Should I switch to universal credit?

MSE_Rosie

This is the place to discuss our new Should I switch to universal credit guide?

We'd love to hear your thoughts, personal experiences, and general feedback. 

If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.

calcotti

I think it could do with a warning to the low income self employed about the Minimum Income Floor.

NedS

You also shouldn't put a figure on earnings for self employed (Self-employed workers earning less than £1,200 a month) as the amount will be different for everyone, depending on their circumstances so it isn't possible to give an exact figure, or even a ballpark guide, as the MIF covers a large range, from £4.62 x 16h up to £8.91 x 35h/week.

stutakesphotos

"compared wiht 30 hours on working tax credit"
Compared with 
Sorry to be pedantic

I wonder whether it should mention discretionary housing payments?

Overall, I really like it. Great stuff

DaphneHall

It says in the article dated 17 Jan 2022 that you have to complete the UC claim in one online session - in fact you can save it part filled and log on again and come back to it - just the date of claim isn't registered until you press the submit button

J_Mackwell

Hi currently receive CTC (not WTC or HB) based on income minus gift aided deductions. Am only able to gift aid so much of my donations due to not paying much tax due to level of income. Am considering 3 options:
1. Stay with CTC, monitor and limit gift aided giving, though will give donate more than I can gift aid. (also use gift aided giving as tax deductible.
2. Stay with CTC, register for CharitiesTrust Payroll giving so donations taken before tax - BUT not sure if CTC assessed on left over income or not? Any ideas?
3. Move over to UC, register for CharitiesTrust Payroll giving so donations taken before tax which I believe UC use the left over income to base my UC award on? Is this correct?

So which option is best, both for my family and also for the charities I support?

DigitalDax

If you are self employed and don't get help with childcare or rent, then I strongly recommend...

Do NOT move from Working Tax Credit to Universal Credit!

Everyone will eventually have to go across but until you are forced to, I would delay it as long as possible. I got a letter saying I needed to migrate across soon, so I started the process to save time. The letter said that the majority of people will get the same, if not more, than they received via WTC. I even used one of their recommended online tools to check what I should get and it said roughly the same as WTC. Absolutely rubbish. After a first meeting with my "work coach" (how patronising is that considering I have been self employed for many years and do not require any coaching) I will end up with nothing but more forms to fill in - much like the rest of the self employed.

This is how it was explained to me...

The Minimum Income Floor is around £1400 a month for me - this is the figure set by them to be the minimum liveable wage. Even though I do not require this much per month, I get no say over that figure. If I earn less than that for a few months they will consider me "not gainfully self employed" and I will have to stop being self employed and look for another job. If I earn more than about £350 a month (roughly the UC I would get) then for every pound over, 55p will be knocked off my UC. So, if I did manage to earn the minimum £1400 a month then I would lose £577.50 from my UC, i.e. much more than I could possibly get.

Catch 22. Earn too little and you get kicked off of UC. Earn what they say is the minimum you must earn and you get no UC, but you do still have to do all of the form filling, online journal entries, online earnings calculations, regular meetings with your "work coach" etc. which is more work... for nothing. I can only see this as a way to completely remove any kind of working credit for self employed people who are trying to build something to help their family, the economy, keep the unemployed figures down and perhaps even get big enough to employ other people in the future. Even my "work coach" said they are going to see a lot of people upset by this nonsense.

Spoonie_Turtle

DigitalDax said:

If you are self employed and don't get help with childcare or rent, then I strongly recommend...

Do NOT move from Working Tax Credit to Universal Credit!

Everyone will eventually have to go across but until you are forced to, I would delay it as long as possible. I got a letter saying I needed to migrate across soon, so I started the process to save time. The letter said that the majority of people will get the same, if not more, than they received via WTC. I even used one of their recommended online tools to check what I should get and it said roughly the same as WTC. Absolutely rubbish. After a first meeting with my "work coach" (how patronising is that considering I have been self employed for many years and do not require any coaching) I will end up with nothing but more forms to fill in - much like the rest of the self employed.

You should have got transitional protection for a year.

