Night out allowance and universal credit

Hi, my wife lost her job a few weeks ago and we have had to put a claim in for universal credit to keeps us and the kids afloat. I am wondering if universal credit take into account night out allowance. My company pay this separately to our wage and it doesnt appear on my wage slip. I don’t want to get in any trouble with the benefits system but not sure what the crack is with it?

Toms2820:
Hi, my wife lost her job a few weeks ago and we have had to put a claim in for universal credit to keeps us and the kids afloat. I am wondering if universal credit take into account night out allowance. My company pay this separately to our wage and it doesnt appear on my wage slip. I don’t want to get in any trouble with the benefits system but not sure what the crack is with it?

I don’t think that UC will take into account payment of expenses incurred as part of the job.
But in all cases tell them about your earnings, including expenses, in your application and written journal and by phone.
I actually did similar in the case of reimbursement of a fuel payment when I did a job on agency.I told them about my wage for the day and the fuel payment paid seperately.They didn’t take the fuel payment into account for my 40% deduction.

In my opinion. (For what it’s worth) they are expenses and not to counter as income .

This is what my thinking was, I cant find a straight answer online though

It’s cash… don’t tell them. How they going to find out, Waits for the Hang-em high do-gooders to arrive.

It’s not earnings so I wouldn’t tell them.

Sent from my SM-G960F using Tapatalk

Universal Credit get their info of your income from HMRC. If you are paid night out money and doesn’t involve HMRC, UC wont know.

Unfortunately that also means if you are given a tax refund by HMRC, UC count it as income and you get a deduction in what you qualify for due to that.

If you go the Universal Credit route, look up their “Help to Save” scheme. It is generally kept quiet but if you can find the money each month, you get a nice bonus after each 2 year period. Martin Lewis done a segment on this a while back. You have to be on UC to start the account but if you finish UC for example a couple of months on, you can keep the Help to Save account running long after you finished UC and still receive the bonus

gov.uk/get-help-savings-low-income

UC get your takehome pay from HMRC verified by your employer(s). Night Out money - will be included towards any 63p/£ deductions once you go beyond your personal earnings threshold calculated on your household status.

This means that taxes, NICs, and pension contribution deductions - have the effect of pushing the UC up a bit, whilst “extras” on the top line such as overtime or night out money will push the bottom line up a bit, and thereby reduce the UC entitlement.

The largest aspect of UC “earnings allowance” - is for the child element, which boost the amount you can earn before the savage claw back of UC. It’s over £200 per child, which means if you have three kids and a wife now out of work - you’re likely to actually do better than the 80% pay involved on furlough, had you got that instead. Each extra child is worth more than half of the entire couples allowance, meaning that kids count for more than the adults do in the claim.

You mentioned kidS in the plural in original post, so I reckon you’re looking at the first grand a month of takehome earnings being left alone, and the basic allowance per month for the whole family being around the £800pm mark less 63p in the pound for anything above and beyond the allowances set by applying as a couple and applying with x kids factored in.

“Couple” rather than single on the application then,
Kids rather than no kids,
Paying tax, pension, and any other deductions on your wage
ALL have the effect of widening the arbitrage channel where you’re actually best off doing a certain number of hours - upto the point where the 63p/£ clawback kicks in.

Tax credits used to work in a similar manner, but the threshold was so low, that if you did more than 30 hours per week @ minimum wages - you ended up getting clawed back straight away.

Thus, UC would seem to be better than Tax Credits, which makes sense - bearing in mind that UC is supposed to be replacing tax credits.

The new system is “job above minimum wage friendly” one might say.

If I were to be so bold as to assume you have 2 kids, then the calculation should be as follows:

Basic Allowance:

1 x £594.04 for you and your missus as a couple applying.
1 x £277.08 for your first child
1 x £235.83 for your second child
TOTAL - £1106.95 per month payment of UC
LESS the following:

63p in the pound reduced for all your earnings above £512 per month if you don’t put in a claim for Rent, Mortgage Interest, or Council Tax grant.

