Universal Credit.

[durhamborn]

http://ssac.independent.gov.uk/pdf/uc-draft-regs-2012-memorandum.pdf

More meat on the bones of Universal Credit.The BIG bits have slipped unoticed so far but they are huge.

Take housing costs.(SMI and Housing Benefit and LHA).

They are lumping all three together under "Housing costs".Scroll down to 91.

"There is to be a two year limit on housing costs for everybody in the full conditionality group",

Thats people unemployed AND people earning less than 35 hours at minimum wage if single,or 70 hours if a couple.

So they are only paying housing costs for two years,SMI,Housing Benefit and LHA.If your not off Universal Credit by then your housing element stops.

Children.

Scroll to section 45.

THE CHILD ELEMENT COMPRISES OF TWO RATES.,one rate for the first/only child,then a REDUCED rate for subsequent children.

Under tax credits each child gets around £55 a week,so 3 children £165+£10 family element+working tax credit.

Under universal credit the first child it seems is going to be £55 but all after that less.This is huge,and for people on say £26k a year with 3 children could mean they go from £300 a month in tax credits now to 0 under universal credit because the award will be much less so will be tapered away much lower down the income scale.

There are no numbers yet but if the second rate comes in around £30 a week people are going to see big cuts.

Seems they are going to set this well below what children cost so instead of extra children making more disposable income it makes less,removing the incentive.

There is also lower down a section where it seems appeals against working capacity assesments are being abolished though its a bit vague to be sure.

How has The Guardian missed all this?Seems this is where the the £10 billion extra cuts are,and id bet IDS raised limiting benefits to two children as a smokescreen,they wont,theyl simply half the benefit rates for extra children right through and this will remove benefits from massive amounts of people with 2 or 3 children around the £25k income level.

[thecrashingisles]

How has The Guardian missed all this?

They haven't received the memo from the Labour party yet.

[durhamborn]

They haven't received the memo from the Labour party yet.

There more lower down under the work capability bit.Now if both people in a couple qualify they both get a boost in benefits.Under UC that stops and only the higher award is given of the two people.In blunt terms,if both are seen as being unfit for work instead of £35+£35 extra they will now only get one £35.(figures on what is paid now).

If UC goes through ,and that document is final apart from the figures then a few BTL landlords are going to be in for a shock,as are many people getting tax credits and just managing the mortgage.Another nail in house prices

[Spork of Damocles]

There is the small issue of getting the computer system to support this up and running. Prior experience with root and branch changes to IT systems at the DWP (or the rest of gubmint) is not a happy one.

[durhamborn]

There is the small issue of getting the computer system to support this up and running. Prior experience with root and branch changes to IT systems at the DWP (or the rest of gubmint) is not a happy one.

Of course that will be almost certain.Whats interesting is these bits were never mentioned all the way through the debates on UC.Everyone presumed the rates would all be the same as tax credits etc.Its clear now they wont be.It could be this was planned all along,or more likely Osborne demanded is at a later date.Once/if UC is in it would be very hard to change the basic allowances so it seems they are cutting them from the start.

Cuts in the future will be around the taper rate (65%) and also the allowed earnings disregard rates.They will proably keep those frozen so any inflation wage increase cuts the UC by 65%.

In a HPC regard the housing costs two year limit is huge.If they stick to it.

[alexw]

http://ssac.independent.gov.uk/pdf/uc-draft-regs-2012-memorandum.pdf

More meat on the bones of Universal Credit.The BIG bits have slipped unoticed so far but they are huge.

Take housing costs.(SMI and Housing Benefit and LHA).

They are lumping all three together under "Housing costs".Scroll down to 91.

"There is to be a two year limit on housing costs for everybody in the full conditionality group",

Thats people unemployed AND people earning less than 35 hours at minimum wage if single,or 70 hours if a couple.

So they are only paying housing costs for two years,SMI,Housing Benefit and LHA.If your not off Universal Credit by then your housing element stops.

Children.

