UC by 2024

andrewmp

calcotti said:

andrewmp said: What is someone's earnings increase?  Surely they won't top up to the legacy amount then?

In this case unearned income increases from zero to maybe £1000 as it doesn't exist on TV.

I'm not clear what you think the issue is.
The transitional amount is only calculated once - at the date of transfer.
Thereafter the maximum UC amount is fixed. If earnings then increase (and the total earnings are in excess of any applicable Work Allowance) obviously the UC amount payable will decrease in the normal way due to the application of the earnings deduction.

Sorry, I realise I'm probably not making much sense.

Let's presume a student is transferred over to UC and were receiving £1000 per month in Tax Credits with zero deductions due to no taxable income.  That £1000 would be protected, but their unearned income would increase by whatever they receive in student income.  This would result in a £ for £ deduction.

I could be completely wrong and they instead work out how much UC the claimant will be entitled to after all income based deductions, and then if that amount is lower than the amount they received on Tax Credits, they receive the protected Tax Credit award instead. I don't know how such a system would deal with increase in earnings though. 

Also the draft migration letter, which I linked to above, doesn't appear to show it working that way either.

calcotti

andrewmp said: Let's presume a student is transferred over to UC and were receiving £1000 per month in Tax Credits with zero deductions due to no taxable income.  That £1000 would be protected, but their unearned income would increase by whatever they receive in student income.  This would result in a £ for £ deduction.

If I follow the logic of transitional protection the loan income will need to be taken into account when setting the transitional element such that once the loan income is deducted there remains UC payable.

So Tax Credits re £1000/month. Loan income is £1000/month. Say UC maximum amount is also £1000. They will need transitional protection of £1000 to bring the UC, maximum amount to £2000 such that after the loan amount is deducted there is remaining UC entitlement of £1000.

andrewmp said:  I don't know how such a system would deal with increase in earnings though. 

I still don't understand what your concerns about this is.

Let's say the hypothetical student above then goes and gets a job and they earn £500/month. There will (assuming no WA) be a deduction of 55% of the £500 when calculating the amount payable. The maximum UC amount doesn't change but the amount payable does (which is how UC works for everybody).

andrewmp

calcotti said:

andrewmp said: Let's presume a student is transferred over to UC and were receiving £1000 per month in Tax Credits with zero deductions due to no taxable income.  That £1000 would be protected, but their unearned income would increase by whatever they receive in student income.  This would result in a £ for £ deduction.

If I follow the logic of transitional protection the loan income will need to be taken into account when setting the transitional element such that once the loan income is deducted there remains UC payable.

So Tax Credits re £1000/month. Loan income is £1000/month. Say UC maximum amount is also £1000. They will need transitional protection of £1000 to bring the UC, maximum amount to £2000 such that after the loan amount is deducted there is remaining UC entitlement of £1000.

I'm not sure it works like that, only time will tell.

Otherwise, what happens when the student finishes university, is the transitional protection removed due to a change in circumstances? I know a change in circumstances would trigger an end to transitional protection, but would a university course ending?

calcotti

andrewmp said: Otherwise, what happens when the student finishes university, is the transitional protection removed due to a change in circumstances? I know a change in circumstances would trigger an end to transitional protection, but would a university course ending?

That is an interesting question. I can't see any reason why ceasing to be a student would end the transitional element (even though it could produce some strange results).

Think for example of the SDP transitional element for those naturally migrated. Once awarded taht remains even if the claimant would no longer meet the conditions for an SDP if they were still getting a legacy benefit.

I don't know whether what I have suggested is correct either - just what seems to follow from the logic of the discussion about capital earlier.

andrewmp

calcotti said:

andrewmp said: Otherwise, what happens when the student finishes university, is the transitional protection removed due to a change in circumstances? I know a change in circumstances would trigger an end to transitional protection, but would a university course ending?

That is an interesting question. I can't see any reason why ceasing to be a student would end the transitional element (even though it could produce some strange results).

Think for example of the SDP transitional element for those naturally migrated. Once awarded taht remains even if the claimant would no longer meet the conditions for an SDP if they were still getting a legacy benefit.

I don't know whether what I have suggested is correct either - just what seems to follow from the logic of the discussion about capital earlier.

Yeah, you make some excellent points and you clearly know what you are talking about, so you will probably be correct.  Anything else just wouldn't really make any sense.

