News/Blog

RISE blog: Universal Credit and how to claim it

During the pandemic, restrictions meant many people were unable to work as normal. Measures such as the government's furlough payments scheme and temporary increases to Universal Credit payments were put in place. However, with the easing of restrictions, those measures are now coming to an end.

If you’re worried that your income is too low and you cannot afford things like rent, fuel bills and food, you may still be entitled to Universal Credit payments. The purpose of these payments is to ensure that everyone has enough income to meet their essential expenses.

In this blog we explain how Universal Credit works and where to go if you need help claiming it.

 

How Universal Credit is assessed

If you claim Universal Credit, the government's Department for Work and Pensions (DWP) assesses how much Universal Credit money you are entitled to. They do so by calculating how much Universal Credit income you need to live on, by taking into account things like:

• how many people live in your household;
• whether any of you have health problems or disabilities;
• whether you pay for childcare; and
• whether you pay rent for the place you live in.

The total from this calculation is called your “maximum Universal Credit”.

The DWP then considers whether you already have some income, such as earnings from a salary, or other welfare benefits. If you have earnings from a salary, you are allowed to keep 37% of the net amount (after tax and national insurance), then your Universal Credit is reduced by the remaining 63%. You are also allowed to keep a work allowance if you have one or more dependent child, or if you have health problems that mean you can’t work.

So, as an example, if your maximum Universal Credit is £800 per month, and your take-home salary from work is £500 per month, you would be entitled to a Universal Credit top up of 63% of your take-home salary.

63% of your £500 take-home salary would be £315.

The Universal Credit you are due would be worked out by subtracting this £315 from your maximum Universal Credit amount of £800. This calculation means you would be entitled to £484 in Universal Credit.

Your total income would therefore be your £500 of take-home pay plus the £485 Universal Credit you are entitled to, giving you a total of £985.

How to claim Universal Credit

You can claim Universal Credit online at: https://www.gov.uk/apply-universal-credit

If you need help to apply online, you can call the Universal Credit helpline on: 0800 328 5644.

Advance payments

Because Universal Credit is paid monthly in arrears, you will not receive your first payment until around a month after you claim. If you do not have enough to live on in the meantime, you can ask for an advance payment. However, these advance payments have to be repaid and will be deducted from your monthly Universal Credit payments once they start.

Your immigration status

You cannot get Universal Credit if you have a “no recourse to public funds” (NRPF) condition as part of your immigration status or if you are in the UK as an undocumented migrant. For more information on what NRPF is and how it affects women who are experiencing abuse, see our blog.

If you are European or your partner is European, and you have settled status, you can apply to get Universal Credit. However, you still need to make sure you meet the eligibility criteria.

If you have pre-settled status, you will need to prove that you have a right to live in the UK, either as a worker, or as family member of an EU national. Proving that you have a right to live in the UK can be a complex process but you can get advice from a Citizens’ Advice Bureau if you are not sure.

Declaring other income

If you are paid Universal Credit, you must tell the DWP about any other income you have, so they can correctly assess how much of a Universal Credit top up you are entitled to.

If you have other income that you do not tell them about and the DWP finds out about it, they may find that your Universal Credit has been over-paid. In these circumstances they can make you repay overpayments.

They can also investigate whether you were not truthful about your other income, or if you were simply mistaken about what you needed to tell them about. If they decide you were not truthful or misrepresented your income on purpose, they could start court proceedings against you for fraud.

Managing your claim

Once you make a Universal Credit claim, you will have an online account. This account is a way for you and the DWP to communicate with each other about your claim through messages.

If the DWP assess your claim and decide that you could work and therefore earn more than you currently do, they might expect you to look for more employment. A sanction can be applied to your Universal Credit payments if you do not keep to the work-related requirements for Universal Credit, meaning that your payments are reduced.

Many Universal Credit decisions, including sanction decisions, can be challenged by way of a “mandatory reconsideration”. Organisations such as Citizens’ Advice Bureaux (CAB) can help with these challenges.

Contributory benefits

If you have worked and paid national insurance contributions during the last two tax years, there are two contributory benefits that may apply to you:

Employment and Support Allowance (ESA)

If you can’t work because you have health problems, you may qualify for ESA.

You can claim online by visiting: https://www.gov.uk/employment-support-allowance/how-to-claim

Jobseeker’s Allowance (JSA)

If you are unemployed and looking for work, you may qualify for JSA.

You can claim online by visiting: https://www.gov.uk/jobseekers-allowance/apply-new-style-jsa

How ESA and JSA work with Universal Credit

Both these contributory benefits are treated as income for Universal Credit, which means Universal Credit is reduced by a corresponding amount, as explained in the example above.

As ESA and JSA are not themselves means tested, they can be a useful way of increasing income if, for example, your income and savings are too high for you to be eligible for Universal Credit.

If your income and savings are low enough for you to qualify for a “top up” of Universal Credit, it is important to claim it because it takes into account things like rent payments or the costs of caring for children. These areas of your life are not accounted for by contributory benefits.

Claiming ESA online enables the DWP to check whether you qualify for a top up of Universal Credit at the same time. If you need help with an online claim, you should call the Universal Credit helpline on 0800 328 5644.

If you need help claiming JSA online, you should visit your local Job Centre.

Managing your JSA claim

As with Universal Credit, you may need to meet work-related requirements even if you are assessed as having limited capability for work and therefore awarded ESA. For example, you may need to attend occasional “work focused interviews” to determine what you might do to prepare to return to work.

Most people who receive JSA have full work-related requirements. This means that they have to spend at least thirty-five hours per week looking for work, attend interviews, and keep records of jobs they apply for.

Again, if you are unhappy with an ESA or JSA decision, you can ask your local CAB Citizens Advice Bureau for help to challenge the decision.

These payments exist to ensure everyone can afford their essential expenses, and support is available to help you claim and manage them. For more information about Universal Credit, ESA, JSA or any other benefit, you can contact your local Citizens Advice Bureaux and arrange a free and confidential appointment.