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Coronavirus: Universal Credit - Wages dropped
Universal Credit - Wages Dropped
Already getting Universal Credit?


Someone who is currently in receipt of Universal Credit, and who finds that their wages have dropped, 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 if their hours have also dropped they may have to agree to a new Claimant Commitment. There is a deadline of 7 days to agree to a new Claimant Commitment: if the claimant misses this, their UC claim could be closed.

If they are going to struggle financially 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.

Benefit Cap

Where someone is making a new claim for UC following a drop in wages, then the grace period can apply as long as their earnings in the 12 months prior to making that claim are above the £604/£569 threshold. So where someone has delayed making the claim they could miss out on this grace period.


The grace period 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 £617 from April 2021; £604 for the previous year 2020-21).


In these cases the Benefit Cap should not be applied until after the 9 month grace period. The claimant will be required 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).

If they are refused because just one or two of the 12 months their earnings appear to fall below the threshold they should contact a Benefit Adviser to check that there hasn't been an error, for example in the dates that DWP have used. Likewise if someone has been earning just at or slightly over the threshold but is paid weekly or 4 weekly they might be denied the grace period - again they need to seek advice.


Extra help


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

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

 


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.

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

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



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.

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

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

Frequently Asked Questions
I'm getting Universal Credit to top up my wages. But I've had to self-isolate - is there anything I should do?
Contact your Work Coach – let them know that you are self-isolating. Provide an 'isolation notice' 
form NHS111 online and request that you be treated as having a ‘Limited Capability for Work’ as someone who has a notifiable disease as per paragraph 3 of Schedule 8 of the UC Regulations 2013, and, if your award does not already include a work allowance, you may now be entitled so request that this is included as this would increase your UC award. Keep looking at your UC account / texts and watch out for any ‘to-do’s’ – make sure you do complete any given to you. Keep your Work Coach informed of your situation. If you are not a 'furloughed worker' and you are likely to be off work for more than 7 days, provide the ‘isolation note’ to your employer.


I’m on UC, been working but I’ve been told that there’s no work for me for the next few weeks and am not part of the Job Retention Scheme so will not get any 'furlough' income. What should I do?

You should let your Work Coach know - leave a message on your journal.

The next time your UC is assessed – at the end of your Monthly Assessment Period - it will be based on any wages that were received during that Monthly Assessment Period. So if your work income has dropped you should see an increase in your UC award. 

You may become eligible for free school meals, if your earnings are less than £616.67 in any Monthly Assessment Period. You can ask the school / LA for free school meals: while schools are shut, the government have announced a voucher system for children who aren’t in school. If you live in England or Wales and qualify for free school meals for a child, you will keep that entitlement until they finish the level of education (ie. primary / secondary / further) which they are in at the time when Universal Credit is fully rolled out (now expected to be September 2024).

If you cannot wait until you receive your next Universal Credit payment, you could request a Change in Circumstances Advance. Whether you receive one will be up to the DWP and it is a loan that would be repaid over 6 months out of your future UC payments.

You may be eligible for some Council Tax Support (CTS) - even if you are only awarded a small amount for a limited period of time it is still worth applying as anyone on CTS during 2020 should also receive a further £150 off their Council Tax bill

Keep checking your texts or emails for messages from your work coach.


I’m off work at the moment due to self-isolating, but I still need to pay for my child care. Universal Credit usually pay 85% of the cost – will they still do so when I’m not actually going into work?
If you’re receiving Statutory Sick Pay (SSP), the UC rules still class you as working, so you will continue to qualify for the Childcare Costs Element of UC. But you will still need to report the childcare costs and notify UC once they are paid.
If you don’t qualify for SSP then it will depend on how quickly you go back to work. If you are back within a couple of weeks you should see no difference, but if you are off more than a month, you might find that your Childcare Costs Element stops. You could try asking your Work Coach if the Flexible Support Fund could help – explain that if you lose the childcare place you’d have to give up work. 


I get Contribution Based ESA (in the support group) and Personal Independence Payment and have done for years. My partner usually works part time but has been temporarily laid off because of the Coronavirus outbreak and so isn't getting her normal wages. We're going to struggle to pay the rent. Do we have to claim Universal Credit? 

If you have been on ESA for years, it is probably ‘Old Style’ Contribution Based ESA. This means that you may be eligible for a top up from Income Related ESA, depending on how much your partner is still earning (and assuming the DWP don't treat her as still working your normal hours). But this would provide any help towards paying the rent.

If you are getting Daily Living PIP, and your partner spends 35 hours a week caring for you, then - depending on your partner's earnings - she may be able to claim Carers Allowance for looking after you. This would give you an extra £67.60 a week, but this would depend on her wages.

You may be better off on Universal Credit - the assessment would include a Standard Allowance*, LCWRA Element and a Housing Costs Element and possibly a Carer Element too. Because you have a limited capability for work, there would be a work allowance, meaning more of your partner's wages would be ignored when your UC is calculated. Your ESA (and any Carers Allowance) would count as income when UC is calculated.
* Note that the UC standard  allowance has increased by £20 per week for the year April 2020 - 21 but there has been no increase in ESA, 

Ideally you need a benefit check to decide what is best for you.

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