Housing Systems: Combating poverty and sustaining tenancies.

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'Escaping the UC Lobster Pot': No new UC claims in non-Digital areas

Since the closing of new claims to UC in the Live / Gateway areas (from 1st Jan 2018) one question that is being asked is:

‘Can those on UC in a Live / Gateway area now escape the lobster pot and claim HB, IS, IR-ESA, IB-JSA and / or Tax Credits instead?’

The answer is: Maybe - but care must be taken – especially by those looking to claim ESA instead.

Generally, once you have claimed Universal Credit (UC), you stay on it even if your circumstances later change – sometimes called the ‘lobster-pot’ principle.

However, there has always been a way of ‘escaping’ it for some UC claimants on the Live / Gateway service. Now that there are no new claims for UC in the Live / Gateway UC areas even from those who pass the gateway conditions (with some exceptions: see Briefing) - more claimants can escape the UC lobster pot including those wishing to make a new claim for Income-Based Jobseekers Allowance.

Getting back onto the legacy benefit system is very tempting for many UC claimants: some will be better off (see Briefing), some will have less conditionality, some will find it easier to budget, some will have a sanction removed (see Briefing); and those who have poor IT skills may prefer to be on the legacy benefits system.

But there’s plenty to think about in that there are some claimants who if they moved onto the legacy benefit system might be worse off or suffer other disadvantages:

For those wishing to claim ESA - the implications that this is a new claim (see Briefing).

  • Potential loss of passport benefits such as free school meals,
  • Those with third party deductions from their UC will find that they will not automatically transfer across,
  • They could be affected by the ESA and JSA waiting days,
  • They may have a higher work allowance (earnings disregard) under UC,
  • They may be entitled to help with child care under UC that they won’t get in the legacy benefit system
  • Future changes/plans that could mean they become better off on UC,

Note: This is not an exhaustive list

And timing will be crucial to ensure that claimants minimise the gap between their UC award ending and their legacy benefit entitlement starting (there will nearly always be a week where the claimant receives neither UC nor the legacy benefits – see Briefing.

Advice from an experienced welfare benefits adviser should always be sought before trying to escape so that a ‘better off’ calculation can be done and implications discussed.

Click here for the full Briefing