Having read your recent comments about Tax Credits I worked out that with my earnings I could expect to lose Tax Credits of about £30 a week from next April.
Now that these cuts have been scrapped, where does that leave me and those like me?
The cuts announced by George Osborne in July will not now be felt next year in Tax Credits, but over future years by reductions in Universal Credit.
Universal Credit is a new benefit that will eventually replace and combine six existing benefits, including Tax Credits, into one monthly payment.
It is in the early stages of its introduction and it is not yet clear when it will be fully operational.
The intended cuts proposed in July not only applied to Tax Credits, but to the parts of the Universal Credit rules that affect working people.
While the Chancellor decided not to go through with the Tax Credit cuts, these changes to Universal Credit have passed into law virtually unnoticed.
So the dates when the cuts start to affect people will depend upon when Universal Credit for working people is introduced. And no-one seems to know when that will be.
When Universal Credit is eventually up and running there will be two groups of people receiving it.
One group will be those who have made new claims after Universal Credit has been introduced.
The other will be those who have been transferred to it from their old benefits, like Working Tax Credit.
These groups will be affected differently. The new claimants will be assessed under the less generous Universal Credit rules that have recently been put on the statute book.
They will get less than if they had claimed Working Tax Credit under the old system. The group who have ‘transferred’ however will be ‘protected’.
This means they must receive at least as much in Universal Credit as they did from the benefits they were previously receiving.
So they will be given an extra amount to make up the difference but their Universal Credit will be ‘frozen’.
They will not get an increase until changes in their circumstances use up this entire extra amount.
So if they have, for example, a drop in earnings or the birth of a child, which would normally lead to a benefit increase, their Universal Credit could stay the same.
If your husband owns property, can you get Personal Independence Payment (PIP) or Employment and Support Allowance (ESA)?
PIP is not affected by the person’s capital, or that of a partner. If your ESA is based upon your National Insurance Contributions, this is not affected either, but you will not get ESA based on income.