U/C - How are people actually better off!
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.
I think you’ve double-counted the taper reduction…
..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 (!)
You need to look at total income which, in this case, means (ignoring rent which is effectively passported for both)
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.
Gareth - is John’s brief explanation also correct.
Yes it is :)