This is how it was explained to me...

The Minimum Income Floor is around £1400 a month for me - this is the figure set by them to be the minimum liveable wage. Even though I do not require this much per month, I get no say over that figure. If I earn less than that for a few months they will consider me "not gainfully self employed" and I will have to stop being self employed and look for another job. If I earn more than about £350 a month (roughly the UC I would get) then for every pound over, 55p will be knocked off my UC. So, if I did manage to earn the minimum £1400 a month then I would lose £577.50 from my UC, i.e. much more than I could possibly get.

The figure is not arbitrarily set but is calculated as {your expected working hours} x NMW.

If your UC is only £350 then presumably you don't have any children and thus not the work allowance (if you had LCW you would not be gainfully SE and the MIF would be irrelevant) and unfortunately the 55% deductions apply to all of your earnings.

Catch 22. Earn too little and you get kicked off of UC. Earn what they say is the minimum you must earn and you get no UC, but you do still have to do all of the form filling, online journal entries, online earnings calculations, regular meetings with your "work coach" etc. which is more work... for nothing. I can only see this as a way to completely remove any kind of working credit for self employed people who are trying to build something to help their family, the economy, keep the unemployed figures down and perhaps even get big enough to employ other people in the future. Even my "work coach" said they are going to see a lot of people upset by this nonsense.

No you won't.  You just won't get extra money in your payments to top up the income lower than that.

If your maximum UC is eroded to nil by your MIF anyway then no, you won't get any once the MIF applies.

For the first 12 months of your claim the minimum income floor does not apply (rules changed a while into the pandemic, it used to apply straight away if you'd been trading for 12months or more).

Tax Credits did also have a requirement about self-employment being gainful - i.e. meeting the same kind of tests that UC sets out - but didn't really enforce it.


I'm not sure you've had UC explained properly to you though, so helping you understand how it actually works would be a good start so then you can see what your situation actually is.

Newcad

Everybodys circumstances are different, which is why such "should I" guides like that are a problem to write.

In the end someone can write a lot of words but the best  advice has to be -

"check your own personal circumstances if you feel confident to do so, otherwise have a good benefits advisor check them for you".

Voluntary Migration to UC is one of many situations where relying on self-help articles on a website (even MSE) is not the best idea.

DigitalDax

The figure is not arbitrarily set but is calculated as {your expected working hours} x NMW.

Yes. That is why I stated it "is around £1400 a month for me". It will vary for others.

...presumably you don't have any children

I have no children under 18 who require childcare, which is why I stated at the top about being "self employed and don't get help with childcare or rent".

No you won't.  You just won't get extra money in your payments to top up the income lower than that.

Yes - they WILL stop UC. As explained, I get no other UC and am being forced to move over from Working Tax Credit. If I don't meet their figures then they either stop my UC or force me to stop being self employed and seek other employment. In essence I get the impression they would rather I was unemployed, job seeking, and claiming UC than be self employed.

The amount of extra work they require (which is time I could better spend working) and the constant threats if I don't meet the requirements makes me want to just cancel the whole process and ditch what little help they offer. I guess that is exactly why they put so many hoops to jump through.

Spoonie_Turtle

DigitalDax said:

No you won't.  You just won't get extra money in your payments to top up the income lower than that.

Yes - they WILL stop UC. As explained, I get no other UC and am being forced to move over from Working Tax Credit. If I don't meet their figures then they either stop my UC or force me to stop being self employed and seek other employment. 

Please explain why you think that? 

Do you get no UC when the MIF is applied?  If so then whether you meet the MIF or not is irrelevant.  Your comment implies that if you do meet the MIF then UC will continue.

You still should have 12 months' transitional protection from the date of migration so you get no less than on Tax Credits.  And the MIF does not apply for the first 12 months of your claim.

If your UC is nil based on the MIF then your claim will automatically close after six months of nil payments whether you meet the MIF or not.

If you are not earning very much from self-employment then you have been fortunate Tax Credits supported you for all these years and didn't enforce the requirement to be working X number of hours and earning the equivalent of minimum wage or above.