Administrative Earnings Threshold to rise for Universal Credit.. Help please

nuanger

Hi,  just trying to find the answer to this,   would this be before or after tax?  I've looked on the universal credit site but can't see the answer,   thanks 

• Regulations which come into force today, Monday 26 September, will raise the Administrative Earnings Threshold level on Monday 26 September to £494 per calendar month for single claimants and £782 per calendar month for couples. In raising it, people will have to earn over the new higher level in order to enter into the Light Touch group.

calcotti

According to guidance AET and CET are based on gross employed earnings. Self employed earnings do not count.
https://data.parliament.uk/DepositedPapers/Files/DEP2022-0452/002-Administrative_and_Conditionality_Earnings_Thresholds_V7.0.pdf

(Note, this link hasn’t been updated to new figures.)

There was also previously an announcement that there will be a further rise in January or February but there have been so many changes in government that I have now lost track of who said it and have no idea whether or not it will still happen.

nuanger

Thanks for that,  the job centre are saying it's my take home pay after tax which puts me just below the threshold and they want me to attend weekly at the job centre.  

tomtom256

The system decides, not the job centre. It may just have been badly explained to you.

calcotti

I would refer the JobCentre to the guidance.

Refer also to

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1046459/adm-j2.pdf
Paragraph J2092.

and
https://www.legislation.gov.uk/uksi/2013/376/regulation/90
Regulation 90(6) makes clear that for earnings thresholds the gross amount applies.

nuanger

tomtom256 said:

The system decides, not the job centre. It may just have been badly explained to you.

The system decides, not the job centre. It may just have been badly explained to you.

Thanks for the input, I did show them my payslip,  they said my take home pay was less because of my tax deduction.   it's hard to argue as I'm scared  they may stop my universal credit payments if I seem to be difficult..

calcotti

nuanger said:

tomtom256 said:

The system decides, not the job centre. It may just have been badly explained to you.

The system decides, not the job centre. It may just have been badly explained to you.

Thanks for the input, I did show them my payslip,  they said my take home pay was less because of my tax deduction.   it's hard to argue as I'm scared  they may stop my universal credit payments if I seem to be difficult..

Well obviously the take home pay is less because of the income tax deduction and presumably NI. However the regulations referenced make clear that the relevant amount is the gross figure before tax and NI etc.

(6) A person’s monthly earnings are—
(a) the person’s earned income calculated or estimated in relation to the current assessment period before any deduction for income tax, national insurance contributions or relievable pension contributions; or
(b) in a case where the person's earned income fluctuates (or is likely to fluctuate) the amount of that income calculated or estimated before any deduction for income tax, national insurance contributions or relievable pension contributions, taken as a monthly average —
(i) where there is an identifiable cycle, over the duration of one such cycle, or
(ii) where there is no identifiable cycle, over three months or such other period as may, in the particular case, enable the monthly average to be determined more accurately
and the Secretary of State may, in order to enable monthly earnings to be determined more accurately, disregard earned income received in respect of an employment which has ceased.

The problem is that the way earnings are calculated for earnings thresholds is completely different to the way earnings are calculated for calculating the amount of UC payable which is based on net earnings (and can't be averaged). Unfortunately DWP do not train their staff adequately.

They can't just stop your payments for 'seeming to be difficult'. You are entitled to ask them to check that the regulations are applied correctly.

calcotti

tomtom256 said:

The system decides, not the job centre. It may just have been badly explained to you.

Is it the computer system that flags up who is subject to conditionality? 

nuanger

Thanks for the replies and very useful info, I'm due at job centre again next week,  I'll see what they say now that I know where I stand .. 

NedS

calcotti said:

According to guidance AET and CET are based on gross employed earnings. Self employed earnings do not count.
https://data.parliament.uk/DepositedPapers/Files/DEP2022-0452/002-Administrative_and_Conditionality_Earnings_Thresholds_V7.0.pdf

(Note, this link hasn’t been updated to new figures.)

There was also previously an announcement that there will be a further rise in January or February but there have been so many changes in government that I have now lost track of who said it and have no idea whether or not it will still happen.

It shouldn't make any difference at those levels, as £494/month is equivalent to £5928/year, well under the threshold any income tax or NI would be paid. Even with the proposed January increases, should still be well under income tax and NI thresholds.

A person would have to earn over £1047.50 gross per month before any tax or NI were due.

I did learn something new though, as I was not previously aware AET/CET were based on gross earnings (and I would not be at all surprised if the UC system were basing calculations on net earnings)

NedS

nuanger said:

Thanks for that,  the job centre are saying it's my take home pay after tax which puts me just below the threshold and they want me to attend weekly at the job centre.  

How much did you earn in the month and how much tax did you pay?