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Hello Reddit Users –
So I was made redundant two months ago. Due to the niche market of my career, I have struggled to secure new work in the same field and have opened myself to anything going.
I’m on Universal Credit and I get £773 a month. After rent, its defined as “existing costs” rather than “living costs”.
Anywho.
An agency offered me some temp work and I ran the maths. I’m seriously hoping someone can correct me on this and help assuage a deep-dive into depression.
So. Universal Credit. For every £1 you earn, your UC payment goes down by 55p.
An agency offered me 2 days work a fortnight from now. Both are 8 hour shifts at £15 per hour.
£240.
As I understand it, NI and Tax are only deducted over a weekly earning of £242.
So, for that potential £240 earnt over two days, £0.55 will be deducted from every pound.
£240 x £0.55 = £132 deduction from my monthly £773 entitlement. That means I’ll receive £641 Universal Credit payment.
This £641.16 deducted UC payment + £240 earnings = £881.16
£881.16 – £773.16 = £108
£108 total profit for working 16 hours over 2 days. That’s £6.75 per hour.
My strengths have never been in maths, but please tell me this can’t be right…?
5 comments
Assuming you don’t have a work allowance (this happens if you have limited capability for work or children) then yep your maths is correct. It’s a broken system.
The system is designed around making people want/need to work more.
The maths is right, but consider this.
Your universal credit contract should state how many hours a week you should be spending looking for work.
If you divide your £773.16 by the number of hours in a month you’re expected to be spending looking for work, I’d expect your hourly rate to be less that £6.75
It’s £108 more than you’d have otherwise and gives you an in with the agency. It’s not a great deal but it’s better than nothing while you’re looking for something more permanent
You need to include your £240 wage. You’ve actually made £21.75 per hour.
You’ve done the maths the long way round, but it’s correct if you’re trying to work out the net rate of pay after the UC adjustment.
If you know that for every £1 you earn you “lose” 55p of it to the UC deduction, you can just take the £15 hourly rate and multiply by 0.45, which is – yep – £6.75. Welcome back to the world of work.