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TOPIC: Working part time on Universal Credit question...

Working part time on Universal Credit question... 24 Jan 2018 11:07 #5874

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Can someone look at this and tell me if I`m going mad, or if I`m understanding this correctly?

UC - For aged 25 and over is £317.82p a month

Example:
I find a job that is 16 hours a week at national minimum wage (which will be £7.83p an hour after April 2018) so I would earn £501.12p a month. So this means I`m earning £183.30p MORE than the UC upper limit each month.

So my question is.....why would the job centre still be asking me to (a) find more hours or (b) get another job? Would my summary of this be correct, or am I missing something? I know UC has a `taper` rate once you earn more than a certain amount, but I`m not sure where this comes into the picture or is that what they call a working allowance? Where you can earn `up to` £192 a week before it affects any reductions? I`m sure I read that this working allowance is only for people who claim ESA but don`t want to confuse matters here by linking it to my original question.

Just want to know if I`m right or wrong here because I`m thinking about this looking for full time work thing they seem to push with UC and for people to be working full time, when the reality is, not so much the hours someone works, but what they EARN that counts?
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Working part time on Universal Credit question... 24 Jan 2018 16:49 #5876

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comply or die wrote:
Can someone look at this and tell me if I`m going mad, or if I`m understanding this correctly?

UC - For aged 25 and over is £317.82p a month

Example:
I find a job that is 16 hours a week at national minimum wage (which will be £7.83p an hour after April 2018) so I would earn £501.12p a month. So this means I`m earning £183.30p MORE than the UC upper limit each month.

So my question is.....why would the job centre still be asking me to (a) find more hours or (b) get another job? Would my summary of this be correct, or am I missing something? I know UC has a `taper` rate once you earn more than a certain amount, but I`m not sure where this comes into the picture or is that what they call a working allowance? Where you can earn `up to` £192 a week before it affects any reductions? I`m sure I read that this working allowance is only for people who claim ESA but don`t want to confuse matters here by linking it to my original question.

Just want to know if I`m right or wrong here because I`m thinking about this looking for full time work thing they seem to push with UC and for people to be working full time, when the reality is, not so much the hours someone works, but what they EARN that counts?

If I understand correctly the idea is for example is a single person over 25 without any restriction is expected to earn 35x (hours) at the national minimum rate.

So if you earn lets say £30 per hour which is not uncommon then a days work is all that is needed to satisfy the powers that be.

So in answer to "is it what you earn that counts" then as I interpret it the answer is yes not the actual numbers of hours worked.
This is an interesting read on how they intend to manage in work claimants
www.gov.uk/government/publications/developing-in-work-support-for-people-claiming-universal-credit/universal-credit-in-work-progression-randomised-control-trial

And the results
claimants.www.gov.uk/government/uploads/system/uploads/attachment_data/file/601741/in-work-progression-trial-update-april-2015-to-october-2016.pdf
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Working part time on Universal Credit question... 25 Jan 2018 10:18 #5880

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That`s what I thought dboy but with the housing element also included in monthly UC payments, I`m presuming that any monthly salary earned would also need to cover the monthly rent costs within the calculation? Meaning, does this basis UC standard rate for a single person of £317.82p include our housing/rent element within it? Or is the rent element a separate payment?

I was calculating what someone could earn on a monthly basis in order for them to be free from claiming this £317. 32p altogether (looking at the calculation example I did above) but wasn`t sure if this would also cover rent costs. So for example, if my weekly rent was around say £80, I would also need to factor this into my monthly costings which would be a deduction of £320. :unsure:

So if this is what UC pays me to cover my monthly rent, I`m thinking this is NOT part of the £317.82p living expenses they pay for the standard single rate?
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Working part time on Universal Credit question... 25 Jan 2018 11:32 #5881

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Found this:

www.gov.uk/universal-credit/what-youll-get

So we are paid the standard rate at £317.82p a month and then scrolling down that page, it states Housing Costs as `extras`. So this explains it. The Housing/Rent costs are added onto the Standard rate if/where necessary, as are the other elements like LCW amounts etc....

