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I used to work in customer service field with a certain wage,but decided to switch to social care field to work in live-in basis as the payment is attractive. I got a job and made a call to Universal credit to report that I started to work. I was told that I need to send a copy of my first payment, and I would require to pay 0.63 pence from each pound I earned. Definitely it makes less than I was receiving in customer service field. How is it possible? Looks like never get a chance to crawl out from poverty. Would someone with better knowledgeable able to explain situation and what is the best way to avoid this robbery?
Originally posted by zarazata
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Universal credit is a payment made to you to increase the amount of money you get from working. The lower your earnings the higher the amount of UC and so also the higher your earnings the lower the UC you get.
As your net pay increases (ie earnings after tax NI and pension have been deducted) your UC is reduced by 63 pence for each pound you get. In other words each pound increase in your net pay makes you 37 pence richer. This continues until your earnings are above the level for the payment of UC. In this way UC tapers off as earnings increase rather than suddenly stopping.
Details are here....
https://www.entitledto.co.uk/help/Earnings-taper-Universal-Credit