65% disregard - help!

Having taken up paid employment whilst recieving UC, the claimant then reaches their maximum disregard (whatever this may be). Any further paid employment after this point will result in the claimant keeping 35 pence out of every £1-00 earnt but losing 65 pence ie a general loss of 30 pence in the £. Therefore would this not encourage claimants to just earn up to the max disregard because any additional work would result in the claimant losing money or am I missing the point on something here!

For each extra pound of net earnings, 65p is taken off their UC.  They’re left with an extra 35p for each pound as an increase in net income.

Contrast that with today’s scheme for part time work where after a, lower, disregard they lose £1 for every extra £1 of net earnings.  This is one area where UC does do better.

Although there is the council tax benefit factor, if applicable, whereby no-one knows whether they’ll gain or lose.

Even the ‘improved’ disregard is a myth if you compare it with current disregards and 30+ hr credit in tax credits.  When we looked at comparing cases under UC the only group to really benefit were those where there was no housing costs to be included and of course the higher your housing costs the more it impacts.  If we now factor in the expected loss of 100% council tax benefit for those of working age, can’t see UC making work pay and there is an expectation that claimants will increase hours.  UC is very condiitonal and the current protection against loss of HB if personal benefits are lost/suspended will not be there.  Our work in the social housing sector enables problems to be identified through stops on HB., the removal of this relationship will mean the proactive help we provide will not be possible in UC system. The underlying aim is savings so it is not going to be a more generous benefit system.