More than 2.5 million people to be moved onto universal credit from today, leaving 900,000 worse off

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  • poppy12345
    poppy12345 Posts: 18,089 Forumite
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    Dandytf said:
    I thought the 900,000 would have transitional protection when migrated, so no one would be worse off?

    There is transitional protection in place but this doesn't mean everyone on tax credits will qualify for UC. It will depend on their circumstances.
    Wonder if I missed any transitory process considering my wtc's were closed in error.
    I feel UC Ap has driven me into considerable overdraft territory.

    thanks

    You won't receive any transitional protection. Although your WTC closed in error, they did continue to pay you some money up until you have your WCA decision for UC. You would have also received some backdated money for UC which would have included the LCWRA element and the work allowance.
  • RedMonty
    RedMonty Posts: 123 Forumite
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    jojaca said:
    I'm still on tax credits system and have decent savings. I've always been one that has saved for a rainy day.

    I've already started planning do hide and spend my savings to get the full entitlement of Universal Credit for when the time comes (hopefully end of 2024). You have to play the system. 

    I feel Universal Credit is penalising people who save, I work full time hours and my partner has disability and at the moment is not capable of working. 6k savings threshold is not a lot this day and age. 2k a month can come in and out of my account every month. Your pretty much penalised if you want to save for house or decent car. 

    Im lucky I'm already on the property ladder during tax credits era, but I may not be if Universal credit been round years ago. You need to get creative if your on Universal credit of hiding your money etc. 

    Savings of more than £16,000 will be ignored for 1 year for managed migration.
    Hi Poppy, 

    I know a family, 2 disabled parents and 2 disabled kids. The parents work hard, both were in full time employment, then one was made redundant, and now works part time & as carer for the kids. They absolutely have savings over £16k as they have experienced considerable issues holding down jobs due to their disabilities & childcare commitments**, so they save lots to carry them through hard times. 

    At the moment Tax Credits give them about £300+ a week, might seem a lot but this is to cover 4 disabled people. I used the MSE tax credit calculator, and it seems their UC will be absolutely zero because of their savings.  I think they're being shafted for trying to do the right thing, but that's a common sentiment. Two questions: 

    If they are migrated to UC, am I right in reading you that the £300/week will be maintained for 12 months, all other things being the same? And that after that 12 months, it will suddenly drop to nothing, as in cliff-edge? 

    Thanks RedMonty

    ** All their childcare costs are out of pocket because there is no registered childcare that is able to look after their kids - I've looked for them! - so for all their childcare they informally find & pay people with the required skills & will not get repaid via tax credits etc.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    RedMonty said: 
    If they are migrated to UC, am I right in reading you that the £300/week will be maintained for 12 months, all other things being the same? And that after that 12 months, it will suddenly drop to nothing, as in cliff-edge? 
    I think so but I’m not completely clear about that. 
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • poppy12345
    poppy12345 Posts: 18,089 Forumite
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    RedMonty said:
    jojaca said:
    I'm still on tax credits system and have decent savings. I've always been one that has saved for a rainy day.

    I've already started planning do hide and spend my savings to get the full entitlement of Universal Credit for when the time comes (hopefully end of 2024). You have to play the system. 

    I feel Universal Credit is penalising people who save, I work full time hours and my partner has disability and at the moment is not capable of working. 6k savings threshold is not a lot this day and age. 2k a month can come in and out of my account every month. Your pretty much penalised if you want to save for house or decent car. 

    Im lucky I'm already on the property ladder during tax credits era, but I may not be if Universal credit been round years ago. You need to get creative if your on Universal credit of hiding your money etc. 

    Savings of more than £16,000 will be ignored for 1 year for managed migration.

    At the moment Tax Credits give them about £300+ a week, might seem a lot but this is to cover 4 disabled people. I used the MSE tax credit calculator, and it seems their UC will be absolutely zero because of their savings.  I think they're being shafted for trying to do the right thing, but that's a common sentiment. Two questions: 



    Impossible to answer without knowing all the information about their circumstances. UC is based on earnings received during your assessment period.
    Try the benefits calculator without the savings because when they're invited to apply if their savings remain above £16,000 then it's ignored for 1 year.  After this if the savings remain at this level they will no longer be entitled.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    edited 9 May 2022 at 7:29PM
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    poppy12345 said:.. when they're invited to apply if their savings remain above £16,000 then it's ignored for 1 year.  
    I’m not sure that is correct. Capital in excess of £16,000 is ignored. Logically therefore there will still be tariff income up to £16,000. However I don’t know if this is considered when calculating the transitional amount.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • poppy12345
    poppy12345 Posts: 18,089 Forumite
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    calcotti said:
    poppy12345 said:.. when they're invited to apply if their savings remain above £16,000 then it's ignored for 1 year.  
    I’m not sure that is correct. Capital in excess of £16,000 is ignored. Logically therefore there will still be tariff income up to £16,000. However I don’t know if this is considered when calculating the transitional amount.

    Ah ok, thanks. It would be interesting to know if the tariff income will apply because we'll be having even more threads about the transfer in the coming months.
  • andrewmp
    andrewmp Posts: 1,754 Forumite
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    calcotti said:
    poppy12345 said:.. when they're invited to apply if their savings remain above £16,000 then it's ignored for 1 year.  
    I’m not sure that is correct. Capital in excess of £16,000 is ignored. Logically therefore there will still be tariff income up to £16,000. However I don’t know if this is considered when calculating the transitional amount.

    Ah ok, thanks. It would be interesting to know if the tariff income will apply because we'll be having even more threads about the transfer in the coming months.
    Capital in excess of £16k is ignored in UC for 12 months, both for the financial conditions and tariff income. It is therefore also ignored when calculating any transitional element.

    Capital up to £16k will lead to unearned income being included in the UC award immediately, but can also create (or increase) a transitional element.
  • poppy12345
    poppy12345 Posts: 18,089 Forumite
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    andrewmp said:
    calcotti said:
    poppy12345 said:.. when they're invited to apply if their savings remain above £16,000 then it's ignored for 1 year.  
    I’m not sure that is correct. Capital in excess of £16,000 is ignored. Logically therefore there will still be tariff income up to £16,000. However I don’t know if this is considered when calculating the transitional amount.

    Ah ok, thanks. It would be interesting to know if the tariff income will apply because we'll be having even more threads about the transfer in the coming months.
    Capital in excess of £16k is ignored in UC for 12 months, both for the financial conditions and tariff income. It is therefore also ignored when calculating any transitional element.

    Capital up to £16k will lead to unearned income being included in the UC award immediately, but can also create (or increase) a transitional element.

    Thanks. Do you have a link for that please?
  • NedS
    NedS Posts: 3,619 Forumite
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    calcotti said:

    What is ridiculous is that the savings thresholds have not changed for many years. They should, in my opinion, be uprated periodically.

    and that they are the same for single claimants and couples, so two single claimants with £10k savings each could become a couple and no longer be eligible to claim.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    edited 10 May 2022 at 7:53AM
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    andrewmp said: Capital up to £16k will lead to unearned income being included in the UC award immediately, but can also create (or increase) a transitional element.
    That's what I would expect but I couldn't find evidence to confirm it which is why I was hesitant. If you've got a link please post it.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
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