Universal credit and divorce


An article in the Solicitors Journal on 23rd June, www.solicitorsjournal.com is well worth reading

Universal Credit.

How does UC work?

Under UC, there is no cap to the number of hours someone can work. The amount received, however will, go down as earnings increase. Also there is a cap was introduced to ensure that the amount received by way of benefits for those of working age did not exceed the average wage for working families.

Some capital assets will also be taken into account, such as second homes and savings. The threshold is additional capital of £16,000, and care must be taken not to exceed that, possibly with interest earned on an investment which started out under that limit.

If you receive income-based job seeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit, and housing benefit, instead will receive a single monthly payment under the new regime.

Divorce

Income derived from spousal maintenance and pension receipts, will be taken into account on a pound-for-pound basis when calculating the amount of UC to be paid. This is in comparison to the existing tax credits regime which does not take spousal maintenance into account as ‘income’. The consequence of the new system is, therefore, that the receipt of spousal maintenance could severely affect the amount of global UC to be received.

Child maintenance will not be regarded in the same way.

Calculations of spousal maintenance may need to be adjusted to take into account any fall in credits or benefits to be received under the new regime.

It may be that the effect of spousal maintenance payments on UC receipts can be mitigated by increased child maintenance payments.

Further, the receipt of capital under a financial settlement may result in wiping out the entitlement to UC in its entirety where the capital exceeds £16,000, although this does not include your main home.

Experience shows that the most efficient and experienced fixed fee solicitors and lawyers are in London, despite extra overheads.

The Principal Registry in London is more suitable, especially for wives, for complex or middle and upper-class divorces. The judges are far use to what other County Court might consider to be ‘high’ awards of capital and maintenance.

London judges in particular are very experienced and sophisticated when it comes to investigating assets, especially overseas companies and trusts, and anecdotally especially for wives.

London has been called the wife’s divorce capital of the world.

Hylton- Potts can help with problems like this. We operate from London offices but help clients all over the country at highly competitive fixed fees.

There is a office hours free confidential hotline 020 7381 8111 and a 24-hour free confidential email legal help service [email protected]

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