Housing Systems: Combating poverty and sustaining tenancies.

Coronavirus: Universal Credit - Lost Job
Universal Credit - Lost Job
Already getting Universal Credit?

Someone who is currently in receipt of Universal Credit, and who has been laid off, will have that drop in income taken into account when their UC is next assessed.

They should let their Work Coach know what is going on as soon as possible (and within 5 days to avoid a sanction) and will have to agree to a new Claimant Commitment. There is a deadline of 7 days to agree to the new Claimant Commitment: if the claimant misses this, their UC claim could be closed.

If they are going to struggle until they receive their next UC payment, they can request a Change in Circumstances Advance, which is a loan that would be repaid over 6 months out of  future UC payments. Whether they get one will depend on whether they can demonstrate that there is a serious risk of damage to the health or safety of the claimant or any member of their family and whether they can afford to repay it. They can apply online via their UC account or by calling the UC Helpline.

Already getting Tax Credits and/or Housing Benefit?

Someone who is currently in receipt of Tax Credits and/or Housing Benefit, may be able to stay on those benefits, but could be better off if they claim Universal Credit if eligible – they should seek advice from a Benefits Adviser who will be able to conduct a better off calculation.

NOTE: Some claimants - ie those protected by the ‘SDP Gateway’ - will be able to make a new claims for Income-Related ESA or Income-Based Jobseekers Allowance.

If they are not already receiving Council Tax Support they should make a claim as soon as possible from their Local Authority.

If they have school age children they may now be entitled to free school meals.

Not currently getting any means-tested benefits?

As long as they meet the general eligibility criteria for UC (click here) then they can make a claim for it. Whether they are entitled or not, and how much they are entitled to, will depend on their personal circumstances and income.

Timing of the claim may be an issue if they are due some payments from work - click here.


Benefit Cap

If they are claiming UC because their work has finished, and their total 'welfare' is higher than their Benefit Cap limit, then make sure the Benefit Cap is not applied straight away if they are entitled to the grace period.

This applies where they (or the claimant and partner between them, if a couple) have earned the monthly equivalent of 16 hrs a week x the living wage in each of the previous 12 months (this is £604 from April 2020, and £569 from April 2019).

In these cases the Benefit Cap should not be applied until after the 9 month grace period. The claimant might need to provide details of earnings for the previous 12 months. (Note that some claimants are exempt from the Benefit Cap anyway, due to receiving certain other benefits).

NOTE: We have heard that if a claimant does not specifically ask for the grace period to be applied, it could be missed, as the UC computer system does not automatically apply it. Claimants will need to provide evidence of the last 12 months' earnings (and those of their partner or ex-partner if applicable).

Other Help

If they are not already receiving Council Tax Support they should make a claim as soon as possible from their Local Authority.

If they have school age children they may now be entitled to free school meals.

Frequently Asked Questions
I am worried that I will be laid off – can I claim Universal Credit?
As long as you satisfy the basic claiming criteria for Universal Credit you will be able to make a claim. You have to: be working age, have savings/capital under £16,000, be in GB, not be excluded from UC (some students are excluded depending on age, level of course etc), not be claiming Tax Free Childcare, and agree to a claimant commitment. Whether you will have an award paid/how much will depend on your individual circumstances. You could use an online calculator to give an estimate of how much you may be entitled to.
If you are laid off, then the timing of your UC claim may be important (see below) and you should also make a new claim for Council Tax Support.

I’ve just been laid off and I’m due some holiday pay - when can I claim Universal Credit?
You can claim immediately, but depending how much holiday pay you are due, and when, you may be better off delaying your claim until you receive it. If you are due a significant amount of holiday pay in the next few days / couple of weeks, then it is more likely that it would be better to delay the claim until after you receive this payment. This is because this payment from your employer will reduce your UC award.
If you are entitled to a work allowance and the amount of holiday pay (and any wages you are still due) is less than this allowance, then you should claim immediately. This is because the payment from your employer will be totally disregarded and so not affect your UC award.
If you are not sure what you are best doing, contact a Benefits Adviser.


I've been laid off and I'm due some redundancy pay - can I claim Universal Credit?

Statutory and contractual redundancy payments, whether paid as a lump sum or over a given period, count as savings for UC purposes and not as earnings. So if a redundancy payment takes your total savings over £16,000, you would not be entitled to UC. If your savings (including your redundancy pay) are less than £6000 your savings will not affect the amount of UC you could get. Savings between £6,000 and £16,000 are deemed to generate an income. This is set at £4.35 a month for each £250 (or part of) you have above £6,000. So, for example if you have £9,450 in savings the DWP will include £60.90 as assumed income from these savings when they work out your UC entitlement (£9,450 - £6,000 = £3,450, £3,450 / £250 = 13.8 - so 14 x £4.35 = £60.90). You could use an online calculator to give an estimate of how much you may be entitled to.

I’ve just been laid off, and I’ve made a claim for Universal Credit. But my outgoings are going to be much higher than my income – what can I do?
Make sure you claim Council Tax Support to help you with your Council Tax Bill. If you pay rent and so have a Housing Costs Element included in your Universal Credit award you can also try for a Discretionary Housing Payment from your Local Authority.
Think about what bills / expenses you can cut down – there’s lots of useful information online. Speak to a Money Adviser who can help you renegotiate debt repayments and draw up a realistic budget.
Contact your Local Authority and ask if they can provide any help through their Local Welfare Assistance fund – note not all Local Authorities have these.
You could also contact your local Food Bank to see what help they can provide.