Universal Credit Couples AET and Household CET

calcotti

NedS said:

AET and CET do not apply / are not relevant to claimants in other conditionality groups such as No Work Related Requirements (LCWRA, Carers, Child under 1 or pregnant within 11 weeks, certain qualifying students), Work Focused Interview (Child aged 1-2, foster carers) and Work Prep (LCW, child aged 2-3) regimes.

If a claimant has LCW or is main carer for a child aged 2-3 and is in the Work Prep regime, they will be expected to attend appointments even if their partner is earning 10 x CET as the CET bears no relevance to their circumstances because it is an earnings threshold and they are not expected to be earning anything, only preparing for possible future work.

Under the budget changes (that is, changes to the AET), it will make no difference to anyone who is not in All Work Related Conditionality groups. If you have LCWRA you will not be required to attend appointments and nothing in the budget changes that.

What does potentially change that is the proposed disability white paper, but that is just a proposal and is many years away from ever becoming a reality.

There is a suggestion that more requirements will be made on parents of young children to encourage work - a possible change that I find offensive. (However all of the discussions on this thread seem out of place given that they are not currently affecting the benefits available for claimants now!)

https://www.theguardian.com/money/2023/mar/21/ministers-reportedly-scrap-plan-to-bring-forward-rise-in-uk-state-pension-age

tifo

calcotti said:

As previously advised all AET goes up in April due to the increase in NMW. £667 for single person and £1,083 for a couple.

That's another £52.25 a month to the DWP (55p taper) from a claimant who will have to meet the new threshold.

Soconfused14

Has there been any movement on this issue yet. I read something yesterday suggesting the Couples AET may be removed in Sept 2023. 

seatbeltnoob

My wife used to work in a daycare centre she knows a thing or two about how they're run. She wants to be a full time parent for out 18 month old until she's of school age.

She says they are taught to let children cry out their tantrums and some of them are just sat there crying non sotp for 5-10 minutes at a time. Theyre taught to not give them maternal care and not pick them up and hold them and stuff. She beleives kids there are just stressed out and those children grow up to not have an emotional bond with their mothers and have emotional issues later on in life. Not her option, stuff she's read by child psychologists.

It's going to be tough for many parents who would rather raise their children during the primary years than subcontract it out to a daycare centre which the taxpayer funds anyway. My wife doesn't have the resume to go out and earn more than minimum wage.

I have a ltd co ecommerce store and I can have my wife work in my business posting and packing items for me. If they really push us, Maybe I can add a day care service into my business and have her work for me as a child minder and mind our child and get paid by universal credit to pay for childcare.

NedS

seatbeltnoob said:

I have a ltd co ecommerce store and I can have my wife work in my business posting and packing items for me. If they really push us, Maybe I can add a day care service into my business and have her work for me as a child minder and mind our child and get paid by universal credit to pay for childcare.

Good luck with that!

Seriously, firstly it would be fraudulent as it's clearly a contrived business[*], and secondly it would be completely impracticable unless you are familiar with the hoops and regulations required for setting up and registering a childcare business.

* HMRC have rules around paying/employing your wife (or partner) to perform common household duties.

seatbeltnoob

NedS said:

seatbeltnoob said:

I have a ltd co ecommerce store and I can have my wife work in my business posting and packing items for me. If they really push us, Maybe I can add a day care service into my business and have her work for me as a child minder and mind our child and get paid by universal credit to pay for childcare.

Good luck with that!

Seriously, firstly it would be fraudulent as it's clearly a contrived business[*], and secondly it would be completely impracticable unless you are familiar with the hoops and regulations required for setting up and registering a childcare business.

* HMRC have rules around paying/employing your wife (or partner) to perform common household duties.

I said that half jokingly, not planning on doing that. But I did mention it to a relative whose a grandmother who looks after twin grandkids full time while the mum and dad work. Nan doesn't work, has a couple of b2l properties, I suggested to her why doesnt she become a proper certified daycare proovider - it's possible to do from a home - just like she's doing now.

My situation, I'll just have to put my wife on payroll and give her a job in administrative support in my business. If they remove the CET. I'm making around 2x MIF, and the profits are going up each time so I will have no issue paying myself the MIF and giving her a job that meets minimum hours she needs as the primary caregiver for a 1 >2 year old.