I guess everyone will have to wait and see. If it plays out the way you're suggesting it might, then students might end up with lots of universal credit once they graduate and get a job.

calcotti

andrewmp said:
I guess everyone will have to wait and see. If it plays out the way you're suggesting it might, then students might end up with lots of universal credit once they graduate and get a job.

Which would seem a bit weird so I might have got it wrong!

JonVarnas

I think the governments plan to shed 90,000 civil service jobs will put the kaibosh on the 2024 target. All those thousands of Work Coaches the DWP hired over the last couple of years will surely be in the firing line.

kaMelo

On the draft letter linked above, I can't believe they would apply an earnings deduction AFTER adding the transitional element as it makes no sense to do it that way, if they did everyone who earns above their work allowance would be worse off. If that were the case then transitional protection would not be protecting those migrating. 

My reading however is that a calculation on someone's maximum UC entitlement is done the day before migration occurs. If this calculation gives a maximum UC entitlement higher than legacy benefits then no transitional element is included (obviously) . If maximum UC is lower than legacy benefits then a transitional element is added to UC after all other elements/deductions, making the maximum UC entitlement equal to legacy benefits. This calculation is only done once, going forward the amount payable is worked out under UC rules so, for example, any increase in earnings above work allowance will reduce UC payable at the taper rate. The transitional element will naturally reduce over time or can be lost altogether with a significant change in circumstances.

As regard to students once they graduate, hopefully they will have chosen their study wisely and therefore gain immediate employment in a field where they are rewarded handsomely for their hard work studying.
In the short term regarding transitional protection applied to students once graduated I would refer back to the legislation: 

New regulation 60 provides for notified persons who are students, and entitled to existing benefits, to be exempt from the exclusion of full-time students from universal credit until they complete their course

I read that as on completion of their course they are no longer a student, a significant change and transitional protection is lost. Any other interpretation would lead to the rather strange result alluded to earlier by @calcotti, but it wouldn't be the first time such a thing has happened.

I actually think you are over estimating how many students, eligible for student loans, claim benefits. Just under 50% of all students are aged 20 or under, none of whom would be claiming tax credits. Another 20% aged 21-24, most of whom would be ineligible/too young to have a tax credit claim. Only around 30% of all students are 25 or over, the age group more likely to have a current tax credit claim but also the group, for various reasons, for whom a student loan is not available.

For obvious reasons public information on the number of tax credit claimants who study and receive a student loan is not available but from what information is out there logic would dictate the numbers are tiny.

calcotti

No one has suggested that the process is as indicated inn your opening paragraph.

As you say the calculation of the transitional element is calculated to take into account earnings, other income etc. Once calculated that transitional element is included in the calculation of the maximum amount such that when the deductions are applied the end result matches the legacy benefits on that day.

Thereafter UC payable is calculated in the normal way starting from the maximum amount with applicable deductions made in the normal way. Variation in income will cause the UC payable to vary.

This is as per described in your second paragraph and as indicated in earlier posts own this thread.

kaMelo said: New regulation 60 provides for notified persons who are students, and entitled to existing benefits, to be exempt from the exclusion of full-time students from universal credit until they complete their course

I read that as on completion of their course they are no longer a student, a significant change and transitional protection is lost. 

The legislation doesn't state this. Regulation 60 simply prevents students being automatically excluded from UC if they are on legacy benefits.

kaMelo said:
I actually think you are over estimating how many students, eligible for student loans, claim benefits.

I have made no indication of how many students might be involved. Bearing in mind that new Tax Credit claims have not been possible (except in limited circumstances) for over three years I agree with you that the numbers are likely to be small.

NedS

JonVarnas said:

I think the governments plan to shed 90,000 civil service jobs will put the kaibosh on the 2024 target. All those thousands of Work Coaches the DWP hired over the last couple of years will surely be in the firing line.

Those jobs will not be lost overnight, but are rather proposed cuts over 3 years, so may occur near or after managed migration is finished (...says laughing optimistically!!) Further, it is not clear what proportion of cuts would happen from within DWP, and in which roles. Even so, DWP looks well staffed at present given how tight the labour market currently is, so unless a recession triggers a large increase in unemployment (very possible), there is no reason to think the 2024 target is unachievable. Universal Credit Live Service migration happened fairly smoothly once they actually got on with it. They need to stop messing about in small trial areas and start rolling it out nationally by September.