What if I finish work?

Situation 1 – you’re on Universal Credit when you finish work.

If your job ends you must report this to DWP, on your online account. If you cannot access this you can phone on the UC helpline.

If you don’t report ending work within 7 days you could be sanctioned (link to sanctions page).

Your Claimant Commitment

Because you are no longer in work you’ll need to agree a new Claimant Commitment with your Work Coach. You must agree to the revised commitment within 7 days or face a sanction (link).
if you are fit for work this will probably mean having to look for work for 35 hours a week – go to this section (link to claimant commitment- am I expected to look for work?) to find out more.

For the first 3 months you’re out of work your Work Coach might let you limit the type of work you have to look for, or how much you earn, if they think it’s reasonable and that you have reasonable prospects of getting that type of work soon.

I know that while I was in work the Benefit Cap didn’t apply to me – will it apply now I’ve stopped working?

Not everyone has their Universal Credit reduced by the Benefit Cap – but some do. (link to benefit cap page). However if you’ve been in work for at least 12 months, there’s a 9 month “grace period” when your job ends, to protect you while looking for work. If you’re worried about the Benefit Cap, speak to a Benefits Adviser.

How do my final earnings affect my Universal Credit?

Even though you’re no longer working, your final earnings from work (which could include holiday pay, pay in lieu of notice, tax refund) will be taken into account in the Assessment Period when you finish work.

Example: Pam’s 12 month contract ends on 31st July and she gets her final wages of £800.00 plus one week’s holiday pay £280.00 = £1080.00. 
Pam and Rob (her husband)’s Assessment Period runs from 6th to 5th of each month.
Pam and Rob’s maximum Universal Credit is £1894.20 for the Assessment period 6th July to 5th August.
Their Universal Credit will be reduced by £499.59 because of these earnings, leaving £1394.61 UC to be paid in that monthly Assessment Period (assuming there’s no other income or deductions to come off).
See this section for how earnings are taken into account (link to How does UC work for workers)

Their next Universal Credit payment for the Assessment Period 6th August to 5th September (assuming there’s no other income or deductions to come off and no changes to their circumstances) will be £1894.20.

What if I get a Redundancy Payment?

Statutory and contractual redundancy payments, whether paid as a lump sum or over a given period, don’t count as earnings but as capital.

So the effect on your Universal Credit depends on how much redundancy pay you get.

  • If you get a redundancy payment that takes any savings you have over £16,000, you won’t be entitled to UC from the start of the Assessment Period in which you get it.
  • If it takes your savings to anywhere between £6,000 and £16,000 then your Universal Credit will either reduce, or reduce to nothing and take you off Universal Credit.
  • If you get less than £6000, and it doesn’t take any savings you have over £6000, then it doesn’t affect your Universal Credit amount.

What if I still have to pay for childcare?

If you have had a Child Care Element in your Universal Credit award while you were working, and you are still paying for childcare (for example because your childcare provider requires payment for a notice period) you can still have the Childcare Cost Element included for the Assessment Period in which the job finishes, and in the following Assessment Period.

Can my children get free school meals now?

It depends on your overall earnings for the year – but the rules can be quite complicated, If you’re not sure speak to your local authority. (link to further financial help page)

Situation 2. You haven’t claimed Universal Credit yet- but you need to because your job’s ended.

You’ll need to think carefully about when you claim.

Earnings are taken into account to reduce how much Universal Credit you can get, in the monthly Assessment Period in which you are paid. Your first Assessment Period starts on the date uou make a claim.

Final earnings, holiday pay, pay in lieu of notice, and tax refunds all count as earnings.

So if you know you’re going to be paid in a few days, it can be worth delayng claiming until after you’ve got these final earnings so they’re not taken into account – depending on how much you get it could mean you get no Universal Credit at all in your first Assessment Period and have to put in a reclaim.

But obviously if it could be a while, you don’t want to wait too long. Speak to a Benefit Adviser if you want to work out what’s best for you.

Can my children get free school meals?

It depends on your overall earnings for the year – but the rules can be quite complicated, If you’re not sure speak to your local authority. (link to further financial help page)