So, if you earned £1512 takehome pay next month for example, you’d have 63p in the pound taken off the excess above £512, which means £630 would be taken off your starting £1106.95 monthly payment, leaving you and your missus with a £476.95 payment for that previous month paid in arrears, which is essentially a payment aimed at your missus - because she no longer has a job, and yourself - because you’re no longer earning over £2000 a month yourself any more.

Each month - your earnings for that month gets taken automatically from your employer and HMRC to calculate what your new rate is left over for you and the wife.
Since £1512 per month is well above the threshold for starting to pay income tax and National Insurance, you need to be careful before considering doing overtime:

If you earned an extra £100 takehome in overtime in any month for instance, you’d be paying over £12 of it in National Insurance, and over £20 in tax, and you’d have £63 taken off your next month’s UC payment.

That means you’d lose 95% of any extra earnings you get - once you go beyond the threshold, which has that bar set rather low @ the first £512 per month, don’t forget.

The same applies if your wife gets another job, since the £512 earnings allowance - is for you BOTH.

I beleive the reason that UC is considered “unpopular” and “Another Tory Hate Crime against the masses” to date - is simply because you’re now better off taking a lower paid job than you are either cramming the hours, or sitting at home doing bugger-all on what used to be called “Unemployment Benefit”. If anything, one might call this “New” Universal Credit thing “UNDERemployment benefit”, I reckon!

Imagine these workshy types who were getting a payment for never having to work at all, now being told that if you don’t take a low-paid job - your benefits will now be reduced after a while…

“Less is More” now.

There is a real opportunity here to take a look at your family’s work-life balance at this point - eh?

There’s other stuff that you can claim for, like free school dinners, child care etc. - but that isn’t money in your pocket as such.

The “work allowance threshold” is much LOWER if you put in any claim for Rent, Council Tax Benefit, etc.

I think the idea of this credit is to smooth-out any drop in income that has happened to your household as a whole.
If you and the wife were both unemployed outright, you’d only be getting the income of £1106.95 in this example, with no deductions.

Not very good compared to £1512 takehome earnings PLUS £476.95 UC on top - is it?

FFS you’re back up to just shy of £2k per month takehome earnings again, but at the cost of your wife’s job…

The pressure is thus off you because you already have a job. There’s no need to put in “overtime” as far as I understand it.
Your missus meanwhile - can hold out for a better-paid job, so no need for her to go cleaning, or work in a call center, or something else soul-destroying, as you’ve put in a joint claim, which is based more around your low income, rather than her currently zero income. If you’d applied seperately, you wouldn’t have got much UC at all, and your wife would only get it on the understanding that she takes the first job that comes along… :bulb:

Winseer:
UC get your takehome pay from HMRC verified by your employer(s). Night Out money - will be included towards any 63p/£ deductions once you go beyond your personal earnings threshold calculated on your household status.

Why do you continue to post nothing but absolute unadulterated ■■■■■■■■? How does one manage to be so wrong about so many things? UC is based on net income, not gross income. Deductible expenses under Chapter 2, Part 5 of ITEPA 2003 are disregarded in calculating employed earnings - UC Regs, reg 55(3)(a). This ensures any allowable expenses reimbursed by an employer are not taken into account as income. Night out money which is within the tax free allowance set by HMRC comes under that and is not regarded as income. It is a reimbursement for expenses therefore it is disregarded as income for benefits purposes, whether that be tax credits, universal credit, housing allowance, council tax credit whatever. Also if you pay money into a pension 100% of any money paid into a pension is disregarded as income for universal credit too. So if you earned £30,000 a year and put the whole £30,000 into a pension then as far as universal credit is concerned your income is £0.

Here you go…UK Statutory Instrument 2013 No 376 The Universal Credit Regulations 2013

legislation.gov.uk/uksi/2013 … on/55/made

Employed earnings

(2) Employed earnings comprise any amounts that are general earnings, as defined in section 7(3) of ITEPA, but excluding—

(a)amounts that are treated as earnings under Chapters 2 to 11 of Part 3 of ITEPA (the benefits code); and

(b)amounts that are exempt from income tax under Part 4 of ITEPA.

