Confused about how Universal Credit was calculated, can someone help?

larryharvey

I receive the full payment monthly. Not currently employed.

For the month of July, I reported £140 take home pay TOTAL.

Got a letter today telling me that my UC for July now owes £77 and will be taken from future payments.

How did £140 see my payment reduced so much? Have they made a mistake?

Newcad

It's simply the 55p in the pound earnings taper rate.

For each pound that you earn as wages 55p is deducted from your UC.

£140.00 x 0.55 = £77.00 to be deducted.

larryharvey

Thank you. 

larryharvey

I was under the impression that there was a minimum you could earn every month without any deductions?

Alice_Holt

larryharvey said:

I was under the impression that there was a minimum you could earn every month without any deductions?

    The work allowance only applies in certain circumstances:
       https://www.gov.uk/government/publications/universal-credit-work-allowances/universal-credit-work-allowances#work-allowance

Newcad

larryharvey said:

I was under the impression that there was a minimum you could earn every month without any deductions?

That only applies if you have a 'Work Allowance' because you/your partner are responsible for looking after a child or have been assessed as having  Limited Capability for Work.

https://www.gov.uk/government/publications/universal-credit-work-allowances/universal-credit-work-allowances#work-allowance

larryharvey

Thanks all

larryharvey

Another question - with working tax credits, used to be you would work 12 hours a week and the total you received WTC would not be effected. Is it now the case, on UC, that as soon as you start earning the taper rate comes into effect and you start to see the amount you receive decrease immediately? With no buffer?

Spoonie_Turtle

larryharvey said:

Another question - with working tax credits, used to be you would work 12 hours a week and the total you received WTC would not be effected. Is it now the case, on UC, that as soon as you start earning the taper rate comes into effect and you start to see the amount you receive decrease immediately? With no buffer?

As explained above in the comments about the Work Allowance, unless you have a child on your claim or Limited Capability for Work, yes it applies to all of your earnings.