Scroll to section 45.

THE CHILD ELEMENT COMPRISES OF TWO RATES.,one rate for the first/only child,then a REDUCED rate for subsequent children.

Under tax credits each child gets around £55 a week,so 3 children £165+£10 family element+working tax credit.

Under universal credit the first child it seems is going to be £55 but all after that less.This is huge,and for people on say £26k a year with 3 children could mean they go from £300 a month in tax credits now to 0 under universal credit because the award will be much less so will be tapered away much lower down the income scale.

There are no numbers yet but if the second rate comes in around £30 a week people are going to see big cuts.

Seems they are going to set this well below what children cost so instead of extra children making more disposable income it makes less,removing the incentive.

There is also lower down a section where it seems appeals against working capacity assesments are being abolished though its a bit vague to be sure.

How has The Guardian missed all this?Seems this is where the the £10 billion extra cuts are,and id bet IDS raised limiting benefits to two children as a smokescreen,they wont,theyl simply half the benefit rates for extra children right through and this will remove benefits from massive amounts of people with 2 or 3 children around the £25k income level.

All i can say is wow...... how many millions of people have no choice but to work part time while claiming HB to afford somewhere to live? We all know employers employ on these hours on purpose for the tax benefits. Given that the gov is also doing everything it can to keep housing costs high I can't see how what they are planning will work. The backlash against the government is also going to be immense, from employer groups, those potentially made homeless, and from wider society. Something somewhere will have to give.

Edited to add - Under our current housing system the only ones I can see benefiting from this are immigrants living 10 to a house and thus able to afford rents on a group basis while undercutting singeletons and couples for low paid work.

Edited November 7, 2012 by alexw

[Self Employed Youth]

Unemployed only claim £5billion.

Housing benefit £25Bn

Workers £30 Bn

Pensioners £100Bn

They can't starve the unemployed - they need them to be form surplus labour and be compelled to work.

Pensioners are the ochlocracy - their incomes cannot be harmed.

Housing benefit is pinning up the system.

The cuts therefore must fall on the workers with children (who are often subsidised [income controlled] - through their additional need for housing space of which their is a decreasing amount).

[durhamborn]

All i can say is wow...... how many millions of people have no choice but to work part time while claiming HB to afford somewhere to live? We all know employers employ on these hours on purpose for the tax benefits. Given that the gov is also doing everything it can to keep housing costs high I can't see how what they are planning will work. The backlash against the government is also going to be immense, from employer groups, those potentially made homeless, and from wider society. Something somewhere will have to give.

Yes and the thing with UC is that as a single person,say a single mother,once the child is 13 you go in full conditionality so unless you earn 35 hours worth of NMW your in that part.You only come out of it once you earn at least what 35 hours at minimum wage is.Once the child is 5 you have to be available in school time so again still under full conditionality.

For a couple once the child is 1 ,one part of the couple comes under full conditionality so again the housing costs come into play.So if the child is 5 youd need to earn one between the couple NMW x 51(hours.)If not you lose the housing element after 2 years.

As i said if its right,and that is the governments latest document on UC the changes are huge.Boiled down for most people its a 2 year limit on benefits on the biggest part,housing.Nobody seems to be picking up yet on these parts of UC.

[mrtickle]

Great news. I almost feel superstitious, I don't want anything to jeopardise these cuts happening!

[alexw]

Great news. I almost feel superstitious, I don't want anything to jeopardise these cuts happening!

Your an idiot.

We have the tax system saying to employers employ people on ~16-24h a week contracts, and now we have the gov saying to low end workers you must work more than 35h a week. How's that going to work??

Also in the current economic climate there are not enough positions to employ everyone in part time work, never mind full time.

Couple that with how the government is doing everything possible to keep housing costs high, and there is simply no way what they are doing is economically viable, and its also morally repugnant.

[RufflesTheGuineaPig]

There is the small issue of getting the computer system to support this up and running. Prior experience with root and branch changes to IT systems at the DWP (or the rest of gubmint) is not a happy one.