So in my case, I would get the monthly standard rate (317.82p, the housing element (£ X monthly rent amount) and the ESA/LCW rate all added together monthly.
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Working part time on Universal Credit question... 25 Jan 2018 18:10 #5891

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So lets work this out see if we come to the same conclusion, taking your first example,

I could have this wrapped round my neck but here goes,

Monthly Standard allowance £317.82 Single and 25 or over
Disability or health condition £318.76
Help towards housing costs £ 80.00

A total monthly award of £716.58

Your working 16 hours per week and earn £501.12 per month so now we look at this,
What the earnings taper is and how this affects Universal Credit
The Universal Credit earnings taper is a reduction to your Universal Credit based on your earned income. The taper rate sets the amount of benefits a claimant loses for each pound they earn. The earnings taper rate is currently 63%.

This means for every pound you earn over your work allowance (if you are eligible for one) your Universal Credit will be reduced by 63 pence.

To work out the earnings taper that applies to your award:

Take your total monthly earnings figure after tax, National Insurance and relevant pension contributions have been taken off
Deduct your monthly work allowance, which is the amount you can earn without your benefit being affected (if you are eligible for one)
Apply the taper rate by multiplying the remaining earnings by 0.63
This is the amount that will be taken from your Universal Credit maximum amount when calculating your award.

So we take your total monthly earnings figure after tax, National Insurance and relevant pension contributions have been taken off, deduct your monthly work allowance, which is the amount you can earn without your benefit being affected in this example the amount would be £192 as we get help towards Housing costs
then apply the taper rate by multiplying the remaining earnings by 0.63
Lets keep it simple and assume you pay no NI or tax or pension.

So you are earning £501.12
deduct your monthly work allowance £192.00

This gives us £309.12

We now apply the taper rate £309.12 x 0.63 this gives us a total £194.74.

So £194.74 will be taken of your Universal credit award which we calculated to be £716.58

So now your Universal credit monthly award will be £521.84

We take your UC award, add them to your monthly wage to see how it affects your total monthly income.

UC £521.84
Wages £501.12
Total monthly income now £1022.96
previous amount £716.58

So roughly those 16 hours per week in this example will give you an extra £308 per month but I could be very much mistaken.
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Working part time on Universal Credit question... 25 Jan 2018 18:50 #5894

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Sorry dboy, my poor brain is scrambled just trying to take all of that in! I don`t think a `work allowance` is something anyone gets unless they are eligible? So someone on ESA for example like myself might qualify for a work allowance, but I have no idea! I`m still trying to get the hang of the basic UC standard payment and the housing element added together before adding anything else to it! But your right about the LCW (Limited Capability for Work) element being added for anyone who is on ESA and claiming UC. This would also be added to the Standard allowance each month.

dboy wrote:

Monthly Standard allowance £317.82 Single and 25 or over
Disability or health condition £318.76
Help towards housing costs £ 80.00

A total monthly award of £716.58

Yes, adding these together would give you the total for the month if the housing element and the LCW element were added to the Standard Allowance. But the LCW is only there if you qualify for it. There are different rates for WRAG & Support group. Now known as LCW and LCWRA.
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Working part time on Universal Credit question... 26 Jan 2018 03:31 #5896

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comply or die wrote:
Sorry dboy, my poor brain is scrambled just trying to take all of that in.

My apologies comply for muddying the waters,it is not your brains that are scrambled it is mine.

I will try again to get this right, I am interested to know how different scenarios affect different groups so I hope with your help, thoughts and knowledge of ESA we can get to a concrete answer at least with the basics of UC with this as an example although it also brings up other questions I have as I am sure it will you, hopefully we can tackle those later.

Just to be sure for this example we are clear on the facts,

You are single, aged 25 or over on ESA / LCW therefore not entitled to the higher rate and made your claim after April 3rd 2017 (if ESA was awarded before 3rd April 2017 then you would then eligible to an extra £126.11 per month but lets ignore that for now if that is the case ) and I think your right we can also ignore the work allowance in this example.

We are also assuming the National minimum wage is £7.83

So your monthly income on UC alone would be based on,

£317.82 standard allowance per month for a single person 25 and over
£320.00 Rent element per month (80 pw rent)

This gives you a total UC award of £637.82 per month.

So you decide to work, how would it affect that award ?

You work part time 16 hours per week at minimum wage and your monthly earnings after taking away any NI contributions,tax or pension schemes is £501.12.

