Forum Home  →  Discussion  →  Universal credit  →  Thread

U/C - How are people actually better off!

 

J.Mckendrick
forum member

Welfare Benefits Team - Phoenix & Norcas

Send message

Total Posts: 360

Joined: 16 March 2012

Again like many of my queries sorry to be extremely slow on the uptake but please can you put me in the right direction. I believe this is a case where the more in-depth you think about it the more confused you are.

Client aged 36 residing in a one (1) bed flat in South Norfolk claims U/C and receives the following weekly amounts….

All work related activity group (the old JSA as we know it) £73-10 per week

Housing element for one (1) bed flat = £92-98 per week

Total U/C for the week = £166-08


Client is able to obtain £50-00 in net payment for weekly work.

If client goes ahead and earns the £50-00, the way I read it is that client physically keeps hold of £18-50 of it (this being 37% of £50-00) but loses £31-50 of it (this being 63% of £73-10) ie his £73-10 is reduced by £31-50!

So keeps £18-50 but loses £31-50 so £13-00 down on the deal ie £73-10 - £31-50. Obviously I am not getting it but how is client better off?

Please can someone explain and give other examples (if you have the time) how this U/C makes people actually better off.

Many thanks,

     
Jon Blackwell
forum member

Programmer, Lisson Grove Benefits Program Ltd, Brighton

Send message

Total Posts: 471

Joined: 18 June 2010

I think you’ve double-counted the taper reduction…

J.Mckendrick - 21 April 2017 10:35 AM

..If client goes ahead and earns the £50-00, the way I read it is that client physically keeps hold of £18-50 of it (this being 37% of £50-00) but loses £31-50 of it (this being 63% of £73-10) ie his £73-10 is reduced by £31-50!..

I’d say that they “physically” keep hold of the £50 earnings and their UC is reduced by £31.50

I’ve heard a similar argument about HB and rent - people have quite often suggested to me that if your HB has gone down by £10 and so you have to pay £10 more rent then you’re obviously £20 worse off (!)

 

     
Gareth Morgan
forum member

Managing Director, Ferret, Cardiff

Send message

Total Posts: 1385

Joined: 16 June 2010

You need to look at total income which, in this case, means (ignoring rent which is effectively passported for both)

Legacy benefits
JSA £73.10 - earnings (after £5 disregard )of £45) = £28.10 .  Total income = £78.10

Universal Credit (converting to weekly at x 12 / 52 which is the method used for most conversions in the UC regulations)
UC £73.34 - earnings (after 63% taper applied) of £31.50 = £41.84.  Total income = £91.84

Universal Credit (converting to weekly at x 12 / 365 * 7 which is a method used in a small number of conversions in the UC regulations)
UC £73.14 - earnings (after 63% taper applied) of £31.50 = £41.64.  Total income = £91.64

Either way this case means that the claimant is £13 odd better-off on UC than JSA.

     
J.Mckendrick
forum member

Welfare Benefits Team - Phoenix & Norcas

Send message

Total Posts: 360

Joined: 16 March 2012

Gareth - is John’s brief explanation also correct.

     
Daphne
Administrator

rightsnet writer / editor

Send message

Total Posts: 1403

Joined: 14 March 2014

Yes it is :)