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Coronavirus: Universal Credit - Is Claiming UC The Best Option?
Universal Credit - Is Claiming UC The Best Option?
When someone loses their job, or sees a drop in their income, the automatic response seems to be 'claim Universal Credit'.

However this may not always be the best option.

If they are already getting any of the benefits Universal Credit replaces - in particular Tax Credits and/or Housing Benefit.- then they may be better sticking with these ie staying on the 'legacy benefit' system. This is especially true for those claimants whose income is only dropping temporarily.

This is because:

  • If they make a claim for Universal Credit any Tax Credits and/or Housing Benefit they are currently receiving will stop and they will not be able to get back on them (although they may be entitled to a two week run-on of their Housing Benefit).
  • They will then have to wait around 5 weeks before they can receive any Universal Credit.
  • If they make a claim for Universal Credit they can receive an Advance Payment, but this is a loan that needs to be repaid.
  • For some people Universal Credit pays less than the Tax Credits and/or Housing Benefit they have been getting and so they could find that in the long run they end up worse off.
  • More deductions for debts can be taken from a Universal Credit payment than from a Tax Credit or Housing Benefit payment – these will reduce how much they receive every month.
  • Some - who have been getting Tax Credits - may find that they are not entitled to any Universal Credit, but will not be able to get their Tax Credits reinstated. Tax Credit claimants who have savings of over £16,000 will not be entitled to any UC (due to the savings limit) but will not be able to go back onto Tax Credits.

Due to these issues many people are put off claiming UC and struggle on. This is especially true of those getting Tax Credits who do not want to lose them. But many working claimants are better off on Universal Credit. This includes:

  • Working carers - who can be entitled to a Carer Element in their UC award regardless of the hours they work or the pay they receive.
  • Those with childcare working less than the 16 / 24 hours a week required for the Childcare Costs Element in Tax Credits - because UC does not require a minimum number of hours in order to receive help with eligible childcare costs.
  • Couples where one works and the other has a health condition that limits their ability to work - as if the non-working partner is found to have a Limited Capability for Work Related Activities their UC award then includes the LCWRA Element, and a work allowance.

BUT each case is different and there are many factor to consider. So claimants should always seek advice from a benefits adviser to ensure they are aware of all their options.


Frequently Asked Questions
As my hours and therefore my income has dropped temporarily, I’ve been struggling for a while, but this month paying my rent is going to be difficult, I’ve been told I should claim Universal Credit – is this a good idea?
That depends on whether or not you are currently getting any of the benefits Universal Credit replaces - in particular Tax Credits and/or Housing Benefit.
If you are not currently getting any of the means-tested benefits, then you may have nothing to lose by making a claim for Universal Credit. Whether you are entitled and how much you will receive will depend on your income, savings and personal circumstances.
If you are currently getting Tax Credits and /or Housing Benefit, then you may be better off staying on these in the long run. Seek advice from a Benefits Adviser.
If you do decide to claim Universal Credit, then it could be that delaying your date of claim could be beneficial to you click here. So please seek advice from a Benefits Adviser.
And contact your landlord to let them know your current situation.

I'm self-isolating and work has said they will pay me Statutory Sick Pay (SSP), but this is all. I'm going to struggle to manage - is there anything else I can claim?
That depends on whether or not you are currently getting any of the benefits Universal Credit replaces - in particular Tax Credits and/or Housing Benefit.
If you are not currently getting any of the means-tested benefits, then you may have nothing to lose by making a claim for Universal Credit. Whether you are entitled and how much you will receive will depend on your income, savings and personal circumstances.
If you are currently getting Tax Credits and /or Housing Benefit, then you may be better off staying on these in the long run. Seek advice from a Benefits Adviser and contact your landlord to let them know your current situation.

My pay from work has dropped and I’m really struggling. I don’t know how I’m going to pay this week’s rent – I’ve been told that if I make a claim for Universal Credit I can get an interest free loan within days, and that would really help. Is this true?
Someone who makes a new claim for Universal Credit can receive an Advance Payment. How much they receive depends on their income and personal circumstances. 
An Advance Payment is an interest free loan and you can pay it back over 24 months – the repayments are taken out of your Universal Credit award before you receive the payment.
If you are not currently getting any of the benefits Universal Credit replaces in particular Tax Credits and/or Housing Benefit, then you may have nothing to lose.
However, if you are getting them, then as soon as you make a claim for Universal Credit these benefits will stop and you will not be able to get back on them. Some people are worse off on Universal Credit. So before you make the claim for Universal Credit you need to ensure that this is – in the long run – the best option for you.
If you do decide to claim Universal Credit, then it could be that delaying your date of claim could be beneficial to you click here. So please seek advice from a Benefits Adviser.
And contact your landlord to let them know your current situation.

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