Now we apply the taper

£501.12 x 0.63 = £315.00

So £315.00 is taken from your monthly UC award.

This now gives you an adjusted monthly UC award of £322.80 ( £637.82- £315.00)

Therefore your total monthly income now is £823.94

This comprises £322.82 adjusted UC award and £501.12 from your monthly wage.
So for 16 hours per week work at minimum wage you have increased your monthly income by £186.14.

If you earned £501.12 per month working 1 hour a week then the same still applies.

Let me know if that seems right to you then halfway there,

I am also trying to find out what happens when your monthly income gets to a level that means you are only entitled to the housing element ? what is the minimum amount per month do you have to earn to have them completely off your back ? the list could be endless.
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Working part time on Universal Credit question... 26 Jan 2018 14:40 #5902

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Off the top of my head dboy, my situation on UC would be:

Standard rate £317.82p a month
Rent Element £320 a month

Total £637.82p

Now I currently get ESA WRAG payment of £206.40p every two weeks, so £412.80p a month (claim made before April 2017) but I`m not sure that sum would be more or less under UC, so lets add it for the sake of argument and the total would then be £1050.62 :S

Now I know I`ve got that LCW sum wrong because until I look up the award now given under UC for Limited Capability for work, I`m adding what I get NOW, rather than what I would be awarded on UC, so that total does sound rather high adding the Standard rate, the housing element AND the ESA amount together?

So I think it`s the ESA amount that may be pushing the total so high?
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Working part time on Universal Credit question... 26 Jan 2018 14:54 #5903

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Also meant to add dboy that when we get the Standard rate of UC (£317.82p) and we find a job, that`s when the taper rate starts to deduct amounts from the Standard rate, so going back to my first post on this, if I worked 16 hours and earned £501.12p a month (before tax/NI), I would be above that Standard UC rate and £183.30p would be deducted from the £501.12p.....but not £ for £.....only by 63p for every £ earned. That`s when my head starts spinning because it`s easier for me to deduct each £ from the figure rather than 63p! It`s no wonder claimants are going around confused and in meltdown!

You wrote:
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What is the X 12? Is that 12 months? Brain has melted, sorry!!!!
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Working part time on Universal Credit question... 26 Jan 2018 15:53 #5904

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www.moneyadviceservice.org.uk/en/articles/universal-credit-an-introduction

Taken from this website:

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So....if you DON`T qualify for a WORK ALLOWANCE (you have to be either on ESA/LCW or caring for dependent children) then the taper rate just applies to the Standard rate of UC which we all get anyway, the £317. 82p a month.

So I WOULD qualify for a Work Allowance of £192 on top while on ESA/LCW and earn UP TO that amount before it would affect my UC payments. But this would only apply as long as I was on ESA. So Work Allowances are only if you `fit` those criteria. And I would need to be fit enough to work, which kind of defies the purpose of ESA.
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Working part time on Universal Credit question... 26 Jan 2018 16:03 #5905

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comply or die wrote:
Also meant to add dboy that when we get the Standard rate of UC (£317.82p) and we find a job, that`s when the taper rate starts to deduct amounts from the Standard rate, so going back to my first post on this, if I worked 16 hours and earned £501.12p a month (before tax/NI), I would be above that Standard UC rate and £183.30p would be deducted from the £501.12p.....but not £ for £.....only by 63p for every £ earned. That`s when my head starts spinning because it`s easier for me to deduct each £ from the figure rather than 63p! It`s no wonder claimants are going around confused and in meltdown!

You wrote:
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What is the X 12? Is that 12 months? Brain has melted, sorry!!!!
£501.12p your earnings from part time work.
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Working part time on Universal Credit question... 26 Jan 2018 16:16 #5908

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So I WOULD qualify for a Work Allowance of £192 on top while on ESA/LCW and earn UP TO that amount before it would affect my UC payments. But this would only apply as long as I was on ESA. So Work Allowances are only if you `fit` those criteria. And I would need to be fit enough to work, which kind of defies the purpose of ESA.
We are assuming for the purpose of the example you are making a fresh claim for UC after April 2018 ESA/LCW and so the work allowance is not taken into consideration.

www.gov.uk/health-conditions-disability-universal-credit
You might get an extra amount of Universal Credit if you have a health condition or disability that prevents you from working or preparing for work.