It's just a few tables and queries. It's not rocket science.

[durhamborn]

Your an idiot.

We have the tax system saying to employers employ people on ~16-24h a week contracts, and now we have the gov saying to low end workers you must work more than 35h a week. How's that going to work??

Also in the current economic climate there are not enough positions to employ everyone in part time work, never mind full time.

Couple that with how the government is doing everything possible to keep housing costs high, and there is simply no way what they are doing is economically viable, and its also morally repugnant.

The thing with tax credits i always saw them as a trap.Brown brought them in rather than deal with the destruction of decent full time jobs and mass immigration.They are very lucrative for people with children,in fact so lucrative it became almost worthless to get a better job,work longer hours,do overtime etc.Alongside this they were paid for of course by higher taxation on fuel etc.Millions of people then get to the stage where the children reach 18 and they are in their 40s and suddenly they see that their NMW job,with very few skills paying extra tax to pay for the next batch of tax credit payments has trapped them forever in poverty.

We cant know what the affect will be.It might benefit people longer term by reducing rents,making employers have to pay more,make people consider the affects of family size,relationships etc.It might mean people try to get better jobs,save,plan ahead.

As you say though,a large part of the economy is now based around companies paying NMW on part time hours so the government tops up.The transition period could prove disastrous over say 5 years.

On the rent side it looks like there is going to be a 3 month period where you have to wait similar to SMI now so it would be rent paid for 2 years,none for 3 months then paid again for 2 years.So not stopped for good.The 2nd child reduction is the big one for people ,households on £25k+ as now on that level youl still get around £220 a month in tax credits for 2 children but under UC youd get around £30.3 children you get around £440 a month now £150 under UC.

[doahh]

84. There is to be a waiting period of [x] months before owner occupier claimants can receive help with their housing costs. This is based on the principle that it is reasonable to expect owner occupiers to make some provision, whether by insurance or savings, to fund their housing costs for a period in the event of a change in their circumstances such as unemployment or sickness. If help with housing costs stops because an adult in the benefit unit goes into work, another waiting period must be served if that work ceases.

Remember Citizens, work pays!

122. The capital rules in Universal Credit will generally follow the rules that apply now in existing benefits. The maximum capital limit for claiming Universal Credit is to be £16,000 for either a single person or a couple where that capital is held jointly.

123. Certain capital assets may be disregarded. These categories of capital include

...

•

amounts earmarked for special purposes such as house purchases or essential repairs to property

124. In some cases, a period of 6 months is specified for capital to be disregarded. There is also provision to extend the period in reasonable circumstances.

I wonder if delaying a purchase due to high house prices is a good enough reason

141. The taper or withdrawal rate is expected to be set at 65 per cent. In simple terms, that would mean that 35 pence in every pound earned would be kept; meaning that claimants would be £35 better off for every extra £100 of net earnings. Significantly this means that many people in work would receive substantially more support than under the current benefits system. The taper will be applied to earnings net of tax, National Insurance and pension contributions.

£60 per week better off in a 35 hours a week minimum wage job?

And for the self employed:

169 ... Claimants will be eligible for only one Start-Up period in their working lives.

170 Claimants in a Start-Up period will not be required to satisfy work-search or availability requirements. However, they will be required to attend quarterly adviser interviews ...

171. Claimants with self-employed income (whether they are required to meet work-search conditionality requirements or not) will be required to report it to DWP on a monthly basis.

187. If the claimant does not report his/her income within 7 calendar days, he/she will receive notification that his/her household payment has been formally suspended and will be terminated if the missing income report is not received within four weeks of that date.

Benefit cap limits

the total level of entitlement to welfare benefits is to be limited to £500 a week for couple and lone parent households and £350 a week for single households. For Universal Credit these amounts are to be converted to monthly figures to match Universal Credit’s monthly assessment period. For couples and lone parent households the cap is to be £2016. The cap for single adults is to be £1517 per month;

209. There will be a grace period whereby the benefit cap will not be applied for nine months to those who have been in work continuously for the previous 12 months.

