Universal Credit and Salary Sacrifice

Moved over from tax credits to UC a few weeks ago and waiting for first statement. Can I clarify which amount from my wages UC uses and how/from who they get the figure? I work 36 hours per week and earn approx £2400 after tax/NI but approx £250 is deducted via salary sacrifice for a car lease leaving me with the £2400 after everything has been taken off. I understand that UC use my net wage for their deductions (is this right?) however would they use the £2400 figure or £2650 with the salary sacrifice back on? Sorry - very new to UC so not quite understanding how it all works yet!! Thank you!! :)
«1

Comments

  • sevenhills
    sevenhills Posts: 5,792
    First Anniversary Name Dropper First Post
    Forumite
    I am not familiar with using the term 'salary sacrifice' except in relation to a pension.
  • Yamor
    Yamor Posts: 312
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    Universal Credit currently ignores all benefits-in-kind, so they will only take your net salary of £2,400 into account.
  • Yamor said:
    Universal Credit currently ignores all benefits-in-kind, so they will only take your net salary of £2,400 into account.
    Thank you so much :) Can I clarify how they get the accurate salary from my employer? If I go on the HMRC app it only shows my gross salary with tax/NI contributions but does not show my overall net salary with salary sacrifice deducted aswell? Thank you.
  • Yamor
    Yamor Posts: 312
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    It sounds like your benefit-in-kind has been "payrolled" by your employer. UC should still be able to see the full information as the RTI will include the relevant information (for employee NICs, the payrolled benefit-in-kind is not included, and there is a separate field in the RTI for "gross pay for NICs purposes").
    I haven't actually seen this in practice though, so make sure to check your UC statement to ensure the benefit-in-kind really is ignored. 
  • peteuk
    peteuk Posts: 1,216
    First Post Name Dropper First Anniversary Combo Breaker
    Forumite
    For my understanding (sorry - Im trying to learn about UC) 

    OP - depending on circumstances eg single/single parent/ SP with children/Couple +- children etc will affect the amount they can earn and claim UC.   Either way £2400 or £2650 is over that limit for single adult and couple no children (figures take from web but doesnt say what year) So likely to be award £0 UC but would get the years transition period.  The document I was looking at also talks about other elements which will obviously affect this including housing. 

    Is that correct. 
    Proud to have dealt with our debts
    Starting debt 2005 £65.7K.
    Current debt ZERO.
    DEBT FREE
  • peteuk said:
    For my understanding (sorry - Im trying to learn about UC) 

    OP - depending on circumstances eg single/single parent/ SP with children/Couple +- children etc will affect the amount they can earn and claim UC.   Either way £2400 or £2650 is over that limit for single adult and couple no children (figures take from web but doesnt say what year) So likely to be award £0 UC but would get the years transition period.  The document I was looking at also talks about other elements which will obviously affect this including housing. 

    Is that correct. 
    If their max UC is above £1320 (55% of 2400) - very possible even without children if they rent - then there would still be UC entitlement.

    I don't understand how transitional protection etc. works so can't comment there.
  • Thanks for your replies - claim is joint with husband who is carer for our autistic son. Son on enhanced PIP. Also have a daughter. Husband will get carer element. Own home with mortgage so no housing allowance from UC. I hope we may get some UC but not sure yet. Was getting approx £180 per month on tax credits.
  • Okay, so you'll have the higher work allowance which means £631 ignored of your wages, so they'll deduct £972.95 (or £1100.45 if they use the higher, non salary-sacrifice amount).

    Your UC award would be made up of*

    Standard allowance couple £578.82
    Child element x2 £315.00 + £269.58
    Disabled child £456.89
    Carer element £185.86

    Total £1806.15

    *Assumptions made: at least one child born before April 2017, as you said son claims PIP
    Severely disabled child element for enhanced daily living component of PIP.  Otherwise the lower element is £146.31
  • poppy12345
    poppy12345 Posts: 17,717
    First Anniversary First Post Name Dropper
    Forumite
    Okay, so you'll have the higher work allowance which means £631 ignored of your wages, so they'll deduct £972.95 (or £1100.45 if they use the higher, non salary-sacrifice amount).

    Your UC award would be made up of*

    Standard allowance couple £578.82
    Child element x2 £315.00 + £269.58
    Disabled child £456.89
    Carer element £185.86

    Total £1806.15

    *Assumptions made: at least one child born before April 2017, as you said son claims PIP
    Severely disabled child element for enhanced daily living component of PIP.  Otherwise the lower element is £146.31

    That's assuming the son that claims PIP is still a qualifying young person.
  • InAPickle76
    InAPickle76 Posts: 77
    Name Dropper First Post
    Forumite
    edited 24 November 2023 at 8:42PM
    Thanks Spoonie_Turtle and Poppy12345 :) Yes our son is still a qualifying young person (just!). He turns 19 early next year so will be taken off our claim in  August and likely meaning we would not get any UC at this point. He is on PIP enhanced daily living and enhanced mobility so we should get the higher rate disabled element.

    Really appreciate you taking the time to work all this out. I understand they deduct carers allowance pound for pound so will deduct the month's equivalent rate of CA in addition to salary deduction?
Meet your Ambassadors

Categories

  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.8K Work, Benefits & Business
  • 605.6K Mortgages, Homes & Bills
  • 172.4K Life & Family
  • 246.7K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards