont do overtime, but at least they wouldn't lose their Universal Credits.
So is my theory workable?

Marcon

No. The issue is the number of hours worked. 'Absorbing' the money, as you put it, isn't going to be something an employer is going to lie about.

renegadefm

Marcon, no I dont mean they are going to lie or do anything unjust.
I merely mean if they legitimately increase their pension contribution in affect they would be taking home less than 16 hours worth of wages.
I just need to know if this is possible in laymans terms.

zagfles

Pension contributions are deductable for UC, but it sounds like you/they don't understand how it works. UC doesn't stop at 16 hours, see https://www.gov.uk/government/publications/universal-credit-work-allowances/universal-credit-work-allowances

Silvertabby

Hmm - why am I reminded of a lady who worked part time (16 hours per week) in our office. She didn't have young children, and was always complaining about being 'hard up' - so our office manager thought she'd be pleased to be offered a permanent full time contract, on quite a bit more than minimum wage.

She turned it down, on the grounds that 'the Government wouldn't let her work for more than 16 hours or she would lose her benefits'.

JoeCrystal

Silvertabby wrote: »

Hmm - why am I reminded of a lady who worked part time (16 hours per week) in our office. She didn't have young children, and was always complaining about being 'hard up' - so our office manager thought she'd be pleased to be offered a permanent full time contract, on quite a bit more than minimum wage.

She turned it down, on the grounds that 'the Government wouldn't let her work for more than 16 hours or she would lose her benefits'.

Why I am not surprised. :mad:

renegadefm

Zagfles, so basically its the hours they work not take home pay?
Thats all I need to know so I can tell them.
The problem they have is their employer keeps asking them to work on an extra hour every so often which they find hard to refuse. But its tipped them over the threshold and their Universal Credits have been stopped and are now struggling.
This to me is where the system is all wrong because they are penalised for doing overtime to help their employer out and are now worse off.

JoeCrystal

renegadefm wrote: »

This, to me is where the system is all wrong because they are penalised for doing overtime to help their employer out and are now worse off.

Not particularly, it is to encourage people to work after all. Although I do find the Universal Credits quite baffling with their sixteen-hour limit although pension contribution can slightly increase the Universal Credit itself I believe.

zagfles

renegadefm wrote: »

Zagfles, so basically its the hours they work not take home pay?

Err...no. Read what I wrote and the link I posted.

Thats all I need to know so I can tell them.
The problem they have is their employer keeps asking them to work on an extra hour every so often which they find hard to refuse. But its tipped them over the threshold and their Universal Credits have been stopped and are now struggling.
This to me is where the system is all wrong because they are penalised for doing overtime to help their employer out and are now worse off.

That's what UC was designed to stop!! Tax credits and JSA have these cliff edge thresholds, UC doesn't. I think there might be an exception if getting mortgage interest support, but not sure about that.
Post on the benefits board for more info.

zagfles

Silvertabby wrote: »

Hmm - why am I reminded of a lady who worked part time (16 hours per week) in our office. She didn't have young children, and was always complaining about being 'hard up' - so our office manager thought she'd be pleased to be offered a permanent full time contract, on quite a bit more than minimum wage.

She turned it down, on the grounds that 'the Government wouldn't let her work for more than 16 hours or she would lose her benefits'.

That was probably tax credits where for a lot of people 16 hours was the sweet spot as that was when WTC kicked in, and working more results in a 73% effective tax rate. The Laffer curve, I think they call it

renegadefm

The person is a chef at a school and their wages are payed by an outside employer called Aspire.
The problem is their hours are worked out at 16 hours as they are only needed a couple hours a day and has one dependant child, so the Universal Credits they got helped a great deal.
But every so often they are asked to work an extra hour, but they didnt think it would affect their Universal Credits, but it did, so thats what I meant by they are basically penalised for helping the boss and doing overtime.
I just had this idea if they had less in their wages and contributed more to their pension it would bring down what they have in their take home pay so they can reclaim Universal Credit. I just need a straight answer yes or no.