What if I finish working?

If you are already getting Universal Credit

If you are already getting Universal Credit you should let your Work Coach know what is going on as soon as possible (and within five working days to avoid a sanction) and you will have to agree to a new Claimant Commitment.

There is a deadline of seven days to agree to the new Claimant Commitment and if you miss this deadline your claim will be closed.

If you have received a redundancy payment you will need to report this to the DWP. Redundancy payments are classed as savings rather than earnings. If you now have total savings/capital of over £16,000 you will no longer be entitled to Universal Credit and your claim will end from the beginning of the Assessment Period in which you received the payment. Savings between £6,000 and £16,000 will reduce your UC entitlement.

See What if I finish work for more information.

If you are still entitled to Universal Credit, then next time your Universal Credit award is assessed it will take your drop in income into account – but it might still include some payments from work.
See What if I finish work for more information.

If you’re are going to struggle until you receive your next Universal Credit payment, you can request a Change in Circumstances Advance, which is a loan that would be repaid over 6 months out of your future Universal Credit payments.
See Need extra financial help for more information.

Tanya had been getting Universal Credit to top up her wage since having her daughter last year. She has just been made redundant and has reported this on her UC journal. She is expecting to receive a redundancy payment of £4,600 as well as some holiday pay.
Her Universal Credit award will take into account any final wages / holiday pay that she is due – these will be included as earnings when her Universal Credit is assessed in the Assessment Period that they are paid.
But the redundancy payment is classed as savings, not earnings, and as long as her total savings remain below £6,000 the redundancy payment will not affect her Universal Credit award.

Already getting Tax Credits and/or Housing Benefit?

If you are currently in receipt of Tax Credits and/or Housing Benefit then you may be able to stay on those benefits, but you might be better off if you claim Universal Credit.

Note: that once you’ve claimed Universal Credit you can’t go back to Housing Benefit and/or Tax Credits – so seek advice from a Benefits Adviser who will be able to conduct a better off calculation.

Jon has been getting Tax Credits to top up his wages and a small amount of Housing Benefit too. When he lost his job he contacted a Benefits Adviser who explained that although his Working Tax Credit would end, his Child Tax Credit would stay in payment,  he could claim New-Style Jobseekers Allowance (because he met all the eligibility criteria) and his Housing Benefit award would increase. They worked out that while the Jobseekers Allowance was in payment (a maximum of 6 months) he would be not better off on Universal Credit. And that if he found another job he could get back onto Working Tax Credit. So Jon has decided not to claim Universal Credit yet.

Not currently getting any means-tested benefits?

As long as you meet the general eligibility criteria for Universal Credit then you can make a claim for it.
See Who can get Universal Credit? for more information.

Whether you are entitled or not, and how much you are entitled to, will depend on your personal circumstances and income.
See How Much – the basics for more information.

Timing of the claim may be an issue if you are due some payments from work.
See What if I finish work for more information.

Badrul has been working full time. But his employer had to make him redundant: he will receive some final wages and a redundancy payment of around £2,400.
He contacted a Benefits Adviser who explained that as he has no other capital/savings, the redundancy payment will not affect his Universal Credit award. But she worked out that because Badrul is due a large payment of earnings in the next few days he is best waiting until after he has received this final wage payment before making a claim for Universal Credit.

Benefit Cap

If you are already on Universal Credit or claiming it because your work has finished, and your total ‘welfare’ is higher than your Benefit Cap limit then you may find that your Universal Credit award is reduced.

The Benefit Cap generally only affects families with three of more children, or those with high rents.

But if you have been working for 12 months or more then you may find that the Benefit Cap should not be applied straight away – you may be entitled to a ‘grace period’. You are entitled to a ‘grace period’ if you have earned above a certain amount  – £617 gross from April 2021 (£604 gross between April 2020- March 2021) in each of the 12 months before finishing work. In these cases the Benefit Cap should not be applied until after a 9 month ‘grace period’.

If you have not earned enough or for long enough then the Benefit Cap may apply – although some claimants are exempt from the Benefit Cap anyway, due to receiving certain other benefits.

See Benefit Cap for more information.

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 Universal Credit computer system does not automatically apply it.