Your monthly payment is based on your circumstances, for example your health condition or disability, income and housing costs.
.
If you made a new Universal Credit claim on or after 3 April 2017 and have limited capability for work, you won’t get the extra amount
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Working part time on Universal Credit question... 26 Jan 2018 17:20 #5910

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quote: If you made a new Universal Credit claim on or after 3 April 2017 and have limited capability for work, you won’t get the extra amount

Yes, I knew about the extra £29 being withdrawn from April 2017. I still get it because my award is continual, but if I ever lost (at appeal) and had to make a new claim for LCW in future, I would only get the new/lesser rate. I was basing my calculations on what I get now! :oops:
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Working part time on Universal Credit question... 26 Jan 2018 20:52 #5912

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but if I ever lost (at appeal)

Well yes the way I see it that is based on how would it affect you if you were on UC in April 2018 and took on part time work, in order to achieve that given your present circumstances you would have to end your present claim and make a new UC claim, if you end up with new style ESA / LCW then you would be not be entitled to any extra income, if you ended your present claim and chose to make a new UC you would lose the extra income and still not be entitled so that is why I dismissed it.

I think the only scenario where you would get to keep the extra income on UC in your circumstances and your circumstances remain the same would be during the migration for those on legacy benefit so more stuff to look into.

Least got a long enough to prepare for it when it eventually forced upon us, I think no sensible person would voluntarily close a legacy claim down and move onto UC looking at all the pros and cons, I would be happy to stand corrected.
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Working part time on Universal Credit question... 27 Jan 2018 09:13 #5917

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I signed on JSA between my last fit for work/appeal win dboy , so I`ve never been on UC thankfully. But like you and many others, I`m gearing myself up for that if and when it happens, but I won`t be claiming it unless (a) I have no other choice and (b) am not naturally migrated onto it while my ESA/LCW claim is still live.

What I`ve learned so far is the Standard rate for over 25`s and the Housing element being a separate payment. As is council tax but that isn`t part of UC anyway. The work allowance is only applied if you have dependent children or LCW. So anyone not in those two categories can dismiss the work allowance. The Standard rate is the work allowance for all claimants generally and money earned will be tapered down accordingly. So those are the main basics of UC. And the crazy 35 hours work search of course.
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Working part time on Universal Credit question... 27 Jan 2018 15:39 #5924

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comply or die wrote:
I signed on JSA between my last fit for work/appeal win dboy , so I`ve never been on UC thankfully. But like you and many others, I`m gearing myself up for that if and when it happens, but I won`t be claiming it unless (a) I have no other choice and (b) am not naturally migrated onto it while my ESA/LCW claim is still live.

What I`ve learned so far is the Standard rate for over 25`s and the Housing element being a separate payment. As is council tax but that isn`t part of UC anyway. The work allowance is only applied if you have dependent children or LCW. So anyone not in those two categories can dismiss the work allowance. The Standard rate is the work allowance for all claimants generally and money earned will be tapered down accordingly. So those are the main basics of UC. And the crazy 35 hours work search of course.
Yes that is about it, those calculations also reflect my circumstances, over 25, single no dependants, no health issues, so if we both made a new claim for UC we would both receive the same amount of money and the taper rate would affect us at the same rate.

Now what is wrong with the calculation and something that needs to be taken into consideration is UC is paid per calendar month not every 4 weeks, so it is something to think about when working out if work pays.
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Working part time on Universal Credit question... 27 Jan 2018 17:30 #5925

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That`s true dboy, the calendar month thing. I multiplied 4 x £73.10p (the weekly JSA amount) and it comes to £292.40p a month. UC Standard rate is £317.82p per month, so £25.42p more than the JSA amounts added together. But I suspect this `extra` £25.42p is the difference made `up or down` depending on each month being 31 days or 29/30 days? For a moment I thought UC was being more generous....and then I realised it`s the calendar month ploy!
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Working part time on Universal Credit question... 27 Jan 2018 22:00 #5927

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comply or die wrote:
and then I realised it`s the calendar month ploy!

Yep worth remembering when you trying to work out if it pays to take the job,it does balance itself out over the year, and though a seemingly trivial aspect could in fact be a crucial amount in an argument with your work coach after taking into consideration travel expenses and extra costs you might incur working, if they are trying to push you into the job rather than choice.