(3) In the calculation of employed earnings the following are to be disregarded—

(a)expenses that are allowed to be deducted under Chapter 2 of Part 5 of ITEPA; and

And to prove my point about pension contributions and it being based on net pay, not gross pay…

(5) In calculating the amount of a person’s employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—

(a)any relievable pension contributions made by the person in that period;

(b)any amounts paid by the person in that period in respect of the employment by way of income tax or primary Class 1 contributions under section 6(1) of the Contributions and Benefits Act; and

(c)any sums withheld as donations to an approved scheme under Part 12 of ITEPA (payroll giving) by a person required to make deductions or repayments of income tax under the PAYE Regulations.

Conor:

Winseer:
UC get your takehome pay from HMRC verified by your employer(s). Night Out money - will be included towards any 63p/£ deductions once you go beyond your personal earnings threshold calculated on your household status.

Why do you continue to post nothing but absolute unadulterated ■■■■■■■■? How does one manage to be so wrong about so many things? UC is based on net income, not gross income. Deductible expenses under Chapter 2, Part 5 of ITEPA 2003 are disregarded in calculating employed earnings - UC Regs, reg 55(3)(a). This ensures any allowable expenses reimbursed by an employer are not taken into account as income. Night out money which is within the tax free allowance set by HMRC comes under that and is not regarded as income. It is a reimbursement for expenses therefore it is disregarded as income for benefits purposes, whether that be tax credits, universal credit, housing allowance, council tax credit whatever. Also if you pay money into a pension 100% of any money paid into a pension is disregarded as income for universal credit too. So if you earned £30,000 a year and put the whole £30,000 into a pension then as far as universal credit is concerned your income is £0.

Here you go…UK Statutory Instrument 2013 No 376 The Universal Credit Regulations 2013

legislation.gov.uk/uksi/2013 … on/55/made

Employed earnings

(2) Employed earnings comprise any amounts that are general earnings, as defined in section 7(3) of ITEPA, but excluding—

(a)amounts that are treated as earnings under Chapters 2 to 11 of Part 3 of ITEPA (the benefits code); and

(b)amounts that are exempt from income tax under Part 4 of ITEPA.

(3) In the calculation of employed earnings the following are to be disregarded—

(a)expenses that are allowed to be deducted under Chapter 2 of Part 5 of ITEPA; and

And to prove my point about pension contributions and it being based on net pay, not gross pay…

(5) In calculating the amount of a person’s employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—

(a)any relievable pension contributions made by the person in that period;

(b)any amounts paid by the person in that period in respect of the employment by way of income tax or primary Class 1 contributions under section 6(1) of the Contributions and Benefits Act; and

(c)any sums withheld as donations to an approved scheme under Part 12 of ITEPA (payroll giving) by a person required to make deductions or repayments of income tax under the PAYE Regulations.

Thanks for that, the night out money does go into my bank account but separately to my wage, but I take it this is fine as long as its expenses?

Winseer:
UC get your takehome pay from HMRC verified by your employer(s). Night Out money - will be included towards any 63p/£ deductions once you go beyond your personal earnings threshold calculated on your household status.

This means that taxes, NICs, and pension contribution deductions - have the effect of pushing the UC up a bit, whilst “extras” on the top line such as overtime or night out money will push the bottom line up a bit, and thereby reduce the UC entitlement.

The largest aspect of UC “earnings allowance” - is for the child element, which boost the amount you can earn before the savage claw back of UC. It’s over £200 per child, which means if you have three kids and a wife now out of work - you’re likely to actually do better than the 80% pay involved on furlough, had you got that instead. Each extra child is worth more than half of the entire couples allowance, meaning that kids count for more than the adults do in the claim.

