Coronavirus: Universal Credit

 

An article in the Times on 30 March provided a reminder that individuals whose livelihood has been impacted because of the coronavirus, such as employees who have been made redundant and self-employed individuals whose turnover has stopped, will be expected to use their savings before they are eligible for Universal Credit.

This is because to be eligible for Universal Credit, the individual needs to be:

and

Savings (capital) is something that could be a source of income. This includes:

When an individual claims Universal Credit they will need to declare all of their capital. If their capital is worth more than £16,000, they will not be entitled to claim Universal Credit. If they are in a couple but have to make a claim as a single person, their partner’s capital/savings will still be taken into account.

Here’s how the amount of capital an individual has will affect their Universal Credit claim:

Other money coming into a household can also affect the amount of Universal Credit an individual can receive. This includes:

And if other benefits are received at the same time, for every £1 the individual receives from them, their Universal Credit payment will be reduced by £1. These include:

However, there are some other benefits that aren’t taken into account. These include:

From 6 April the Government is increasing the standard allowance in Universal Credit for one year by £20 per week on top of planned annual uprating. This will apply to all new and existing Universal Credit claimants, and means that for a single Universal Credit claimant (aged 25 or over), the standard allowance will increase from £317.82 to £409.89 per month.

It may still be possible to receive Universal Credit payments when an individual starts work or increases their earnings. Their Universal Credit payments will adjust automatically if their earnings change, meaning they have the flexibility to take on part-time or short-term work.

As their earnings increase, their Universal Credit amount will go down, depending on their circumstances. For more information see Universal Credit and work.

If they are part of a couple and have a joint award, then both their earnings will be used to calculate their Universal Credit payment.

For those that are self-employed and claiming Universal Credit, and are required to stay at home or are ill as a result of coronavirus, the Minimum Income Floor (see below) will not be applied for the period of time whilst they are affected.

The minimum income floor is usually what someone of the same age would earn if they worked at the National Minimum Wage for the number of hours that the self-employed individual is expected to work or look for work. Normally, if the self-employed individual earns less than the minimum income floor, Universal Credit will not make up the difference.

From 6 April the requirements of the Minimum Income Floor will be temporarily relaxed. This change will apply to all Universal Credit claimants and will last for the duration of the outbreak. New claimants will not need to attend the jobcentre to demonstrate gainful self-employment.

More information is available here.