By Faye Drage, Autotech Recruit Consultant
A few MOT tester and vehicle technician contract work applicants have recently asked us how working with Autotech Recruit will affect them now they are able to claim Universal Credit instead of certain benefits.
Some of you are probably already aware how the new payment works and how it may affect you, but just in case you want any clarification, below is a brief explanation:
- Universal Credit is a new single monthly payment for people who are on a low income or out of work (replacing Job Seeker's Allowance plus other benefits).
- The new combined payment aims to ensure that people will be better off in work than on benefits. This means claimants won’t lose all their benefits at once if they are on a low income as their Universal Credit payment will reduce gradually as their take home pay increases.
- It ends the 16 hour a week rule that may previously have led people to restrict the hours they work to avoid losing their benefits.
Before, whilst on Job Seeker’s Allowance, the amount of money a contractor could receive whilst in temporary work was determined by the number of hours they worked. With the new Universal Credit, it will no longer be based on the number of hours you work, but the amount of money you make. This means that unlike Jobseeker’s Allowance, their payment won’t stop just because they work more than 16 hours a week. When you start work as a contractor, the amount of Universal Credit you get will just reduce gradually as you earn more.
As a contractor, you can earn a certain amount before your Universal Credit payment is reduced. This is known as a work allowance. Until you earn over your work allowance, you will be able to keep the whole of your Universal Credit payment (meaning if you have a week or so when we have no work to offer you, this will not affect your payment). Once you earn more than your work allowance, your Universal Credit payments will be reduced at a steady rate. Payments will change automatically as earnings change. Your total income will be your earnings plus your new Universal Credit payment.
If you still have any questions regarding this matter, please call Autotech Recruit on 01234 240503 and we’ll try to be as helpful as possible.