Universal Credit explained

[Borchester]

Universal credit provides a basic allowance of £324 per month plus housing costs. You then lose 55p off your credit for every £1 you take home. This means that if you earn £10 an hour your net gain is only £4.50 an hour.

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If you earn enough to pay national insurance you will pay 12%, then losing 55% of the remaining £8.80, leaving you with a net gain of only £3.96 an hour.

Once you hit the income tax threshold your combined NI and income tax deductions are 32% leavining you £6.80, 55% of which is deducted from your universal credit, leaving you with a net gain of only £3.06 an hour.

.

If your pay is below £10 an hour these figures will be even worse.

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And yet if you were renting privately with a rent of below 500 a month, which is less than average, and had a combined rent and living allowance of £800, you would need to take home substantially more than £1400 per month to rise above the universal credit threshold.

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Clearly for those on low paid and/or part time contracts this might not be possible, and the rate of clawback is clearly going to disincentivise people from working more hours.

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Still worse, anyone with less than 16 hours a week in contracted employment must look for another job as a condition of claiming help. So those companies that like to employ people on contracts of less than 16 hours are going to keep losing them because they are forced to look for another job as a condition of welfare support.

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This is the stark reality. Universal credit is designed to guarantee work makes you better off but the rate of clawback, especially since it takes no account of taxes already deducted, is too punitive to avoid creating what is still a de facto benefits trap.

That is show business Steve.

In my experience it is no use relying on governments. The best thing to do is provide a service folk want and ask to be paid in cash.

For example, if sinx = p/q, then solve for 0<x< π

2cot^2 (2x) + 3cosec (2x)=0

You may say what is the point of this ? Dunno, but if you can teach the kids how to crack it, then you will earn a bloody sight more than £10 an hour. And no nonsense about paying tax either.

[srb7677]

Universal credit provides a basic allowance of £324 per month plus housing costs. You then lose 55p off your credit for every £1 you take home. This means that if you earn £10 an hour your net gain is only £4.50 an hour.

.

If you earn enough to pay national insurance you will pay 12%, then losing 55% of the remaining £8.80, leaving you with a net gain of only £3.96 an hour.

Once you hit the income tax threshold your combined NI and income tax deductions are 32% leavining you £6.80, 55% of which is deducted from your universal credit, leaving you with a net gain of only £3.06 an hour.

.

If your pay is below £10 an hour these figures will be even worse.

.

And yet if you were renting privately with a rent of below 500 a month, which is less than average, and had a combined rent and living allowance of £800, you would need to take home substantially more than £1400 per month to rise above the universal credit threshold.

.

Clearly for those on low paid and/or part time contracts this might not be possible, and the rate of clawback is clearly going to disincentivise people from working more hours.

.

Still worse, anyone with less than 16 hours a week in contracted employment must look for another job as a condition of claiming help. So those companies that like to employ people on contracts of less than 16 hours are going to keep losing them because they are forced to look for another job as a condition of welfare support.

.

This is the stark reality. Universal credit is designed to guarantee work makes you better off but the rate of clawback, especially since it takes no account of taxes already deducted, is too punitive to avoid creating what is still a de facto benefits trap.