The term full conditionality group is mentioned several times, but at no point is it defined; fantastic!

Edited November 8, 2012 by doahh

[Self Employed Youth]

£60 per week better off in a 35 hours a week minimum wage job?

That sounds like a dream!

I'd be about £43/week better off before taking int account transport costs.

There are some large discrepancies in the system.

Edited November 8, 2012 by Self Employed Youth

[@contradevian]

By the sounds of it we are going to get our long overdue revolution. Thousands deprived of housing benefit and other benefits in an economy sewn up by landowners and rentiers and where jobs are scarce, and the UK will resemble a scene out of 28 days later..

There just isn't going to be enough part time/low paid work to go round.

When such a claimant has received

help with housing costs for a period of two years these payments will stop and will

not be reinstated until a claimant has had a break in claim and has served a further

waiting period.

Edited November 8, 2012 by Secure Tenant

[billybong]

Then in addition to all the contradictions with that new benefit system there's the other ongoing contradictions and daftness like the support for eu loans to help to export UK motor industry jobs overseas - mentioned on earlier threads.

[Si1]

They haven't received the memo from the Labour party yet.

Gordon stole the crayons

[durhamborn]

Remember Citizens, work pays!

I wonder if delaying a purchase due to high house prices is a good enough reason

£60 per week better off in a 35 hours a week minimum wage job?

And for the self employed:

Benefit cap limits

The term full conditionality group is mentioned several times, but at no point is it defined; fantastic!

"Full conditionality Group".

This is all to do with 35 hours at NMW.You are in full conditionality group until your family unit earns the same and above the same money as 35 hours x NMW.

For a single person no children its 35 hrsxNMW do roughly £211 a week.Earn less than that you in full conditionality group.Work 10 hours but earn £212 a week your not in it.

A couple with no children its 35 hours x NMW x 2 (two people).

Couple with children over 13,same as above.

Couple with a child over 1 but below 5 ,its 35 hrs x NMW

Couple with child over 5 but below 13 its 35 hrs x NMW + 16 hrs NMW so 51 hrs between the couple.

Single parent child over over 5 but below 13 ,16 hrs x NMW (school time and term time)

Single parent child over 13, 35 hrs x NMW.

So as an example ,a couple with the youngest child over 13 have to earn between them NMW x 70 hours.If the household earns between them £430 a week there in no conditionality,if they earn between them £390 there is full conditionality until they earn at least £430.

Any unit not meeting those levels loses housing costs after 2 years.Also you must attend job centres etc and prove you are trying to increase your hours/get a better job etc.

The big difference with tax credits is its counting both adults in the house and a much lower level where full time work is expected.

Under tax credits a couple can get full benefits with a child at 14 with 24 hours a week BETWEEN the couple.Under UC to escape full conditionality they have to work 70 hours at NMW.

Those numbers/expectations could change slightly but thats how it stands at the minute,and the government have stated they will "change" conditionality rates to get certain outcomes.So its obvious they might tightn them more in future.

Im sure we will get percentages out soon of people who will fall under full conditionality,but a rough figure is everyone on out of work benefits and a very large proportion of people on tax credits.

[Gone baby gone]

I think the assumed profit for the self employed who claim tax credits is going to have a nasty unintended consequence.

In the last decade a lot of people were moved off the dole and into self employment - they were encouraged to do this in order to keep the unemployment figures looking reasonable.

The Tories aren't thinking this sort of stuff through.

Big increases in people "becoming unemployed" and then the cost of implementing it will dwarf the savings both of these hitting home before the next election.

The icing on the cake is that they are pissing off some of their key voters - the working poor and those who earn high salaries.

[Georgia O'Keeffe]

I think the assumed profit for the self employed who claim tax credits is going to have a nasty unintended consequence.

In the last decade a lot of people were moved off the dole and into self employment - they were encouraged to do this in order to keep the unemployment figures looking reasonable.