After all I presume if it can be shown you are £1 per week better off then it would be hard to argue a case for not taking / refusing the job.

Taking this example further then now need to find out how these 16 hours affect council tax if at all,
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Working part time on Universal Credit question... 28 Jan 2018 10:30 #5939

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Council tax (unlike Housing benefit) is a separate thing but your absolutely right dboy that we need to find out:

(a) How much can we earn part time before it has a knock on effect for CT?

I pay £10.50p a month at the moment and am claiming ESA WRAG. So depending on your own local authority, I suppose it`s down to what they charge in regards someone`s income? So even being unemployed means they can still demand some form of payment for council tax.

There should be an upper limit amount, say for example if someone earns £125 a week or less they may not pay any council tax or housing benefit. But if your weekly earnings are above that, they could charge a small amount from it?
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Working part time on Universal Credit question... 29 Jan 2018 19:21 #5949

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Comply, I been burning the midnight oil going through the calculations again they were wrong, could still be wrong,,have a look at this tell me what bits confuses still or are just plain wrong, this is still very much a work in progress and something that will affect me in the future so well worth the effort for warned is forearmed as they say.

I have left housing benefit out of the calculation for now, rent is paid weekly not calendar month there is also the rent free weeks to consider and so complicates the matter slightly as to what the actual monthly award would be.

Council tax is also difficult to include, different bands and different councils having different rules so left that out also for now.
I am also assuming his income from work means he is below the threshold for NI or Tax.

Also I need to know the actual real WEEKLY income that is how most people budget finances and that is how most people are paid.

According to www.gov.uk/universal-credit/what-youll-get and how I interpret it,

Adam is single over 25 no dependants has a illness / disability and makes a NEW claim for Universal credit.
He is found to have Limited Work Capability after a work capability assessment.

Adam will receive
Standard allowance £317.82pcm
Real weekly income £317 x 12 /52 = £73.15
Adam also receives help to cover his housing benefit and is entitled to a Work allowance £192.00pcm, this is the amount Adam can earn per calendar month before it affects his universal credit award.

Adam decides to do 16 hours per week part time work earning £7.50PH (National minimum wage) and wants to know how it will affect his Universal Credit

We need to find Adams calendar month income in order to apply the taper correctly.
£7.50 x 16 x 52 /12 = £520 pcm.

Now we need to apply the taper after taking into account the work allowance
£520 (Income)-£192(Work allowance) =£328 x 0.63= £206.64 to be taken from Adams Universal credit award

So that would leave a universal credit award of £121.36 per calendar month.
£328.00-£206.64 = £121.36

So now to get Adams calendar monthly income taking into consideration the above factors when working part time,
Work £520.00
Universal credit after deductions £121.36
£520+£121.36=£671.36 per calendar month.

Which leaves us with a Real weekly income of £154.92.(£691.36 x 12 /52 =£154.92)
So in summery for 16 hours work per week Adams Real weekly income is now £154.92

Legacy benefits and natural migration. www.cpag.org.uk/content/universal-credit-and-natural-migration
If Adam was on ESA but lets say moved house to a full service area, they would then have to make a new claim for UC and be classed as having limited Work Capability.

Adam would then receive a extra amount to his Universal Credit award if he had made the claim for ESA before April 3rd 2017

If that is all correct then in your case it would simply be a case of adding the extra money to the above calculation and in my case single no dependants 25 and over no health issues removing the work allowance.

So that would give you an extra £126.11pcm doing the above calculations taking that into account we come to,
Not working £443.10pcm or real weekly amount £102.44
Working 16 hours part time £757.29pcm or real weekly £174.75

In my case I would have to remove the work allowance.

Not Working £317.82pcm or real weekly amount £73.34

Working 16 hours part time
£520 x 0.63 =£327.60
£317.82 (UC award) - £327.60 (taper rate applied)leaves me with a negative sum of £9.78 this amount is taken from housing benefit so now I am paying a proportion towards my rent.

Until I earn enough to eventually pay all my housing costs then I am stuck with the possibility of a sanction which would make a major impact on my income.
So please have a good look show me where you think / know it is wrong it or there some confusion, I am determined to keep bashing away at it until get it right.
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