It's a bit asinine. What sort of jobs are available that that fit around a childs school/childcare times? Jobs with short shifts from 9:30am to 3pm sharp. That are very local to them so transport times are next to 0.

The only jobs that will fit around that time are jobs in daycare facilities. The government is just going to force everyone into a MLM scheme of day care workers and daycare claimers. All the mothers of young children go get jobs in a daycare facility so they can fit around their kids daycare routine and just go and loook after someone elses kids, while their kids are looked after by their colleage.

anaveragemum

Tommy_77723 said:

Hi,

I have seen in the budget that the couples AET is being removed:

• Increasing the Administrative Earnings Threshold (AET): the Administrative Earnings Threshold (AET), the minimum amount a person can earn without being asked to meet regularly with their Work Coach, will be increased from the equivalent of 15 to 18 hours of earnings at the National Living Wage for an individual claimant. The couples AET, where a second member of a household may not be asked to look for work if their partner is working, will be removed entirely. These changes are expected to require over 100,000 additional claimants to meet more regularly with a Work Coach and take active steps to move into work or increase their earnings.
• Expanding work search requirements: these changes are expected to encourage over 700,000 lead carers of children on Universal Credit to look for work or increase their hours and will receive additional Work Coach support to do so. Previously they would have had only limited requirements, or no requirements at all.

But there has been no mention of the Household CET being removed?

This was the previous Household CET:
Claimants are placed in the light-touch regime if they are in the All-Work-Related Requirement (AWRR) group and have earnings between the Administrative Earnings Threshold (AET) and the CET.
This includes claimants with:
 individual earnings above their AET
no earnings and in a household with earnings above the AET
earnings below the individual AET but in a household with earnings above the household AET



Questions that I have:

1) Have the Government removed Household CET as well?

2) I earn above the 18 hours NLW threshold - but whilst my wife works, she does not earn above this. We would still above the Household CET if this was still in place. Will she have to increase her hours?

3) We have a 1 year old and a 4 year old - how will this impact things?

4) Is there a timeframe for this change? As there has only recently been an increase to 15 hours at NLW in February 2023.

So from how I have interpreted the change. 

There are no plans for CET to be removed or increased, confirmed by a DWP employee. 

CET for the non caring parent is 35 x NMW 
CET for caring parents will depend on age of child: 
Under 3 - no hours required 
3-4 16 hours at nmw  
5 -12 25 hours at nmw 
13+ 35 hours at nmw 

These are still per household though so either both or one can work as long as the CET is met you will be left alone. So 35 hours at NMW for a couple with an under 3
51 hours at NMW for a couple with 3-4 
60 hours at NMW for a couple with a 5+  
70 hours at NMW for a couple of 13+ 

If you earn between the AET and CET from September you will be required to increase your work commitments and be invites to more job searches at the job centre. 

NF2304

NedS said:

Tommy_77723 said:

NedS said:

tifo said:

NedS said:

calcotti said:

guysl80 said:

If you consider my situation I always earn 2 to 2.5 times of the AET expected from Jan 2023. Some months I have a nil award or less than £230 due to high income . But my wife is not working and so far she has not been asked to looking for a job.

Even though I earn more than the expected amount will she be asked to look for work once the new changes are implemented.

As already advised we don’t yet know clearly how things will work. We need for details. However my interpretation is that the implication is
- that if you earn over the AET threshold for one person but less than CET your partner would be required to look for work (unless excluded for some other reason), and
 - if you earned more that the CET for a couple then your partner would not be required.

I'd amend the above to read household CET, which for a couple is 2 times the individual CET. i.e, the working partner must earn enough for both to be over their individual CET's for the non-working partner not to have to look for work. If the working partner is only exceeding their own CET, then that will move them into the Working Enough regime, but not their partner.

As it stands at the moment, if 1 partner earns above the AET but below the CET then both are placed in light touch (personal experience though i then got LCW and then have work preparedness requirements) and no work search requirements. I would think that it would be the same with going above CET otherwise there is no point reaching that threshold. Thinking about it logically, 1 person in the couple can be earning £988 (current AET) and both have no work requirements yet it's said on here that if 1 couple earned above CET then the other person would need to work search or 1 person is would be expected to earn 2 x CET which is a high paid job.