The Tories aren't thinking this sort of stuff through.

Big increases in people "becoming unemployed" and then the cost of implementing it will dwarf the savings both of these hitting home before the next election.

The icing on the cake is that they are pissing off some of their key voters - the working poor and those who earn high salaries.

It only applies to new claimants from the date of inception, those already claiming will gradually be moved over by 2017 via change of circumstance so it wont really start hitting home until after the election as new claimants will know no different to the new system

Edited November 8, 2012 by Georgia O'Keeffe

[AThirdWay]

I think the assumed profit for the self employed who claim tax credits is going to have a nasty unintended consequence.

In the last decade a lot of people were moved off the dole and into self employment - they were encouraged to do this in order to keep the unemployment figures looking reasonable.

The Tories aren't thinking this sort of stuff through.

Big increases in people "becoming unemployed" and then the cost of implementing it will dwarf the savings both of these hitting home before the next election.

The icing on the cake is that they are pissing off some of their key voters - the working poor and those who earn high salaries.

The Tories are playing the long game. They know that a Gary Glitter comeback tour is more likely than them winning the next election with Cameron at the helm, so they're planting this land mine for the next Labour Government.

[durhamborn]

It only applies to new claimants from the date of inception, those already claiming will gradually be moved over by 2017 via change of circumstance so it wont really start hitting home until after the election

This is another very grey area."Change of circumstance".

They havent defined that.It could be simply the birth of a child etc.

BUT it could be once you tip into a new conditionality group.It could be when you move home,increase hours,one child hits 18,one hits 5,one hits 13 etc etc.

This will be a crucial area.If they include all those things as a change in circumstance then most people will move from the "no cash losers" group very quickly.

It will probably be based around conditionality but even here people will move pretty quickly through the groups.

So if your child is 4 in a couple,when the child is 5 conditionality changes,so you have had a change in circumstance so will lose the cash protection.

Its looking to me even more complex than what we have now,so selling it as simpler rings hollow to me.

It seems more like its designed to make being in the system a complete nightmare to "encourage" you to reach a level where your not in it.

Welfare needed reform,that is certain as tax credits are a disaster as they encourage employers to pay NMW and hugely hurt anyone not getting them,but UC seems much more complex than it was sold as and i just cant see how millions of people can get out of the conditionality groups ,and then how the DWP can micro manage all the work focused interviews etc.

Looking at things almost everyone on any UC will see housing costs stopped for 3 months every 2 years if renting.

Could be 6 months as they havent put in the numbers yet.

[Tonkers]

There is the small issue of getting the computer system to support this up and running. Prior experience with root and branch changes to IT systems at the DWP (or the rest of gubmint) is not a happy one.

I was at my local NHS clinic the other week. They were very apologetic for the delay - the nurse took me into her office and windows was updating itself and restarting. The entire clinic was non functional for 45 minutes due to this!

I wanted to mention defragging the hard drive and some basic PC house keeping tips, but it would have earned a blank stare.

They are not given even basic computer training.

[Eddie_George]

Unemployed only claim £5billion.

Housing benefit £25Bn

Workers £30 Bn

Pensioners £100Bn

They can't starve the unemployed - they need them to be form surplus labour and be compelled to work.

Pensioners are the ochlocracy - their incomes cannot be harmed.

Housing benefit is pinning up the system.

The cuts therefore must fall on the workers with children (who are often subsidised [income controlled] - through their additional need for housing space of which their is a decreasing amount).

Yup, them's the voters.

Edited November 8, 2012 by Eddie_George

[SarahBell]

The thing with tax credits i always saw them as a trap.

They are.

They killed overtime - which in turn led to the rise in doorstep loans.

Why earn your way through a tricky patch if it'll screw up your free govt cash - just borrow a bit at 1765% for a couple of weeks, months...

They trapped the UK tax payer into thinking that part time work was ok.

It's not.

We have enough jobs in the UK if we stop employed (non uk) EU citizens.