Is claiming UC the best option?
When someone loses their job, or sees a drop in their income, the automatic response from the DWP or Local Authority seems to be ‘claim Universal Credit’.
However this may not always be the best option.
If you are already getting any of the benefits Universal Credit replaces – in particular Tax Credits and/or Housing Benefit – then you may be better sticking with these and staying on the ‘legacy benefit’ system.
This is because:
- Your Tax Credit award can continue: for 4 weeks if you’ve lost your job, or for as long as the Job Retention Scheme / Self-Employed Income Support Scheme is in place (even if you are not on one of these schemes) if the drop in your wages/hours is only going to be a temporary thing.
- Any Housing Benefit you are getting can be reassessed to take account of your lower income.
- If you make a claim for Universal Credit any Tax Credits and/or Housing Benefit you are currently receiving will stop (although you may be entitled to a two week run-on of Housing Benefit).
- You will then have to wait around five weeks before your first payment of Universal Credit.
- If you make a claim for Universal Credit then you can receive an Advance Payment, but this is a loan that you will have to repay.
- For some people Universal Credit pays less than the Tax Credits and/or Housing Benefit they have been getting and so you could find that in the long run you 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 you receive every month.
- If you do find yourself worse off there’s no going back!
However if you are going to struggle financially then claiming Universal Credit may be the only option you realistically have.
Janet’s hours have been reduced at work, her wages have dropped and she’s wondering how she is going to pay her rent. She’s been told to claim Universal Credit – but she’s not sure she is entitled as she is still in work. She’s currently getting Working Tax Credit.
She decides to chat to a Benefits Adviser – who explains that her Working Tax Credit can continue even though her hours have dropped, and that she would be slightly better off on Universal Credit.
However, she decides to stay on Tax Credits because she doesn’t think her hours will be reduced for much longer and the Benefits Adviser explained that as she is paid by her employer weekly, the amount of Universal Credit she receives will vary and she thinks this could cause her budgeting issues.
Making a new claim for Universal Credit
You should make a claim for Universal Credit in the normal way.
See How do I claim? for more information
But you might not be required to attend the Job Centre:
- New claim interviews will mostly be conducted over the phone. Job Centres are open 10am to 2pm for people who need extra support and cannot go online or use a phone – note you will need to wear a face mask.
- If you cannot verify your ID online, then leave a message on your journal or, if you can’t access your journal, phone the Universal Credit helpline 0800 328 5644, and the DWP will call you and verify your ID over the phone instead.
- If you need an Advance Payment you can apply for this online – but you will normally have to verify your ID before a payment can be made.
Your Job Centre will know you have applied online: they will call you if they need to confirm any information with you in order to progress your claim.
Rashid made a claim for Universal Credit when his job ended.
He claimed online and received a phone call from the DWP the following day, who took him through his claim and he provided them with evidence of his rent, a photo of his passport and his final pay slip.
He did not need to attend the Job Centre – everything was sorted out over the phone.
IMPORTANT: Some claimants finishing work may be better delaying making the claim where they are due some final earnings/holiday pay etc. shortly after finishing work – see What if I finish work for more information.
The Claimant Commitment
Due to the Coronavirus outbreak, all work search requirements were suspended for a while, but they are now back. However your work coach must take account of your personal circumstances when looking at what you are reasonably able to do in looking for work.
Everyone needs to agree a Claimant Commitment.
See What is the Claimant Commitment for more information.
Depending on your circumstances you will either be required to look for work or to undertake some work related activities – so keep checking your journal and complete any tasks given or explain on your journal why you are not able to complete them.
See What do I have to do? for more information.
Colin and Sandra made a claim for Universal Credit when Sandra lost her job.
Sandra is fit for work and has no caring responsibilities so she is expected to look for work for at least 35 hours a week. She has agreed with her Work Coach to prepare a CV and make a list of the businesses she can send this to. This has been included in her Claimant Commitment and if she fails to do this she could be sanctioned (which would mean Colin and Sandra’s Universal Credit payment being reduced for a period of time).
At some point in the future her Claimant Commitment may be changed, either to take account of an improvement in the jobs situation in the area, or a change in her own situation. She will be given 7 days to accept this new Commitment online, otherwise Colin and Sandra’s claim for Universal Credit will be closed.
I need help paying my rent
A Universal Credit award can include an amount towards your rent – called a Housing Costs Element.
See Help with your rent for more information.
If you are awarded some Universal Credit and it includes a Housing Costs Element then you may also be able to get additional support towards your rent through the Discretionary Housing Payment scheme.
See Discretionary Housing Payments for more information.
Melanie made a claim for Universal Credit when her hours dropped at work. When her Universal Credit is assessed it included a Housing Costs Element which means that it is taking account of the rent she needs to pay.
However she is still struggling as she lives on her own in a Housing Association two bedroom flat and so her Housing Costs Element is reduced by a Bedroom Tax (underoccupancy) reduction. Her Income Officer has advised her that she could make a claim for a Discretionary Housing Payment from her local Council – she will need to explain why she is struggling to pay her rent.
What if I’m not entitled?
If you’re not entitled to Universal Credit then there may be other benefits that you could be entitled to – it all depends on your circumstances.
Universal Credit is a means tested benefit, so there are rules about your savings and income. And Universal Credit takes account of any partner’s savings and income too.
If you’re not entitled because your savings / income is too high then you may still be entitled to other benefits – such as Statutory Sick Pay, New-Style Employment and Support Allowance, New-Style Jobseekers Allowance, Carers Allowance.
So do speak to a Benefits Adviser.
Steve and Belinda live with their two children in a two bedroom rented house. Up until recently they were both working but Belinda has just been made redundant. Due to Steve’s earning they are not entitled to any Universal Credit. But Belinda had been working for five years (since her youngest started school) and so she has been awarded New-Style Jobseekers Allowance – this will give them an extra £74.70 a week for a maximum of 6 months.
IMPORTANT: The DWP phone systems mean calls from them should display as 0800 232 635 but may display as other 0800 numbers, or an unknown number. If you get a call from an unknown number following a message in your UC account, answer the call as it’s likely to be DWP.
WARNING: There are many scams…..people trying to get you to tell them your bank account details. If you receive a call from someone saying they work for the DWP and asking for your bank account details, ask the caller to post a specific form of words into your Universal Credit journal so you can be sure it’s them.
The DWP regularly produce guidance or introduce new measures that may change the information on these pages. Please check back regularly for updates on the arrangements the DWP is making to support those who are affected by Coronavirus.