Maybe, but don't forget the distinction between Working Enough and Light Touch, and the non-working partner is only in Light Touch by way of the Couple AET which is going to be abolished.

Earnings of £988 (current couple AET) would place both members of the couple into Light Touch, neither would be in the Working Enough regime (assuming 35h/week conditionality).

Earnings above the CET (around £1315; 35h x NMW) would place that person in Working Enough and their partner would still remain in Light Touch (due to the couple AET). If the couple AET is abolished (as proposed), they'd be in Intensive unless their partner earns enough for BOTH of them - 2 x CET, or approx £2630/month.

So the effect of the Couple AET rate being removed is that the working partner must now earn £2630 instead of £988 to get their partner out of looking for work.

Would this £2630 a month be before or after monthly deductions?

I earn above this before deductions (£2668).

But my take home pay is £1976

That would be net pay (take home) as that is what UC takes into consideration. Don't forget AET/CET thresholds will also rise in April by nearly 10% as NMW rises from £9.50 to £10.42/hour, so the CET is likely to be around £1410 (for 35h), and for 2 x CET would be around £2820 net after April.

Government policy intent here is pretty clear - they don't want partners sat at home not working. Both members of a couple will be expected to look for work if they are not the main carer of child under 3 or sick/disabled etc.

It’s actually based on gross earnings not net -
when you say UC take the amount you earn usually I think most people assume net as under the AET amounts are wages that wouldn’t have Tax and No deducted as below the tax threshold , I did try to post a link to the Parliament data stating it’s gross pay but I’m unable to post links! 

tifo

NF2304 said:

It’s actually based on gross earnings not net -
when you say UC take the amount you earn usually I think most people assume net as under the AET amounts are wages that wouldn’t have Tax and No deducted as below the tax threshold 

I thought it was net. Because the current AET is £10.42 x 104 hrs at £1,083.68 and there is tax and NI on this. There was also some when it was £988. There wasn't when it was lower. Over the year £438 of this is taxed and NI'd at £141.

If the claimant states an amount below this it might trigger a visit to the JC as it's below the AET. That means they look at net income not gross. If you deducted the £4 NI and £7 tax you'd show approx £1,073 which is below the AET.

NF2304

tifo said:

NF2304 said:

It’s actually based on gross earnings not net -
when you say UC take the amount you earn usually I think most people assume net as under the AET amounts are wages that wouldn’t have Tax and No deducted as below the tax threshold 

I thought it was net. Because the current AET is £10.42 x 104 hrs at £1,083.68 and there is tax and NI on this. There was also some when it was £988. There wasn't when it was lower. Over the year £438 of this is taxed and NI'd at £141.

If the claimant states an amount below this it might trigger a visit to the JC as it's below the AET. That means they look at net income not gross. If you deducted the £4 NI and £7 tax you'd show approx £1,073 which is below the AET.

It’s definitely gross pay , I can’t share the link but I’ll copy and paste from the government parliament data: 

Both amounts are based on gross taxable pay and the AET must be amended every

April as part of the annual prating of benefits. The AET does not apply to self-employed earnings.

A claimant will be allocated to the Light Touch regime if either their individual earnings or if in a couple their household earnings, are above the relevant threshold amounts, but below the CET, for example:

a single claimant with gross earnings at or over the AET but below their CET a claimant in a household with total gross household earnings above the household AET but below the household CET - this applies equally to both claimants in the household regardless which of them is working. 

Also copy and pasted from the uc advice website : 

 Unlike the CET, the individual / household AET are static amounts, but may be adjusted, usually in April, when benefits are uprated. Whilst both thresholds (CET & AET) are based on gross taxable pay, only employed earnings can contribute to meeting the AET (i.e. Self-employed earnings will not count towards it).

and lastly copy and pasted from the government data on the “working enough regime” which is the labour market that being above the household CET falls under: 

Conditionality Earnings Threshold

The CET ensures that a claimant with earnings equal to or above a certain level is not asked to carry out work-related activity. A claimant's or couple's gross earnings are used when assessing conditionality.

I’ve really looked into this as my husband earns above the household CET and we have young children with no suitable childcare options so we are reliant (hoping) on the Household CET overriding any individual AETs.