An extra 32 hours for £50? Really?Universal Credit is an attempt to replace a number of benefits with one single benefit - simplifying the system so saving time and money.
As with all big state IT projects, the implementation is a shambles
But if it pays of in the long run, that will be forgotten, I just saw the figures in that story and thought I'd do a little analysis...
Which looks to me to say:-
The unemployed 20 year old gets £500 a month.
If he works 48 hours a month (12/week) at minimum wage (£6.25 an hour) he earns £300 a month (more than his rent!).
But with UC he will have a total of £700 a month so his 48hrs work have made him £200 better off - thats an extra £4.17 for each hour worked.
If he works 80 hours a month (20/week) at minimum wage he earns £500 a month (almost double his rent!).
But with UC he will have a total of £750 a month so his *extra* 32 hours have rewarded him an extra £50 a month... or a measly £1.56 an hour(!).
|Hours||Payslip Rate||Payslip Total||UC||Monthly Total||Reward Per Hour Worked||Reward per Extra Hour Worked|
An extra 32 hours for £50? Really?
How about this instead?
With a real 'citizens income' the figures would look something like this:-
|Hours||Payslip Rate||Total||Tax (30%)||Take home||CI||Monthly Total||Reward Per Hour Worked||Reward per Extra Hour Worked|
So a fixed citizens income and a flat rate tax means workers keep 70% of every single £ they earn.
To simplify even further why not just tax the employer the 30% of their total wage bill - make the wage £3.67 and not tax the employees at all? I'd like to see people try to dodge their taxes with that in place!!
First Published at http://free-english-people.blogspot.co.uk/2013/09/observations-on-universal-credit-and.html