Hello again Universal Credit fans. I'm not sure I'd consider myself a fan after this calculation!

I've attempted another calculation and comparison - this time a working family, with two children.

It looks as if they would gain, but there are a number of key points which would affect this. Firstly, I'm assuming rent fully covered by the rules. Remember, this may not always be the case because of LHA etc. But just for simplicity, I'm assuming the rent element of UC covers the rent in full. Also, I've had to make an assumption that the level of council tax support available to the couple in 2013/2014 will be similar to the previous year 2012/2013. This might not be the case at all, because local council tax support will possibly have different rules. It makes carrying out comparison's awfully complex.

Once again, this is me having a go, based on what I've read and the rates we have available to us. I have this horrible feeling I'm missing something - because the two calcs I've completed so far have shown people to be much better off under UC.

Have a read through - if there are any wonderful welfare geeks that can check these for me I'd be eternally grateful.

Current system

Couple aged 28 and 32.

2 x children aged 4 & 6. Child Benefit £33.70 per week. Husband working 40 hours pw and earning £323.31 net per week (£21,000 per year gross income).  Tax credits = £88.60 pw. Housing Benefit = £118.12 pw Council Tax Benefit =  £14.81 pw

Wages calculated using http://www.uktaxcalculators.co.uk/

Rent £200 per week. Council Tax liability £40 per week.

Tax credits:£545£2690





Max TC’s = £10,585

Income = £21,000

Threshold = £6,420

Difference = £14,580

41% = £5,977.80


Tax credits = £4,607.20 per year (£88.60 per week).



Housing & Council Tax BenefitEligible Rent = £200 pw

Eligible Ctax = £40 pw


Applicable amount


£111.45 for you

£64.99 for child 1

£64.99 for child 2

£17.40 family premium

= £258.83 per week




Earnings = £323.31 - £10 (disregard) - £17.10 (additional earnings disregard) = £296.21 pw

Tax Credits = £88.60 pw

Child Benefit £0 (ignored)

= £296.21 + £88.60 = £384.81


Difference = £384.81 - £258.83 = £125.98


65% = £81.88 (pays this towards rent)

20% = £25.19 (pays this towards council tax)


Housing Benefit = £118.12 pw

Council Tax Benefit = £14.81


Income IN HAND after rent and council tax paid:

Wages = £323.31 pw

Tax Credits £88.60 per week

Child Benefit £33.70 per week

- £81.88 rent to pay

- £25.19 council tax to pay

= £338.54 per week (£1467.00 per month)

New system – Universal Credit calculated MONTHLY – some figures changed below to reflect this – also reflecting 2013/2014 income tax allowances!

I have assumed there will be help with council tax at similar levels to 2012/2013 amounts, but this may not be the case as each individual area will have its own rules. To exclude council tax help would skew the calculation considerably and make it look like there would be much bigger gains under the new system.

Couple aged 28 and 32.

2 x children aged 4 & 6. Child Benefit £33.70 per week. Husband working 40 hours pw and earning £1,424.81net per month (£21,000 per year gross income).  Rent £866.66 per month. Council Tax support is claimed by the couple and they end up having to pay £109.15 per month towards their council tax (similar to 2012/2013 rules). The couple claim Universal Credit.

Universal Credit

Standard Allowance £489.06 per month

Child element £272.08 (1st child) + £226.67 (2nd child) = £498.75 per month

Housing element £866.66 per month

Maximum UC = £1854.47 per month

Click here for rates table https://twitter.com/Income_MAX/status/278412254368657408/photo/1


Earned/Unearned Income

Earnings income = £1,424.81 - £222 (lower work allowance) = £1202.81 x 65% = £781.82 per month

Click here for UC work allowances (disregards)


Child benefit = £0 (CHB not listed within unearned income and is not taxable income)

Actual Universal Credit Total = £1854.47 - £781.82 = £1072.65 per month

BUT – Has to pay £866.66 per month rent direct to landlord

And contribute £109.15 per month council tax (assuming 2012/2013 level of support from Council Tax Support but will depend on local area and rules) – also assuming the customer uses their UC to pay their council tax!

Universal Credit left in hand after rent and council tax is paid £96.84 per month (£22.34 per week)

Income IN HAND under Universal Credit rules after rent and council tax paid

Universal Credit left over once rent and council tax paid = £96.84 per month (£22.34 per week)

Earnings £1424.81 per month (£328.80 per week)

Child Benefit £33.70 per week

Total = £384.84 per week (£1667.64 per month)

Under Universal Credit, this customer is BETTER OFF BY £46.30 per week (£200.64 per month)