ESA - managed migration over to UC

Lola21

I get New Style ESA - Support Group and PIP Enhanced Daily Living and Mobility. My husband is working 16 hours a week and we get the legacy benefit Working Tax Credit along with the 'severe disability element'. The 'disability element' stopped when I was no longer able to work. My husband gets Carer Credit as he looks after me 20 hours a week. We do not get Housing Benefit or Council Tax benefit. 

My question is what will happen when we eventually get managed migrated over to UC ? What will we lose / what will we gain ?

I need a very simple explanation - if that's possible - as it is all so confusing for us - would there be a transitional payment ? Would I need to give up ESA and apply for UC LCWRA  or is it the same thing ? 

We do not anticipate requesting a housing element.

Thank you for any help you can give.

calcotti

Your new style ESA and PIP will be unchanged. The Tax Credits will stop.

The UC will be made up of a standard couple allowance, extra money because you are in ESA Support Group (known as LCWRA in UC), the carer element (which he will get if he looks after you for at least 35 hours/week). That will give a normal UC maximum amount. Your ESA payments will continue but will be deducted from the UC.

Under managed migration

If the calculated UC amount is more than your current Tax Credits then you will get the UC amount calculated.

If the calculated UC amount is less than your current Tax Credits a transitional element will be added to make the UC up to the same amount as the Tax Credit so that your income is unchanged on the day you switch over. Note however that each time a different part of UC increases, for some reason or due to annual updating, the transitional element will reduce. This means that your maximum UC amount will be frozen until the transitional element has been eroded to nil.

There is a crucial difference between Tax Credits and UC. Capital is ignored for WTC. For UC you are not entitled to UC if you have more than £16,000 (ignoring a house you live in and ignoring any savings in approved pension schemes). If that applies to you, you will will be allowed to claim UC for 12 months after which the normal capital rules will apply and IC would end. 

That may not be as simple as you might have wished but it’s the best I can do.

On UC there will be a deduction of 55% of his earnings above an amount known as a Work Allowance (WA). If you are not getting help with rent the WA is £573/month, if you do get help with rent the WA is £344/month.
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There are some additional points arising from your post. 

You say he gets Carers Credit. I’m not sure why he would need Carer Credits if he is working 16 hours/week. At NMW he should be earning more than £123/week which would mean he cents NI contributions from his work a way.) however there is nothing with claiming them.

You say you do not anticipate asking for a housing element. If you are renting you are entitled to the housing element.

Lola21

Carer Credit is a hangover from when he had gaps in his NI record - it'll stop. Just wanted to make sure any answer did not mention Carers Allowance - which he does not get.

As for the Housing element we don't anticipate claiming it but we may change our minds when the time  comes. 

Thank you for an excellent clear summary.

Which benefit calculator would you recommend ?

poppy123456

Is there any reason why you're not planning on claiming housing element? Benefit calculator here, which i always find reliable https://www.entitledto.co.uk/benefits-calculator/Intro/Home?cid=10327535-b83b-4665-8b20-ba4717f51bb4 or here

Lola21

We are very fortunate- given the current economic climate - to be Social Housing tenants at a vastly reduced rent compared to the private sector - it may be we would not qualify ? Am I right ?

poppy123456

Lola21 said:

We are very fortunate- given the current economic climate - to be Social Housing tenants at a vastly reduced rent compared to the private sector - it may be we would not qualify ? Am I right ?

If there's any entitlement to UC then you'll be entitled to claim for help with the rent, known as housing element. It makes no difference whether you privately rent or rent from social housing.

calcotti

Lola21 said:

As for the Housing element we don't anticipate claiming it but we may change our minds when the time  comes. 

Thank you for an excellent clear summary.

Which benefit calculator would you recommend ?

Still unclear - do you own your home or do you rent it? If you rent then it would be foolish (in my opinion) not to claim the housing element if you are eligible (you could be excluded if renting from a close relative).

Glad you found it clear.

Try 
https://benefits-calculator.turn2us.org.uk/ or

https://www.entitledto.co.uk/

It’s actually worth using both. If you’ve used the data in correctly you should get the same answer (there may be a small difference).

Another additional point of information - on UC you would both get Class 3 credits so your husband will still get those if his work reduces, you will still betting Class 1 credits through ESA.

Lola21

Then we will consider it carefully knowing that it would probably reduce our couple allowance your fellow advisor mentioned above.

Which calculator do you recommend ?

Lola21

Thank you for the calculator recommendations.

Do they take into account the severe disability element of Working Tax Credit that we currently get ?

poppy123456

Lola21 said:

Then we will consider it carefully knowing that it would probably reduce our couple allowance your fellow advisor mentioned above.

I'm not following what you mean here. Housing element will not reduce your couples standard element.

Lola21

OK - newbie remember. Thought our overall maximum allowance would reduce if we were to get housing help too.

Thanks for your advice.

I will now use one of the calculators and let you know the outcome.

calcotti

Lola21 said:

Thank you for the calculator recommendations.

Do they take into account the severe disability element of Working Tax Credit that we currently get ?

The calculator can only show you what your UC entitlement will be if you claim now. It can’t do a managed migration calculation. 

You could do two calculations - one for UC and one for your existing situation.

poppy123456

Lola21 said:

 Thought our overall maximum allowance would reduce if we were to get housing help too.

No, your maximum UC entitlement will increase if you claimed housing element.

Lola21

OK great suggestion - I will try that.

Very glad I joined this forum.

Lola21

Thank you Poppy - you and your fellow advisor have offered excellent advice.

calcotti

With the addition of the carer element and the housing element you may find that UC would pay you more than your existing arrangements. If so you can choose to move to UC by claiming - you don’t have to wait until managed migration. Be aware however that making an application for UC immediately stops Tax Credits and is irreversible.

Just to confirm - you are not affected by the capital limit of £16,000(?).

Lola21

For the Carer element how many hours a week must he do caring or is it based on my PIP ?

poppy123456

Lola21 said:

For the Carer element how many hours a week must he do caring or is it based on my PIP ?

At least 35 hours but remember, he doesn't need to do anything physical for you.

Lola21

He actually does so much - physical mental you name it. 

Have Googled Carer element - is eligibility proven by my PIP daily living award ? As mentioned already he does not currently get Carers Allowance as it would remove the severe disability element of our Working Tax Credit.

poppy123456

Lola21 said:

He actually does so much - physical mental you name it. 

Have Googled Carer element - is eligibility proven by my PIP daily living award ? As mentioned already he does not currently get Carers Allowance as it would remove the severe disability element of our Working Tax Credit.

He would be entitled because of your daily living PIP award. Claiming carers allowance now will not affect the severe disability element of WTC. It affects Severe disability premium in the old legacy benefits such as Income Related ESA/JSA or Income Support.

For him to be entitled to carers allowance now then he would need to earn less than £132/week after deductions. There's no such limit when claiming carers element of UC.

Lola21

We didn't know that - thank you. So as long as my husband continues working his 16 hours to meet the minimum Working Tax Credit rule he can claim Carers Allowance and the severe disability element stays ?