25 March 2021

Will I be better off claiming Universal Credit?

Debt awareness week original

Universal Credit was introduced in 2013 and is steadily replacing the legacy benefits:

  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credit
  • Working Tax Credit
  • Housing Benefit

Universal Credit is a means tested benefit and entitlement is based on the household income. Unlike some of the legacy benefits, there is no limit on the number of hours a claimant can work and you don’t have to worry about reporting changes to wages. You may be eligible for a work allowance and if you are, 63p of benefit will be deducted for every £1 the claimant earns.

A legacy benefit claimant can move over to Universal Credit at any time. In some circumstances an individual may be better of claiming Universal Credit to take advantage of:

  • £20.00pw COVID-19 uplift payment, which is only paid to those claiming Working Tax Credit
  • Non Dependent Deductions are set at a flat rate of £75.15 per month, compared with £444.00 per month (maximum) for Housing Benefit
  • 2 weeks additional payment when you move from Income-based Jobseekers Allowance, Income-related Employment and Support Allowance or Income Support
  • 2 weeks additional payment when you move from Housing Benefit.

To see the difference a Universal Credit switch may bring to you, read Sara’s story.

Sara could be £948.00 better off by doing nothing other than simply moving to Universal Credit.

Sara is 26 years old and unemployed. Sara claims Income-based Jobseekers Allowance, a benefit for working age people who are unemployed and actively looking for work. The benefit covers her living costs and she receives Housing Benefit which covers her weekly rent of £120.00 in full.

If Sara claimed Universal Credit her Income-based Jobseekers Allowance and Housing Benefit claims would automatically end. The new Universal Credit award would include money to pay for her rent in full, however the money to cover her living costs would include the COVID-19 uplift payment of £20.00per week.

In addition to this, Sara would receive 2 weeks run on payments to help her with the move from legacy benefits to Universal Credit. Sarah would receive one off payments totaling:

  • £148.70 in respect of the move from Income-based Jobseekers Allowance to Universal Credit
  • £240.00 in respect of the move from Housing Benefit to Universal Credit

The COVID-19 uplift payment will be paid until September 2021, so if Sara continued to claim Universal Credit until September 2021, she would be better off by £560.00.

Overall for doing nothing other than moving from her legacy benefits to Universal Credit, Sarah would receive an additional £948.00 and £388.00 of this increase would be paid within 2 -4 weeks of her legacy benefits ending.

Why not let our Financial Inclusion team check if you will be better off claiming Universal Credit?

How to get help in 3 easy steps

During Debt Awareness week on 22-26 March 2021, we will extend our Advice Line to operate daily.

1. Call our Advice Line on 020 8354 5500 between 9.30 - 11.00am 

2. Your details will be logged

3. Our Financial Inclusion team will call you back the same day, usually within 15 minutes

If you need a longer appointment call us on 020 8354 5500 Mon-Fri 9.30am - 4.30pm