Part Time Universal Credit

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?

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  • poppy12345
    poppy12345 Posts: 17,815
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    edited 30 April 2020 at 10:54PM
    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
    Spoonie_Turtle Posts: 8,267
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    edited 1 May 2020 at 1:55PM
    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 :confused:

    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
    atlantis187 Posts: 1,432
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    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
    Spoonie_Turtle Posts: 8,267
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    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
    calcotti Posts: 15,696
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    edited 1 May 2020 at 6:16AM
    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.).
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • atlantis187
    atlantis187 Posts: 1,432
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    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
    Spoonie_Turtle Posts: 8,267
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    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
    calcotti Posts: 15,696
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    edited 1 May 2020 at 2:00PM
    Spoonie_Turtle said:...t I was really flagging by this one). 
    Thinking about benefit system can have that result!
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
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