Housing Systems: Combating poverty and sustaining tenancies.

Coronavirus and Benefits: FAQs
I’m going to get the Self Employed Income Support Grant – will I end up with a UC overpayment?


If a self-employed worker has not yet made a claim for Universal Credit, and is due a payment from the SEISS then they could be better off waiting until after they have received the payment.
More on the SEISS here.

I made a claim for Universal Credit a few weeks ago - won't I just end up being overpaid when I receive the grant payment? And have to pay all my UC back?

No, this shouldn’t happen.

The way Universal Credit works is that it’s assessed and paid monthly. When you claim, that starts your first ‘Monthly Assessment Period’ and you’re paid about a week after the period ends.

For example: Bert claims UC on 15th August. His Monthly Assessment Periods will run from 15th to 14th of every month and he’ll be paid UC on 21st of each month (earlier if it’s a non-banking day).

At the end of each Assessment Period the DWP will work out, according to his income and circumstances, how much UC he’ll be paid. Bert will have to report his income and allowable expenses that he's had in each Assessment Period and the DWP will use those figures when working out his entitlement.

So when he's paid his SEISS grant, Bert will have to report that as income for the Assessment Period in which it is paid. So for Bert, whose Monthly Assessment Periods run from 15th to 14th of each month, if he gets paid his SEISS grant on say 23rd December, then that will affect the UC payment due to him on 21st January.

It might mean he gets no UC for that Monthly Assessment Period, but there won’t be an overpayment for the previous periods.

What if I get no self-employed earnings while I’m waiting for the grant? Or make a loss?

If you get no earnings, your Universal Credit is worked out on the basis that you have been paid nothing for that period.

If you’ve been reporting a loss every month up until you get the grant, then this loss can be offset against the grant and only the difference will be treated as earnings. 

How much of the earnings / grant is taken into account?

Earnings (including self employed income and the SEISS grant) aren’t taken into account in full. Everyone has only 63p in the £1 of their earnings taken into account, and some people - those with children or who have (or their partner has) been found to be unfit for work – also have part of their earnings disregarded (this is called a ‘work allowance’ - which can either be £293 or £515 a month). The work allowance is disregarded first then the 63p in the £ taper applied.
Marie has a child and so is entitled to a work allowance of £293. She earns £793 net and so this leaves £500 of which 63p in the £ counts as earnings - ie £315.

Will my Universal Credit stop?

Because Universal Credit adjusts each month according to your circumstances and income, then if you get a large payment it could well mean you’re not entitled to any UC in the Assessment Period that the grant comes in.

This means that if you want to carry on getting UC (assuming your income will be low enough afterwards) then you’ll have to reclaim Universal Credit after it’s ended. You’ll be put back on the same Monthly Assessment periods as before.

You may find that the ‘surplus earnings’ rules kick in. This is where part of the higher earnings you got in that period are carried over to the following Assessment Periods.

Already getting Housing Benefit and/or Tax Credits?

WARNING: If you’re already getting Tax Credits and/or Housing Benefit then you need to get a better off assessment done before making a claim for Universal Credit. This is because when you claim UC your Tax Credits / Housing Benefit will end and you’ll not be able to get back on them again. Check with a benefits adviser.