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

Options
123468

Comments

  • NedS
    NedS Posts: 3,618 Forumite
    First Anniversary First Post Name Dropper
    edited 11 May 2022 at 5:40PM
    Options
    Question about savings and potential deprivation of capital - whilst on CTC we have accumulated some savings (over £6k but under £16k) that are intended for a substantial family holiday to Florida in the next few years. If we are migrated to UC with those savings protected for the first year, and we then travel on said trip in year two spending the savings, might we be accused of deliberate deprivation? How could I evidence that this has been a long-term plan?
    Likely yes. Regardless of what you may have saved that money for, you would then be claiming means-tested benefits at a cost to the tax payer. Is it fair for the tax payer to be supporting you (and your family) month on month whilst you use savings to pay for an expensive holiday to Florida?
    I would suggest you book and pay for the holiday before you are migrated onto UC.
  • arnoldy
    arnoldy Posts: 505 Forumite
    First Post First Anniversary Name Dropper
    Options
    A quick skim of the boards show that the benefits system is byzantine in its complexity and astonishing in its scope. You only have to look at PIP, DLA, UC, Tax credits, SDP. supplements, premiums, deductions, tapers, transitional protection, etc etc ...the list is endless requiring an army of CAB and social workers to navigate the monster. 

    The transition to one simple system has to be a good thing, the claimants know what they are entitled to without a Phd in the benefits system, and the taxpayers know what they are paying for.


  • andrewmp
    andrewmp Posts: 1,754 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Options
    arnoldy said:
    A quick skim of the boards show that the benefits system is byzantine in its complexity and astonishing in its scope. You only have to look at PIP, DLA, UC, Tax credits, SDP. supplements, premiums, deductions, tapers, transitional protection, etc etc ...the list is endless requiring an army of CAB and social workers to navigate the monster. 

    The transition to one simple system has to be a good thing, the claimants know what they are entitled to without a Phd in the benefits system, and the taxpayers know what they are paying for.


    I think most people accept it's a good idea in principle, the main issue is ensuring that people aren't worse off as a result.

    Transitional protection should really ensure that, as long as it works for everyone.
  • OhWow
    OhWow Posts: 387 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    Options
    andrewmp said:
    OhWow said:
    andrewmp said:



     tx credits (which aren't/weren't technically benefits).



    Paid by the Welfare state to those on low income and not based on the contributions of the claimant: Tax Credit is a welfare benefit. Not to be confused with a tax benefit.






    I thought that might mean that they are different to a benefit, technically.  Otherwise you would think it would just say 'the following 6 benefits are ending.'


    They do, although they say they say "replacing" and not "ending"

    If you already get other benefits

    Universal Credit is replacing the following benefits:

    • Child Tax Credit
    • Housing Benefit
    • Income Support
    • income-based Jobseeker’s Allowance (JSA)
    • income-related Employment and Support Allowance (ESA)
    • Working Tax Credit

    If you currently get any of these benefits, you do not need to do anything unless:

    https://www.gov.uk/universal-credit



    In 2019 the Department for Work and Pensions started to move claimants in receipt of one or more of the following benefits to Universal Credit:

    • Working Tax Credit
    • Child Tax Credit
    • income-based Jobseeker’s Allowance
    • income-related Employment and Support Allowance
    • Income Support
    • Housing Benefit
    https://www.gov.uk/government/news/the-universal-credit-transitional-provisions-regulations-2022





  • Spoonie_Turtle
    Spoonie_Turtle Posts: 8,509 Forumite
    First Anniversary First Post Name Dropper
    Options
    OhWow said:
    andrewmp said:
    OhWow said:
    andrewmp said:



     tx credits (which aren't/weren't technically benefits).



    Paid by the Welfare state to those on low income and not based on the contributions of the claimant: Tax Credit is a welfare benefit. Not to be confused with a tax benefit.






    I thought that might mean that they are different to a benefit, technically.  Otherwise you would think it would just say 'the following 6 benefits are ending.'


    They do, although they say they say "replacing" and not "ending"
    Well those benefit claims being 'replaced' by UC claims are ended once the claim for UC is made, and no new claims have been allowed for those benefits for quite a long time already.
  • andrewmp
    andrewmp Posts: 1,754 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    Options
    OhWow said:
    andrewmp said:
    OhWow said:
    andrewmp said:



     tx credits (which aren't/weren't technically benefits).



    Paid by the Welfare state to those on low income and not based on the contributions of the claimant: Tax Credit is a welfare benefit. Not to be confused with a tax benefit.






    I thought that might mean that they are different to a benefit, technically.  Otherwise you would think it would just say 'the following 6 benefits are ending.'