You mentioned kidS in the plural in original post, so I reckon you’re looking at the first grand a month of takehome earnings being left alone, and the basic allowance per month for the whole family being around the £800pm mark less 63p in the pound for anything above and beyond the allowances set by applying as a couple and applying with x kids factored in.

“Couple” rather than single on the application then,
Kids rather than no kids,
Paying tax, pension, and any other deductions on your wage
ALL have the effect of widening the arbitrage channel where you’re actually best off doing a certain number of hours - upto the point where the 63p/£ clawback kicks in.

Tax credits used to work in a similar manner, but the threshold was so low, that if you did more than 30 hours per week @ minimum wages - you ended up getting clawed back straight away.

Thus, UC would seem to be better than Tax Credits, which makes sense - bearing in mind that UC is supposed to be replacing tax credits.

The new system is “job above minimum wage friendly” one might say.

If I were to be so bold as to assume you have 2 kids, then the calculation should be as follows:

Basic Allowance:

1 x £594.04 for you and your missus as a couple applying.
1 x £277.08 for your first child
1 x £235.83 for your second child
TOTAL - £1106.95 per month payment of UC
LESS the following:

63p in the pound reduced for all your earnings above £512 per month if you don’t put in a claim for Rent, Mortgage Interest, or Council Tax grant.

So, if you earned £1512 takehome pay next month for example, you’d have 63p in the pound taken off the excess above £512, which means £630 would be taken off your starting £1106.95 monthly payment, leaving you and your missus with a £476.95 payment for that previous month paid in arrears, which is essentially a payment aimed at your missus - because she no longer has a job, and yourself - because you’re no longer earning over £2000 a month yourself any more.

Each month - your earnings for that month gets taken automatically from your employer and HMRC to calculate what your new rate is left over for you and the wife.
Since £1512 per month is well above the threshold for starting to pay income tax and National Insurance, you need to be careful before considering doing overtime:

If you earned an extra £100 takehome in overtime in any month for instance, you’d be paying over £12 of it in National Insurance, and over £20 in tax, and you’d have £63 taken off your next month’s UC payment.

That means you’d lose 95% of any extra earnings you get - once you go beyond the threshold, which has that bar set rather low @ the first £512 per month, don’t forget.

The same applies if your wife gets another job, since the £512 earnings allowance - is for you BOTH.

I beleive the reason that UC is considered “unpopular” and “Another Tory Hate Crime against the masses” to date - is simply because you’re now better off taking a lower paid job than you are either cramming the hours, or sitting at home doing bugger-all on what used to be called “Unemployment Benefit”. If anything, one might call this “New” Universal Credit thing “UNDERemployment benefit”, I reckon!

Imagine these workshy types who were getting a payment for never having to work at all, now being told that if you don’t take a low-paid job - your benefits will now be reduced after a while…

“Less is More” now.

There is a real opportunity here to take a look at your family’s work-life balance at this point - eh?

There’s other stuff that you can claim for, like free school dinners, child care etc. - but that isn’t money in your pocket as such.

The “work allowance threshold” is much LOWER if you put in any claim for Rent, Council Tax Benefit, etc.

I think the idea of this credit is to smooth-out any drop in income that has happened to your household as a whole.
If you and the wife were both unemployed outright, you’d only be getting the income of £1106.95 in this example, with no deductions.

Not very good compared to £1512 takehome earnings PLUS £476.95 UC on top - is it?

FFS you’re back up to just shy of £2k per month takehome earnings again, but at the cost of your wife’s job…

The pressure is thus off you because you already have a job. There’s no need to put in “overtime” as far as I understand it.
Your missus meanwhile - can hold out for a better-paid job, so no need for her to go cleaning, or work in a call center, or something else soul-destroying, as you’ve put in a joint claim, which is based more around your low income, rather than her currently zero income. If you’d applied seperately, you wouldn’t have got much UC at all, and your wife would only get it on the understanding that she takes the first job that comes along… :bulb:

I have done the benefit calculator and like you say its seems we will do ok with universal credit for a while whilst the wife finds something else, she won’t rush in the current climate. We also get full rent paid apparently so I cant complain

Conor:

Winseer:
UC get your takehome pay from HMRC verified by your employer(s). Night Out money - will be included towards any 63p/£ deductions once you go beyond your personal earnings threshold calculated on your household status.

