WTC Migration To UC First Payment

gandalf24

Looking for some advice, just got our first UC payment, migration from WTC and it is £39 for a month. We previously got £35 per week working tax credit.

I got the severe disability element of WTC

Working Couple, total earnings £2400 and declared £26k savings
Thought the transitional protection payment was supposed to make the payments the same as what we got on WTC. for a year and then it would stop.

Quite confused, any pointers would be Appreciated before I contact UC helpline.

Yamor

Check your payment statement on your UC account online (go to Payments on the Home tab). Does it have a line about "Transitional protection" just before the "Total before deductions"?

If not, it likely hasn't been calculated yet (they would put the line there with a zero if they had already calculated it, but decided you weren't entitled to TP).

If it is there, but you are still getting less from UC, then I could check for you if you post up your most recent award notice from tax credits received prior to claiming UC (not the in-year finalisation notice). Make sure to anonymise it before posting it up.

gandalf24

Thanks Yamor,

It Says transitional protection of £781.27. Which seems quite low, I will have a look later on for my WTC recent award notice and post it. Thanks for your help

gandalf24

Hi found my last award, total was £1832.70 

Yamor

What do HMRC have down as your income details on the award?

gandalf24

£27141 total

Yamor

How is that broken down? And which year is it for?
If it is an estimate for 23/24, what does it say your total income was for 22/23?

gandalf24

This was my tax credit award from HMRC
 for  year 6/4/23 to 5/4/24.
My earning £11879 , partners £15262 = £27141 This was our earnings for 2022/3.

Migrated to UC Middle Feb 24.

Yamor

gandalf24 said:

This was my tax credit award from HMRC
 for  year 6/4/23 to 5/4/24.
My earning £11879 , partners £15262 = £27141 This was our earnings for 2022/3.

Migrated to UC Middle Feb 24.

I have crunched the numbers, and the level of transitional protection they have given you matches precisely with the correct amount if you do not include the fact that you had savings in the TP calculation. This is quite a common error.

However, the £39 UC payment you did actually get only comes out correct if they also did not take into account the capital in the main UC calculation either. This is a far less common error.
Can you check your payment statement to see if there is a deduction due to your capital?
Another possibility is that your earnings were not exactly £2,400 for the month.
Can you tell me the exact amount of earnings as stated on the UC payment statement?

gandalf24

Hi 

At the money savings and investments bit it says £0 and zero deductions. On the initial registration I put in savings of £26k.
Exact  earnings £2401.55.

I just can't get my head around how  we go from WTC £35 per week to £39 per month with UC as I thought the transitional protection was to keep UC the same or as good as previous benefit (WTC). I know that it will cease after 1 year due to savings, is there any way to check on UC login savings details I have put in. 

I may have to contact UC and get them to update my savings. I see you can do this online but it is asking for a change date and not giving the option of a genuine application error.

Thanks for your assistance in rhis

Yamor

OK, so that is what I thought.

Your TP is approx. £174 lower than it should be, but your actual UC entitlement is still about right, because they didn't make the equivalent £174 reduction due to your savings in the actual UC entitlement calculation either - i.e., the errors cancel out.

So, coming to your question as to why you are getting much less than you were getting on tax credits:
It is because your tax credits were based on gross income of £27,141, which equates to net monthly income of about £2,194.
Basically, your tax credits entitlement (which was based on past income details) had not yet "caught up" to your true current income.
Unfortunately, there is no transitional protection for this, as the rules are clear that the transitional protection is to be calculated based on what your UC entitlement would have been had your income been equal to what HMRC thought your income was.
As such, there is no protection when your income actually turns out to be higher than that.