    They do, although they say they say "replacing" and not "ending"

    If you already get other benefits

    Universal Credit is replacing the following benefits:

    • Child Tax Credit
    • Housing Benefit
    • Income Support
    • income-based Jobseeker’s Allowance (JSA)
    • income-related Employment and Support Allowance (ESA)
    • Working Tax Credit

    If you currently get any of these benefits, you do not need to do anything unless:

    https://www.gov.uk/universal-credit



    In 2019 the Department for Work and Pensions started to move claimants in receipt of one or more of the following benefits to Universal Credit:

    • Working Tax Credit
    • Child Tax Credit
    • income-based Jobseeker’s Allowance
    • income-related Employment and Support Allowance
    • Income Support
    • Housing Benefit
    https://www.gov.uk/government/news/the-universal-credit-transitional-provisions-regulations-2022





    My point is there is a clear distinction made between benefits and tax credits.  Therefore, my original assertion that tax credits are technically not a benefit does appear to have basis in fact.
  • ElwoodBlues
    ElwoodBlues Posts: 381 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    Options
    I've just started looking into how UC works, after hearing that they're planning to resume migrating TC claimants soon. It looks absolutely horrendous for my circumstances, and from what I can gather I'll end up going from a regular weekly tax credits payment to a variable and sporadic monthly UC payment at best. At worst, I'll get nothing at all, and won't be eligible for transitional protection.

    I'm a single parent of 3 primary age kids. I run my own small business (Limited Company), which is profitable and pays me the living wage (on a part time/25hr a week basis, which is what I understand UC Minimum Income Floor would be based on). It's a genuine small business, which I took over 20 years ago. Has always generated a reasonable profit, although in recent years becoming a single parent I've scaled it back to focus on family.

    My company's income is highly variable month to month - it's highly seasonal and I have some customers that are invoiced on an annual basis. The business absorbs the variations and I pay myself a fixed wage on PAYE basis. But UC tears all that up (along with accrual accounting) and works on the basis that all the business profit in a month is my personal income. On a 'good' month the business income will reduce (or completely cancel) my UC payment for the following month, when it's quite likely that the business income will be lower again.

    I'll have to prepare monthly accounts for them on a cash accounting basis, so totally different to my existing accounting. Expect that alone will generate a day or two of extra admin each month, which will not only be an unpaid overhead, but prevent me from doing any income generating work.

    I can see how it might work for your common self employed. 

    And to top it all off, I've been scrimping and saving for the last few years to fund an extension on the house, so my kids aren't squashed into 'box' bedrooms. I'm not quite there with enough to pay for the building work yet, but it's enough to disqualify me from UC. Yes, I'm lucky enough to have some savings, but as a family we've made massive sacrifices to accumulate that - kids have never been on a proper holiday, have sat out of residential school trips, I drive a 20 year old car, buy everything 2nd hand or from the tip, we never eat out or have takeaways etc. At this point, with UC looming, I'd be better off taking it down the casino and putting it all on red. Except of course UC would class that as deprivation of income. 

    I feel shafted from all sides with this.
  • andrewmp
    andrewmp Posts: 1,754 Forumite
    Name Dropper First Post First Anniversary Combo Breaker
    edited 11 May 2022 at 8:21PM
    Options
    I've just started looking into how UC works, after hearing that they're planning to resume migrating TC claimants soon. It looks absolutely horrendous for my circumstances, and from what I can gather I'll end up going from a regular weekly tax credits payment to a variable and sporadic monthly UC payment at best. At worst, I'll get nothing at all, and won't be eligible for transitional protection.

    I'm a single parent of 3 primary age kids. I run my own small business (Limited Company), which is profitable and pays me the living wage (on a part time/25hr a week basis, which is what I understand UC Minimum Income Floor would be based on). It's a genuine small business, which I took over 20 years ago. Has always generated a reasonable profit, although in recent years becoming a single parent I've scaled it back to focus on family.

    My company's income is highly variable month to month - it's highly seasonal and I have some customers that are invoiced on an annual basis. The business absorbs the variations and I pay myself a fixed wage on PAYE basis. But UC tears all that up (along with accrual accounting) and works on the basis that all the business profit in a month is my personal income. On a 'good' month the business income will reduce (or completely cancel) my UC payment for the following month, when it's quite likely that the business income will be lower again.

    I'll have to prepare monthly accounts for them on a cash accounting basis, so totally different to my existing accounting. Expect that alone will generate a day or two of extra admin each month, which will not only be an unpaid overhead, but prevent me from doing any income generating work.

    I can see how it might work for your common self employed. 