Why do you continue to post nothing but absolute unadulterated ■■■■■■■■? How does one manage to be so wrong about so many things? UC is based on net income, not gross income. Deductible expenses under Chapter 2, Part 5 of ITEPA 2003 are disregarded in calculating employed earnings - UC Regs, reg 55(3)(a). This ensures any allowable expenses reimbursed by an employer are not taken into account as income. Night out money which is within the tax free allowance set by HMRC comes under that and is not regarded as income. It is a reimbursement for expenses therefore it is disregarded as income for benefits purposes, whether that be tax credits, universal credit, housing allowance, council tax credit whatever. Also if you pay money into a pension 100% of any money paid into a pension is disregarded as income for universal credit too. So if you earned £30,000 a year and put the whole £30,000 into a pension then as far as universal credit is concerned your income is £0.

Here you go…UK Statutory Instrument 2013 No 376 The Universal Credit Regulations 2013

legislation.gov.uk/uksi/2013 … on/55/made

Employed earnings

(2) Employed earnings comprise any amounts that are general earnings, as defined in section 7(3) of ITEPA, but excluding—

(a)amounts that are treated as earnings under Chapters 2 to 11 of Part 3 of ITEPA (the benefits code); and

(b)amounts that are exempt from income tax under Part 4 of ITEPA.

(3) In the calculation of employed earnings the following are to be disregarded—

(a)expenses that are allowed to be deducted under Chapter 2 of Part 5 of ITEPA; and

And to prove my point about pension contributions and it being based on net pay, not gross pay…

(5) In calculating the amount of a person’s employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—

(a)any relievable pension contributions made by the person in that period;

(b)any amounts paid by the person in that period in respect of the employment by way of income tax or primary Class 1 contributions under section 6(1) of the Contributions and Benefits Act; and

(c)any sums withheld as donations to an approved scheme under Part 12 of ITEPA (payroll giving) by a person required to make deductions or repayments of income tax under the PAYE Regulations.

Not you again, criticizing when I’m trying to help someone out here with a serious adult question…

If YOU know better, rather than report third-party stuff that isn’t relevant to this discussion - then give YOUR exmaple where YOU were deducted differently to the manner in which I have laid out here very specifically.

The Bottom Line Earnings figure (aka “Takehome Pay”) no matter HOW it is made up - is the figure used to calculate the 63% taper-off.
My example above is accurate to the penny. Any “deductions” that reduce the takehome pay therefore - mean LESS taken off and therefore MORE of the original UC claimed amount kept.

This is why people with money problems go to “Citizens Advice” rather than “A Bank Manager” or “A Lawyer” btw.

The Bank manager - wants to mislead you into paying more interest, whilst the Lawyer wants you to pursue cases that are easy to win (on a contingency basis) OR only take on lost causes - for a fat fee, which puts social justice out of reach of ordinary people - period.

Now stop talking like a bloodsucking lawyer man, and put some “alternative examples” forward… It isn’t an unreasonable request here.

FFS How can you try or even want to out-left me here, on THIS a financial matter? :frowning:

OP wants to know if “Night Out Money” matters when claiming UC…

If it is on the payslip - it will add to takehome pay, and it will thereby reduce UC by 63p in the pound.
If it is paid cash OFF the payslip - it won’t be noticed by HMRC at all, because that payment presumably didn’t go through the books, and therefore will NOT be tapered off.

The UC system has long since known to be full of holes, most of them left by Osbourne and any Statutory Instruments or versions of UC moved whilst he was chancellor.
Your “Legal information” is therefore as “out of date” as any notion that “UC is a Tory benefit and to be resisted”. No more - not with 365 Tory MPs!

