Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18
DasCoin: A 5-Minute Guide to How It Works - 15th Mar 18
Stock Market Downward Pressure Mounting - 15th Mar 18
The Stock Market Trend is Your Friend ’til the Very End - 15th Mar 18
6 Easy Ways to Get What Women Want, for Less! - 15th Mar 18
This Isn’t Your Grandfather’s (1960s) Inflation Scare - 15th Mar 18
Eye Opening Stock Market Index, Volatility, Charts and Predictions - 15th Mar 18
Gold Cup At Cheltenham – Gold Is For Winners, Not For Gamblers - 15th Mar 18
Upcoming Turnaround in Gold - 14th Mar 18
Will the Stock Market Make Another Correction this Year? - 14th Mar 18
4 Ways To Writing An Interesting Education Research Paper - 14th Mar 18
China Toward Sustainable Economic Growth - 14th Mar 18
Stock Market Direction Is No Longer Important - 14th Mar 18
Trade Tariffs Defeat Globalists and Return Prosperity - 14th Mar 18
Stock Market Crash is Underway and Cannot be Stopped! - 14th Mar 18
Are Energy Sector Stocks Bottoming? - 14th Mar 18
Nasdaq Stocks Soars to New Record High After Strong Job Reports - 14th Mar 18
Bitcoin BTCUSD Elliott Wave View Calling for Rally toward $15,000 - 13th Mar 18
Hungary’s Gold Repatriation Adds To Growing Protest Against US Dollar Hegemony - 13th Mar 18
Record Low Volatility in Precious Metals and What it Means - 13th Mar 18
Tips for Writing and Assembling the Classification Essay - 13th Mar 18
Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story" - 13th Mar 18
Stock Market Selloff Showed Gold Can Reduce Portfolio Risk  - 13th Mar 18
Silver Does it Again! Severe Consequences - 12th Mar 18
Has the Stock Market Rally Run Out of Steam? - 12th Mar 18
S&P 500 at 2,800 Again, Stock Market Breakout or Fakeout? - 12th Mar 18
The No.1 Energy Stock To Buy Right Now - 12th Mar 18
What Happens Next When Stock Market Investor Sentiment is Neutral - 12th Mar 18
Economic Pressures To Driving Gold and Silver Prices Higher Long-Term - 12th Mar 18
Labour Sheffield City Councils Secret Plan to Fell 50% of Street Trees Exposed! - 12th Mar 18
Stock Market Uptrend Resuming? - 11th Mar 18
Bond Market Interest Rate Yields Are Rising Again… Stocks Are on Thin Ice - 11th Mar 18
Death of Europe's Greenest City, Police State Sheffield Labour Council to Fell 50% of Street Trees - 11th Mar 18
Do All Bull Stocks Markets Need to Have a Bearish Divergence? - 11th Mar 18
An Inflation Indicator to Watch, Part 3 - 11th Mar 18
Online Stock Trading Tips - Tips about Online Trading & Day Trading - 11th Mar 18
NDX makes a new high. What does that mean? - 10th Mar 18
Blue Chip Companies on Track for $800 billion Buyback Record in 2018 - 10th Mar 18
Cheap Gold Stocks Basing - 10th Mar 18
An Introduction to Online Forex Trading - 10th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients

Politics / UK Benefits Nov 18, 2017 - 04:28 PM GMT

By: N_Walayat


The Universal Credits nightmare is set to continue for the working poor this Christmas as over 100,000 people look set to receive no payment over the festive season. The reason being that Universal Credit can not cope with something as simple as that there being 5 fridays (pay days) during December, where such months can tip recipients over the monthly limits for claiming Universal Credit as UC is not able to do the simple calculation of averaging earnings throughout a year that is the case for the likes of tax credits.

Work and pensions website states:

8. If you’re paid weekly

If you’re paid weekly by your employer, you will get either 4 or 5 payments of earnings within a Universal Credit assessment period. Depending on the amount you get paid this may affect your Universal Credit.

When you have 5 weekly earnings payments within an assessment period, your income may be too high to qualify for Universal Credit in that month.

If this happens you will be notified that your income is too high and you will no longer get Universal Credit.

You can re-apply the following month as you should only get 4 wage payments in your assessment period then.

You will need to be prepared for a month when you get 5 wage payments in one assessment period and budget for a potential change in your monthly Universal Credit payments.

For instance take someone earning £150 per week, then that is treated as £600 earned during November, and £750 earned during December, where depending on individual circumstances could mean that the person is no longer eligible for any universal credit for December and thus has to reapply in January and potentially have to wait as long as a further 6 weeks to get any money. Therefore no Universal Credits for 2 months. Of course December is not the only month with 5 pay weeks as the same is likely to repeat in March 2018 thus creating a nightmare for claimants.

This is just the latest example of the nightmare that Universal Credits is turning out to be with even worse to come for families on tax credits who have built up sizeable cash ISA savings pots under the tax credits regime which could mean that they will no longer be entitled to ANY benefits as the tax credit system takes taxable earnings into account and not capital whilst Universal Credit in line with out of work benefits such as Income Support are subject to income withdrawal of £1 per week for every £250 of capital above £6000, with zero entitlement to benefits if capital exceeds £16,000.

So the tax credit system has been a significant encouragement for families to save in Cash ISA's as capital holdings for example of £50,000 currently have zero impact on tax credit awards.

So today's Tax Credit recipients face a doomsday under Universal Credits as they are switched over to the new benefit over the next 2 years as many families will lose ALL entitlement to the benefit. So a family of 6 will go from currently receiving £12,400 in tax credits per year to receiving ZERO under Universal Credits! If they have capital (ISA savings) of over £16,000.

So those £40k to £50k nest eggs built up under tax credits translate into ZERO entitlement to Universal Credit, for which the maximum limit is £16k and £6k being the optimum maximum. Which means hard working families who have built up sizeable ISA holdings need to start considering their options right now else they face their Universal Credits Doomsday of ZERO entitlement.

Options such as paying off ones mortgage, to going on a spending spree, buy a new car ? 2 new cars? family holiday of a lifetime? Though I would not advocate buying a bigger mattress to stuff ones cash under!

Perhaps its time to start planning to upgrading the greatest tax free vehicle of all, ones home, either by extending or moving and thus utilising ones Cash ISA holdings before the UC doomsday hits!

The bottom line is that Universal Credits does not work for working more just does not pay, and saving for ones future definitely does not pay! Furthermore, UC is designed to penalise families that rent over those who own their homes who have the get out of jail card of dumping their £40-£50k cash ISA holdings into their mortgages and thus increasing the equity in their homes, whilst those who rent are stuck and either have to spend most of their savings or lose all of their benefits even if their savings are only a fraction of the equity that home owners enjoy.

So no, Universal Credits just does not work as it's inability to cope with months with 5 pay days instead of 4 illustrates.

By Nadeem Walayat

Copyright © 2005-2017 (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules