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Managed transition to UC and permitted work

alwaysdreaming

Hi
my understanding is that with the ‘managed migration ‘ to UC - people will not be any worse off.

however , what about those who do ‘permitted work’ under ESA ? Will that be protected?

I receive contribution based ESA ( support group) and tax credits - but also so ‘permitted work’ earnings .

I think I I will be financially worse off despite the managed transition. Can anyone comment?

Thank you

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poppy123456

Permitted work rules do not apply to UC. You will have the work allowance. This means you can receive a certain amount of earnings each month before the deductions apply.

If you claim for help with the rent it will be £379/month, if you don’t it will be £631/month. Any earnings above this will reduce your UC by 55%.

When you claim UC as you’re in the Support Group for ESA then you’ll be entitled to the LCWRA element from the start of your claim.

UC with LCWRA pays more than ESA support group, providing your ESA doesn’t include the SDP.

You are correct that once you claim UC if the calculation means you’re worse off then you will receive Transitional protection so you won’t be worse off. Although not everyone is worse off when claiming UC.

Your ESA will continue but be deducted in full from any UC entitlement.

I can’t tell you what the figures will be because it will depend on your circumstances when you claim UC.

alwaysdreaming

thank you so much for your response Poppy123456 - I really appreciate it. However I’m still confused - apologies .

I do not claim for rent ( have a mortgage) , I’m in receipt of a private medical pension £900 per month , only get support element of esa 200 per month ( because I have income ) and receive tax credits. However when my health allows I do ‘permitted work’ - these earnings are not counted in calculation for tax credits - but I think will be for UC and therefore I will be worse off? If that makes sense?

poppy123456

You're welcome. As you don't claim for help with the rent then your work allowance will be £631/month. This means you can earn receive that amount of earnings each month before any deductions apply.

Your pension is what's going to cause an issue with UC because it's classed as unearned income, which will reduce your UC £1 for £1. This is why your ESA Support Group is reduced because your pension is more than £85/week. Therefore for every £1/week over that amount your ESA is reduced by 50p/week.

I don't know what will happen with the pension once you claim UC and whether the Transitional protection amount will cover that. This is not a situation i've come across before. I'm assuming that HMRC know about that pension income?

alwaysdreaming

yes they do know about that income . Technically because of that income I receive £0 esa - but get the support element of £50 per week .

It’s all very confusing to me .

poppy123456

alwaysdreaming said:

Technically because of that income I receive £0 esa -

That's not correct, as you said yourself receive some ESA but at a reduced rate because your pension is more than £85/week. As i advised above, your ESA is reduced by 50p/week for every £1 over that £85.

My calculations suggest that your pension is more than £900/month. Or your ESA amount is incorrect.

To work out the weekly rate of your pension for ESA purposes then you times the £900 by 12 and then divide it by 52. This gives a weekly amount of £207.****. Minus the £85 disregard, which gives a weekly amount of £122.****. 50% of that amount is £61.34, which will be deducted from your ESA.

ESA contributions based Support Group amount is £129.50 - £61.34 for pension deductions. Total ESA should be £68.12/week. Just to comfirm, my figures are based on a pension amount of £900/month.

My thoughts on the pension amount for managed migration to UC. TP should cover the deduction for the pension but it will depend on the final figures. I'd advise you to get some expert advice from an agency near you so that you're prepared when you do finally migrate. This way if UC do get the TP wrong then you can challenge that decision. Start here for the advice. https://advicelocal.uk/welfare-benefits

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