Help with the Complexity of Employing someone on Universal Credit.

I am about to employ a family friend who's on UC due to waiting for a new knee for the last 9months and can no longer do their current job as the pain is so bad (no wonder we are not productive when people are forced out of work due to waiting lists)

I am going to employ them one day a week in the office. 

I do not want to F Up their UC. They also get help with rent, so the max they can earn a month before penalties is £371

How frequently I pay, whether weekly or monthly, could cause them issues?

Anything else I need to watch out for? Holiday pay at the end of the contract could be an issue if it goes over £371.

If they join the workplace pension - is the employer element counted towards the £371?


Comments

  • ACG
    ACG Posts: 23,612
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    Have you spoken to your accountant? 
    I could be wrong, but I dont think you have to enrol them in a pension if they earn less about £150 a week (but that was a few years ago so could have changed). Less of an issue if this is not your first employee and you have a pension set up I suppose. 

    Your accountant will be a wealth of knowledge though, pick their brains. 
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Marcon
    Marcon Posts: 9,926
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    ACG said:
    Have you spoken to your accountant? 
    I could be wrong, but I dont think you have to enrol them in a pension if they earn less about £150 a week (but that was a few years ago so could have changed). Less of an issue if this is not your first employee and you have a pension set up I suppose. 

    Your accountant will be a wealth of knowledge though, pick their brains. 
    All the rules/earnings/ages neatly set out here: https://www.nestpensions.org.uk/schemeweb/nest/employers/about-workplace-pensions/qualifying-employees.html
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • ACG
    ACG Posts: 23,612
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    Marcon said:
    ACG said:
    Have you spoken to your accountant? 
    I could be wrong, but I dont think you have to enrol them in a pension if they earn less about £150 a week (but that was a few years ago so could have changed). Less of an issue if this is not your first employee and you have a pension set up I suppose. 

    Your accountant will be a wealth of knowledge though, pick their brains. 
    All the rules/earnings/ages neatly set out here: https://www.nestpensions.org.uk/schemeweb/nest/employers/about-workplace-pensions/qualifying-employees.html
    Looking at that it is £192 a week now. 

    I would still just call my accountant, its far easier for him to just tell me what I need to do. 
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Grumpy_chap
    Grumpy_chap Posts: 14,374
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    SA100 said:
    I am about to employ a family friend who's on UC due to waiting for a new knee for the last 9months and can no longer do their current job as the pain is so bad (no wonder we are not productive when people are forced out of work due to waiting lists)

    I am going to employ them one day a week in the office. 

    I do not want to F Up their UC. They also get help with rent, so the max they can earn a month before penalties is £371

    How frequently I pay, whether weekly or monthly, could cause them issues?

    Anything else I need to watch out for? Holiday pay at the end of the contract could be an issue if it goes over £371.

    If they join the workplace pension - is the employer element counted towards the £371?


    This seems an odd way of thinking about things.

    As an employer, you should be paying the market rate for the work that the individual will be doing.

    Keeping monthly salary below a certain amount to avoid reductions in UC seems illogical.  Surely, if the individual earns more so they receive less in UC, the overall finances for the individual will be improved regardless.

    From April, NMW will be £11.44.  For one day (8 hours) per week, that will be £366.08 for 4-week month and £457.60 for 5-week month.  I am not sure whether the £371 figure you quote is for now or for after April (or will be unchanged).

    The rationale of an employer apparently saying they will restrict earnings so that UC is unaffected seems wholly illogical and would be an unintended consequence of the rules if, indeed, that is how the rules work.
  • Marcon
    Marcon Posts: 9,926
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    ACG said:
    Marcon said:
    ACG said:
    Have you spoken to your accountant? 
    I could be wrong, but I dont think you have to enrol them in a pension if they earn less about £150 a week (but that was a few years ago so could have changed). Less of an issue if this is not your first employee and you have a pension set up I suppose. 

    Your accountant will be a wealth of knowledge though, pick their brains. 
    All the rules/earnings/ages neatly set out here: https://www.nestpensions.org.uk/schemeweb/nest/employers/about-workplace-pensions/qualifying-employees.html
    Looking at that it is £192 a week now. 

    I would still just call my accountant, its far easier for him to just tell me what I need to do. 
    Complete waste of money using your accountant rather than reading a couple of paragraphs in plain English, but each to their own!
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
  • ACG
    ACG Posts: 23,612
    First Anniversary Name Dropper First Post I've helped Parliament
    Forumite
    Marcon said:
    ACG said:
    Marcon said:
    ACG said:
    Have you spoken to your accountant? 
    I could be wrong, but I dont think you have to enrol them in a pension if they earn less about £150 a week (but that was a few years ago so could have changed). Less of an issue if this is not your first employee and you have a pension set up I suppose. 

    Your accountant will be a wealth of knowledge though, pick their brains. 
    All the rules/earnings/ages neatly set out here: https://www.nestpensions.org.uk/schemeweb/nest/employers/about-workplace-pensions/qualifying-employees.html
    Looking at that it is £192 a week now. 

    I would still just call my accountant, its far easier for him to just tell me what I need to do. 
    Complete waste of money using your accountant rather than reading a couple of paragraphs in plain English, but each to their own!
    It costs me nothing to call him and pick his brains. He charges me to do my accounts, picking his brains is included in the price.  
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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