Does everyone get 12 months transitional when migrating to UC

SpeedSouth

Currently I get CTC.  I will not qualify for UC when the migration letter drops.  Will I get the 12 months regardless of the situation.

Currently in order to qualify for CTC I make a payment to my pension from my taxed salary to bring us under the limits.  I see others have questioned the UC staffs understanding of this process as well.

I've had similar conversations with TC staff who have not known about it as well and for some renewals have to have multiple conversations to get it sorted.

Newcad

You are mixing a couple of different things up there.

The 12 months savings disregard is not the Transitional Protection. The 12 months disregard has nothing to do with income, it is to do with savings.

The 12 months disregard is a different protection which applies to the savings/capital limit of £16,000 above which UC is not normally payable.
As there is no equivalent limit in Tax Credits then for those migrating from TC's to UC that £16K savings limit will be disregarded (ignored) for the first 12 months. If you still have above £16K in savings after that 12 months then your UC will stop.

By contrast Transitional Protection (Transitional Addition, Transitional Element) does not have a set end date, it is an extra payment above the standard benefit rates to (sort of) ensure that you are not worse off after migration than before. (It doesn't always work like that and never has always made up the full difference, despite what MPs say in the media).

Any TA/IP/TE awarded lasts until it is 'erroded' - that means until the standard benefit rates that you are entitled to catch up to what you are being paid with the TA.
To put it another way you don't get any UC increases until the standard rate UC payments catch up to your UC payments with the UC-TE. (Each time your standard entitlement increases you TE goes down by the same amount until the TE has all gone - erroded away).

Note that TA's are not a new thing just with UC, there was a TA when people migrated from Incapacity Benefit/Income Support to ESA starting back in 2010 (and in some cases that's still being paid because it hasn't been fully eroded yet).

The paying of extra monies from you salary into a pension pot is a different thing to savings, that extra pension payment is about reducing your income to get under the Tax Credit income limits.

UC look at that differently, but it should still be allowable if you inform them, you will probably have to fight for it though - see this posted earlier today: https://forums.moneysavingexpert.com/discussion/comment/80285658/#Comment_80285658

Spoonie_Turtle

SpeedSouth said:

Currently I get CTC.  I will not qualify for UC when the migration letter drops.  Will I get the 12 months regardless of the situation.

Currently in order to qualify for CTC I make a payment to my pension from my taxed salary to bring us under the limits.  I see others have questioned the UC staffs understanding of this process as well.

I've had similar conversations with TC staff who have not known about it as well and for some renewals have to have multiple conversations to get it sorted.

Why will you not qualify - too high earnings?  Do you know this from a benefit calculator?  Those don't include any transitional element so in this situation aren't entirely accurate.

UC works on take-home pay after tax, NI and pension contributions, so you definitely can pay extra in to bring your income down for UC purposes (subject to limits set by the pension provider, but UC itself does not impose a limit).  It can just be a bit of a battle to get it implemented, due to inadequate staff training.

NedS

Regarding pension contributions:

UC is based on net (take home) pay. Pension contributions are (or should be) deducted in full for UC purposes.

When you pay into an employers pension scheme and these pension contributions happen through your pay packet, everything works automatically as HMRC report to UC your net take home pay after tax, NI and pension conts have been deducted.

Where things become a lot more difficult is when you receive your take home pay, and then make further pension contributions into a personal pension such as a SIPP. You would have to declare these the UC every month and get them to accept that and deduct it from your monthly earnings before manually re-calculating your UC. There is a lot of misunderstanding around this and often it is a fight to get UC to accept what they must do. Consequently, it is FAR EASIER if you can make all of your pension contributions through your employer's scheme directly from your pay packet (and later transfer them elsewhere if that is what you want).

SpeedSouth

Thanks all. That's cleared up a confusion I didn't know I had.

I know I won't be eligible as I will have over £16k so once that 12 months disregard is gone they will stop anyway.

I had read the earlier the post about the difficulties in convincing the staff of the issue.  Most of pension contributions are via a work scheme, but I make a payment annually to bring it down which is an acceptable method with CTC and shakes out at the renewal stage each year.

Under UC for that 12 months would I infact need to make monthly contributions and declare that each month instead? Reading peoples posts that does not sound an easy process.

Newcad

It's been announced today that you can now use the Entitledto benefits calculator to show how much you could get when migrating to UC if you currently receive tax credits and have money, savings and investments over £16,000.
https://www.gov.uk/guidance/tax-credits-and-some-benefits-are-ending-move-to-universal-credit
The Entitledto calculator can be found here: https://www.entitledto.co.uk/benefits-calculator/Intro/Home?cid=16799cf6-4c7c-4f58-8507-4110ff43d5a4

NedS

SpeedSouth said:

Under UC for that 12 months would I infact need to make monthly contributions and declare that each month instead? Reading peoples posts that does not sound an easy process.

Yes, UC is a monthly benefit so you would need to make any pension contributions monthly to reduce your earnings in that month for UC purposes. If you made one large annual contribution, it would only affect the month in which you made it (reducing your earnings in that month to zero, maybe), and all other months would reflect your normal earnings amount. This is one of the differences between tax credits working on your annual income and UC working on monthly incomes.