    And to top it all off, I've been scrimping and saving for the last few years to fund an extension on the house, so my kids aren't squashed into 'box' bedrooms. I'm not quite there with enough to pay for the building work yet, but it's enough to disqualify me from UC. Yes, I'm lucky enough to have some savings, but as a family we've made massive sacrifices to accumulate that - kids have never been on a proper holiday, have sat out of residential school trips, I drive a 20 year old car, buy everything 2nd hand or from the tip, we never eat out or have takeaways etc. At this point, with UC looming, I'd be better off taking it down the casino and putting it all on red. Except of course UC would class that as deprivation of income. 

    I feel shafted from all sides with this.
    This is why there should should have been a proper trial. Instead we ended up with one that struggled to migrate around 40 people in around a year.

    It seems to me like people like you will now just be collateral damage to the government as the only thing that actually seems to matter now is a 2024 completion.

    Hopefully whichever random EO gets to decide whether you actually need an extension or not is reasonable.
  • calcotti
    calcotti Posts: 15,696 Forumite
    First Anniversary First Post Name Dropper
    Options
    andrewmp said:
    This is why there should should have been a proper trial. Instead we ended up with one that struggled to migrate around 40 people in around a year.
    I think it was 13!
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Twixty3
    Twixty3 Posts: 89 Forumite
    First Post Photogenic Name Dropper
    Options
    I've just started looking into how UC works, after hearing that they're planning to resume migrating TC claimants soon. It looks absolutely horrendous for my circumstances, and from what I can gather I'll end up going from a regular weekly tax credits payment to a variable and sporadic monthly UC payment at best. At worst, I'll get nothing at all, and won't be eligible for transitional protection.

    I'm a single parent of 3 primary age kids. I run my own small business (Limited Company), which is profitable and pays me the living wage (on a part time/25hr a week basis, which is what I understand UC Minimum Income Floor would be based on). It's a genuine small business, which I took over 20 years ago. Has always generated a reasonable profit, although in recent years becoming a single parent I've scaled it back to focus on family.

    My company's income is highly variable month to month - it's highly seasonal and I have some customers that are invoiced on an annual basis. The business absorbs the variations and I pay myself a fixed wage on PAYE basis. But UC tears all that up (along with accrual accounting) and works on the basis that all the business profit in a month is my personal income. On a 'good' month the business income will reduce (or completely cancel) my UC payment for the following month, when it's quite likely that the business income will be lower again.

    I'll have to prepare monthly accounts for them on a cash accounting basis, so totally different to my existing accounting. Expect that alone will generate a day or two of extra admin each month, which will not only be an unpaid overhead, but prevent me from doing any income generating work.

    I can see how it might work for your common self employed. 

    And to top it all off, I've been scrimping and saving for the last few years to fund an extension on the house, so my kids aren't squashed into 'box' bedrooms. I'm not quite there with enough to pay for the building work yet, but it's enough to disqualify me from UC. Yes, I'm lucky enough to have some savings, but as a family we've made massive sacrifices to accumulate that - kids have never been on a proper holiday, have sat out of residential school trips, I drive a 20 year old car, buy everything 2nd hand or from the tip, we never eat out or have takeaways etc. At this point, with UC looming, I'd be better off taking it down the casino and putting it all on red. Except of course UC would class that as deprivation of income. 

    I feel shafted from all sides with this.
    Two things that may be of use to you are :-

    • To provide for a 12-month period when the Minimum Income Floor will not apply to self-employed claimants who are managed migrated
    And if you end up with an indicative nil award 

    The transitional element – initial amount and adjustment where other elements increase

    55.—(1) The initial amount of the transitional element is—

    (a)if the indicative UC amount is greater than nil, the amount by which the total legacy amount exceeds the indicative UC amount; or

    (b)if the indicative UC amount is nil, the total legacy amount plus any amount by which the income which fell to be deducted in accordance with section 8(3) of the Act (that is the prescribed percentage of earned and unearned income above the work allowance) exceeded the maximum amount.

    (2) The amount of the transitional element to be included in the calculation of an award is—

    (a)for the first assessment period, the initial amount;

    (b)for the second assessment period, the initial amount reduced by the sum of any relevant increases in that assessment period;

    (c)for the third and each subsequent assessment period, the amount that was included for the previous assessment period reduced by the sum of any relevant increases (as in sub-paragraph (b)).

    (3) If the amount of the transitional element is reduced to nil in any assessment period, a transitional element is not to apply in the calculation of the award for any subsequent assessment period.

    (4) A “relevant increase” is an increase in any of the amounts that are included in the maximum amount under sections 9 to 12 of the Act (including any of those amounts that is included for the first time)(25), apart from the childcare costs element.

    As far as I am aware the minimum income floor is equivalent to 35 hrs on the minimum wage not the living wage.  

Meet your Ambassadors

Categories

  • All Categories
  • 343.7K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.8K Work, Benefits & Business
  • 608.8K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards