Working 24 hrs & on Universal Credit - Query about hourly rate

nero33

Just asking a question on behalf of a relative.

He works 24 hours per at the moment (earning the minimum wage) & he gets Universal Credit. I think the 24 hrs is relevant for getting Working Tax Credits. (He's the sole earne

Anyway, that job is ending soon and he can get a new job, also 24 hrs/per week but the hourly rate is higher, possible £11-£12hr.

Will this severely damage the Universal Credit or Working Tax Credits they receive? Is there an upper limit to what he can earn per hour whilst on Universal Credit/Working Tax Credits etc?

I don't know anything Universal Credit and he doesnt either to be honest as he only went on this during lockdown so never actually had a face to face chat with any staff to discuss things properly.

Thanks

calcotti

nero33 said: He works 24 hours per at the moment (earning the minimum wage) & he gets Universal Credit. I think the 24 hrs is relevant for getting Working Tax Credits.

He is claiming UC. It is not possible to claim Working tax Credits, they have been replaced by UC.

nero33 said: Anyway, that job is ending soon and he can get a new job, also 24 hrs/per week but the hourly rate is higher, possible £11-£12hr.

Will this severely damage the Universal Credit or Working Tax Credits they receive? Is there an upper limit to what he can earn per hour whilst on Universal Credit/Working Tax Credits etc?

In principle if his wages are higher then her gets less UC. However the government have just changed the way the earnings deduction is calculated so claimants will actually get more UC for the same wage. Previously a deduction of 63% of earnings was made, now the deduction is 55%. If he qualifies for a Work Allowance (there are children on the claim or somebody with Limited capability for Work), which means that an earner has some of their earnings ignored, this too has been increased which means he gets to keep more of his wage.

There is no fixed limit, the point at which UC entitlement becomes nil varies from person to person depending on how the UC claim is made up.

If he logs into his UC journal he will see a statement every month showing how his payment has been calculated.

nero33

calcotti said:

nero33 said: He works 24 hours per at the moment (earning the minimum wage) & he gets Universal Credit. I think the 24 hrs is relevant for getting Working Tax Credits.

He is claiming UC. It is not possible to claim Working tax Credits, they have been replaced by UC.

nero33 said: Anyway, that job is ending soon and he can get a new job, also 24 hrs/per week but the hourly rate is higher, possible £11-£12hr.

Will this severely damage the Universal Credit or Working Tax Credits they receive? Is there an upper limit to what he can earn per hour whilst on Universal Credit/Working Tax Credits etc?

In principle if his wages are higher then her gets less UC. However the government have just changed the way the earnings deduction is calculated so claimants will actually get more UC for the same wage. Previously a deduction of 63% of earnings was made, now the deduction is 55%. If he qualifies for a Work Allowance (there are children on the claim or somebody with Limited capability for Work), which means that an earner has some of their earnings ignored, this too has been increased which means he gets to keep more of his wage.

There is no fixed limit, the point at which UC entitlement becomes nil varies from person to person depending on how the UC claim is made up.

If he logs into his UC journal he will see a statement every month showing how his payment has been calculated.

Thanks for that.  I read something online before posting this thread that 24hrs was a Working Tax Credit thing, so I assume even though that WTC doesn't exist in name the 24 hr rules still applies to Universal Credit?

He is married, 3 kids under 10 and wife doesn't work if that helps.

But ultimately, he shouldn't be worse off by accepting this new job that pays a bit more?

calcotti

nero33 said:  I read something online before posting this thread that 24hrs was a Working Tax Credit thing, so I assume even though that WTC doesn't exist in name the 24 hr rules still applies to Universal Credit?

No it doesn’t. Working Tax Credits was a Benefit for people in work. Universal Credit is a benefit for anybody on a low income whether unemployed, too ill to work, in work or looking after somebody else. Ignore anything you have read about Working a Tax Credits. It’s not relevant.

nero33 said: But ultimately, he shouldn't be worse off by accepting this new job that pays a bit more?

His UC may go down but overall he should be better off. It’s not possible to say how his UC will change without knowing how the UC award is made up and how much the net pay is. He can use a benefit calculator to get an idea.
https://benefits-calculator-2.turn2us.org.uk/

nero33

calcotti said:

nero33 said:  I read something online before posting this thread that 24hrs was a Working Tax Credit thing, so I assume even though that WTC doesn't exist in name the 24 hr rules still applies to Universal Credit?

No it doesn’t. Working Tax Credits was a Benefit for people in work. Universal Credit is a benefit for anybody on a low income whether unemployed, too ill to work, in work or looking after somebody else. Ignore anything you have read about Working a Tax Credits. It’s not relevant.

nero33 said: But ultimately, he shouldn't be worse off by accepting this new job that pays a bit more?

His UC may go down but overall he should be better off. It’s not possible to say how his UC will change without knowing how the UC award is made up and how much the net pay is. He can use a benefit calculator to get an idea.
https://benefits-calculator-2.turn2us.org.uk/

Thanks calcotti, I'll pass on your replies to him & i'll go through the benefits calculator with him

nero33

We sat down and did the sums and this was the calculation (current & potential new one).

So in new job, he would be earning £74.16 per wk (£56 after NI) and this is reduced to £25.20 per wk after UC deductions.

Does that seem very high? Thanks

poppy12345

nero33 said:

We sat down and did the sums and this was the calculation (current & potential new one).

So in new job, he would be earning £74.16 per wk (£56 after NI) and this is reduced to £25.20 per wk after UC deductions.

Does that seem very high? Thanks

How is that correct? In the first comment you said they would be working 24 hours @ £11 or £12 per hour.. this isn't £74 per week for earnings.

Which benefit calculator did you use?

Spoonie_Turtle

poppy12345 said:

nero33 said:

We sat down and did the sums and this was the calculation (current & potential new one).

So in new job, he would be earning £74.16 per wk (£56 after NI) and this is reduced to £25.20 per wk after UC deductions.

Does that seem very high? Thanks

How is that correct? In the first comment you said they would be working 24 hours @ £11 or £12 per hour.. this isn't £74 per week for earnings.

Which benefit calculator did you use?

I think that might be the difference in income rather than actual wage, looking at the calculations.  So earning *an extra* £74 per week.

calcotti

That looks right, earns an extra £56 and gets to keep £25.20.

Numberwang_2

Is that UC income £318 per week or is that the monthly amount?

calcotti

Numberwang_2 said:

Is that UC income £318 per week or is that the monthly amount?

The earnings figure is clearly weekly so the UC is weekly too.