If you’d read further down my post, I detailed the way that HMRC pass over the NET payment to DWP for the calculation of the taper.
The NET payment is pushed up by any “additions” on a payslip, including Night Out Money, especially if it is tax-free.
Thus, an increase in NET pay - is what affects the 63p/£ taper UPwards, and the total amount to come - DOWNwards.
If you are paid say, £100 on the other hand, you will pay say, £12 Nics, £20 Tax leaving the 63p taper to be on the £62 that remains and NOT the starting £100 gross payment.
…But a deduction will be made, nonetheless - £39.06 will be taken OFF any UC claim for earning an extra £62 takehome pay in this example, regardless of it starting as £100 gross, or some other amount.
It is the takehome figure that counts.
You really need to read more of my posts, rather than gloss over it because you’re lazy like an acting manager, dislike me like an acting manager, and have no regard for the well-being of OP by making him now doubt any validity of my own posts - which were trying to do him a favour, not invite you to backbite me as if by an acting manager every time I pipe up with some serious advice, especially for this - a new poster and all. :frowning:

Toms2820:
Thanks for that, the night out money does go into my bank account but separately to my wage, but I take it this is fine as long as its expenses?
I have done the benefit calculator and like you say its seems we will do ok with universal credit for a while whilst the wife finds something else, she won’t rush in the current climate. We also get full rent paid apparently so I cant complain

Because you’re claiming the rent aspect as well, the taper-off kicks in sooner than it would if you didn’t claim for rent.

Thus, the eventual amount you get will be less - BUT you will still get an amount, despite the fact that you are still pulling in a wage, and your wife isn’t likely to be able to get a job for some weeks or months to come yet. If you have more than 2 kids, the starting figure is higher of course, so you might end up with even more than the example I detailed above, despite the sharper taper.

A joint claim - puts pressure on ONE of you to be back at work already - not both of you.
This clearly encourages families to stay together, rather than “split up” so one can claim seperately, as was the optimum manner in which to maximize benefits under the old system, where Women would avoid taking a job and avoid taking a new partner into her life - lest she get kicked off the benefits that she had since become acustomed to - the road to benefit dependency, if ever there was one.

To “Keep it all honest” - I would strongly suggest avoiding the temptation of taking on any “Cash-in-hand” work for either you or your wife.

As such, I applaud the changes that this current government has made to UC. It no longer seems to be the broken system it was under the previous two Conservative governments.

Winseer:

Toms2820:
Thanks for that, the night out money does go into my bank account but separately to my wage, but I take it this is fine as long as its expenses?
I have done the benefit calculator and like you say its seems we will do ok with universal credit for a while whilst the wife finds something else, she won’t rush in the current climate. We also get full rent paid apparently so I cant complain

y

Thanks again, I will let them know if I do any nights out then just to be on the safe side. Night outs dont show on my wage slip but do show in my bank so dont want to get in trouble at a future point if they ask to see bank statements for example! Better to be honest I suppose or it will bite me on the arse later on I’m sure.
Thanks

Because you’re claiming the rent aspect as well, the taper-off kicks in sooner than it would if you didn’t claim for rent.

Thus, the eventual amount you get will be less - BUT you will still get an amount, despite the fact that you are still pulling in a wage, and your wife isn’t likely to be able to get a job for some weeks or months to come yet. If you have more than 2 kids, the starting figure is higher of course, so you might end up with even more than the example I detailed above, despite the sharper taper.

A joint claim - puts pressure on ONE of you to be back at work already - not both of you.
This clearly encourages families to stay together, rather than “split up” so one can claim seperately, as was the optimum manner in which to maximize benefits under the old system, where Women would avoid taking a job and avoid taking a new partner into her life - lest she get kicked off the benefits that she had since become acustomed to - the road to benefit dependency, if ever there was one.

To “Keep it all honest” - I would strongly suggest avoiding the temptation of taking on any “Cash-in-hand” work for either you or your wife.

As such, I applaud the changes that this current government has made to UC. It no longer seems to be the broken system it was under the previous two Conservative governments.