Moving to UC from WTC as lost job

threeintoone

Hello, my daughter ( and her son) live with me. She has been working  but her fixed term contract expired yesterday and wasn't renewed due to COVID. She has been receiving WTC but I understand that her claim will stop as she is no longer working. I can see that there is a 4 week run-on after your claim for WTC ends - but does that me she cannot claim UC until 4 weeks from today ?  The amount she will get from UC is much bigger than her current WTC claim ( as she isn't now working and she only received a small amount of WTC as had quite a well paid part time job).  She would be better off claiming UC straight away rather than having the WTC 4 week run on - but I'm not sure if she is allowed to claim straight away.  I would be very grateful if anyone knows.  She is looking for a new job but its not easy with a small child, school hours etc in the current climate. Thank you.

Spoonie_Turtle

Yes she can claim UC straight away; it will end her TC claim and she can't ever go back onto them so she needs to be absolutely certain UC is best even in the long run (if she has a child I assume she still gets CTC even once the WTC runs out?)

calcotti

(With a few very limited exceptions) anyone can claim UC at any time.

threeintoone

Thank you I'll tell her she can claim straight away.  Spoonie turtle I thought if you stop WTC then CTC stops too and it all moves to UC?  

calcotti

threeintoone said:

Thank you I'll tell her she can claim straight away.  Spoonie turtle I thought if you stop WTC then CTC stops too and it all moves to UC?  

Correct. All Tax Credits will stop if UC is claimed.
Spoonie meant that if she stayed on TC the CTC would continue even when WTC stopped, not that they would continue if she claimed UC.

poppy12345

She should also wait until she receives her final pay from work before claiming UC. If she claims before then her earnings received during her assessment period will affect the amount of UC she's entitled to. Although she will have a work allowance of £512 per month because she has a dependant child and won't receive the housing element because she's living with you. Work allowance means she can earn that amount before the 63% deductions apply.

calcotti

poppy12345 said:

She should also wait until she receives her final pay from work before claiming UC. If she claims before then her earnings received during her assessment period will affect the amount of UC she's entitled to. Although she will have a work allowance of £512 per month because she has a dependant child and won't receive the housing element because she's living with you. Work allowance means she can earn that amount before the 63% deductions apply.

Good spot!

threeintoone

thank you for the tip, she is due a final payment next week for holiday pay.  I didn't know that the Child tax credit could continue if she didn't claim UC - I  though it was all tax credits that stop when your hours drop below 16 per week, not just Working Tax credits.  She has some money in a LISA as was saving for a deposit ( I think it's about £10,000) - so might she be better off just staying on child tax credits and not claiming as her UC will be deducted for the savings?  It's so confusing !

calcotti

You don’t have to be working to get Child Tax Credits.
Use a benefits calculator to compare https://www.gov.uk/benefits-calculators.
On UC there is a deduction of £4.35/month for every £250 of capital over £6000.
A £10,000 LISA would be valued at £8000 to take account of the penalty charge if it was accessed early so the impact on UC would be a deduction of £34.80/month.

threeintoone

thanks everyone she has claimed UC now, and JSA.  Hopefully she will get another job soon. 

calcotti

threeintoone said:

thanks everyone she has claimed UC now, and JSA.  Hopefully she will get another job soon. 

Be aware that claiming new style JSA as well as UC will not increase her total income because the JSA will be deducted from the UC. She will get fortnightly JSA payments and a monthly UC payment.
However I am unclear why she has claimed now. You said she is due a final payment from work and were advised that it would be better to wait until that payment has been received. Any earnings received after the UC claim date will reduce the UC payable on the first payment date.