Part Time Universal Credit

atlantis187

Is it fair to say if you have no housing costs and on a fairly low wage (minimum income) and have the full work allowance £512 then you are not much better of working full time compared to part time?

poppy12345

Well. it will depend on how much earnings they receive during their assessment period and no one can really answer that question.

Use a benefits calculator and it will tell you.

Spoonie_Turtle

Interesting. You've got me curious. Of course any circumstances are going to be individual, but I tried a hypothetical:

Let's say single person, 1 child, no housing costs and therefore full work allowance

Standard allowance 409.89 + child element 235.83 = maximum entitlement 645.72

Working part-time, earns 512 (for the sake of simplicity) = no deduction for earnings = total income 645.72+512 = 1157.72

Working full-time, earns double above, 1024. Disregard 512 so deduction 512x0.63 = 322.56
Therefore total income 1024 + (645.72-322.56) = 1024+323.16 = 1347.16

So in this purely hypothetical scenario (the 512 PT earnings were roughly what I used to earn working 15hrs, double at 30hrs is not implausible) they would be working double for just under £200 ... Yeah. It does pay to work but it doesn't always pay very well

If they worked 23.5hrs (1.5x15, I can't work it out for 24 or 25hrs right now!!) they'd end up with a total income of 1252.44 1157.72 which is a bit scary - working half the hours again for literally nothing. Of course people with help with rent would have the lower work allowance so the differences would be greater; I've used up my brainpower now so I don't know if that's a good or bad thing.

Oops, edited incorrect calculation.

atlantis187

I'm looking at going back to work soon but part time not because of benefits but mainly due to health reasons. so this got me thinking.
If I went back to work full time like before earning roughly £1450 a month working 37 hours with 4 kids wife not working we would get:
Standard: £507
4 Kids:£986
Monthly UC: £1493.
Work: £1450 - £512 = £938x0.63 = £590
£1493- £590 = £903 (UC) + £1450 (Wage) = Total £2353

Me working part time 12 hours a week earning £550 a month wife working 8 hours a week earning £250 a month
Standard: £507
4 Kids: £986
Monthly UC: £1493
Work combined: £800 - £512 = £288x0.63 = £181
£1493 - £181 = £1312 (UC) + £800 (Wage) = Total £2112
So basically going from me only working full time 37 hours a week to working 20 hours combined between me and my wife we are only roughly £241 worse off.

Just to say we are not currently on UC and still on tax credits so these are just rough calculation for indication.
 

Spoonie_Turtle

Just FYI, you won't automatically get 4 x child element, it depends on when they were born.
https://www.gov.uk/guidance/universal-credit-and-families-with-more-than-2-children-information-for-claimants

calcotti

Spoonie_Turtle said: Working part-time, earns 512 (for the sake of simplicity) = no deduction for earnings = total income 645.72+512 = 1157.72

the. 512 PT earnings were roughly what I used to earn working 15hrs

If they worked 23.5hrs (1.5x15, I can't work it out for 24 or 25hrs right now!!) they'd end up with a total income of 1157.72 which is a bit scary - working half the hours again for literally nothing. 

That can’t be right. If they work extra hours they will keep 37p in every £1 they earn above the Work Allowance so will be better off, albeit the rate of pay for those extra hours is low.

Worth noting too that with legacy benefits (other than Tax Credits) there is a (small) fixed disregard so there is almost no financial gain from work and the intention of the tapered deduction is to create some benefit from work (coupled of course with the sanction regime etc.).

atlantis187

Spoonie_Turtle said:

Just FYI, you won't automatically get 4 x child element, it depends on when they were born.
https://www.gov.uk/guidance/universal-credit-and-families-with-more-than-2-children-information-for-claimants

They were all born before April 2017

Spoonie_Turtle

atlantis187 said:

Spoonie_Turtle said:

Just FYI, you won't automatically get 4 x child element, it depends on when they were born.
https://www.gov.uk/guidance/universal-credit-and-families-with-more-than-2-children-information-for-claimants

They were all born before April 2017

An you're okay then I think

calcotti said:

Spoonie_Turtle said: Working part-time, earns 512 (for the sake of simplicity) = no deduction for earnings = total income 645.72+512 = 1157.72

the. 512 PT earnings were roughly what I used to earn working 15hrs

If they worked 23.5hrs (1.5x15, I can't work it out for 24 or 25hrs right now!!) they'd end up with a total income of 1157.72 which is a bit scary - working half the hours again for literally nothing. 

That can’t be right. If they work extra hours they will keep 37p in every £1 they earn above the Work Allowance so will be better off, albeit the rate of pay for those extra hours is low.

Worth noting too that with legacy benefits (other than Tax Credits) there is a (small) fixed disregard so there is almost no financial gain from work and the intention of the tapered deduction is to create some benefit from work (coupled of course with the sanction regime etc.).

WHOOPS! *facepalm* you're absolutely correct, I must have missed the 63% in the calculation (this is exactly why I showed my working for the other hypotheticals but I was really flagging by this one). I make it an income of 1252.44 so yes, a small increase for half the hours again. My hypothetical situations are sort of moot with the OP having their own specifics now but I'm very glad you picked up on it!

calcotti

Spoonie_Turtle said:...t I was really flagging by this one). 

Thinking about benefit system can have that result!