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Ask the expert: how does Universal Credit work?

Our advisor answers a question on Universal Credit, from someone looking to get more financial support.

You asked:

I’ve recently given up my job to look after my mum. I live with my mum and the only income I have is Carer’s Allowance. I had about £2,000 saved, but this is pretty much gone now, and I’ve been wondering if there are any other benefits I could claim. I’m a bit confused because I spoke to a friend who suggested I claim Income Support, but when I spoke to the Jobcentre they told me that I can’t claim Income Support because everyone in my area now has to claim a benefit called Universal Credit. Can you help?

Our advisor says: 

The benefit system is complicated, so it’s not surprising if you feel a bit unsure about what benefits you can claim. Universal Credit (UC) is a means-tested benefit for working age people that is being gradually introduced. It is replacing Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Housing Benefit, Child Tax Credit and Working Tax Credit (all known as legacy benefits).

When UC will affect you will depend on your circumstances and where you live. It is gradually being rolled out across the UK. 

It sounds like your area is a full (digital) service area, which means you wouldn’t be able to make a new claim for Income Support as a carer, and would have to claim UC instead. You can check this on the Revenue Benefits website, where you can enter your postcode, and it tells you whether you are in a full (digital) service area and so have to claim UC.

I have outlined some information on UC below, so you have a better idea of what to expect.

Note: If you are already getting a legacy benefit, and there are no changes in your circumstances, UC won’t affect you until you are migrated over to UC, which is called managed migration.

At the moment, managed migration isn’t expected to happen until 2019. UC is a monthly benefit (and is paid monthly in arrears), with each month being called an assessment period.

To work out how much UC you will get, the DWP will:

  • work out your maximum UC amount
  • work out your income
  • deduct your income from your maximum UC amount

Example: You are aged 25+, your only income is Carer’s Allowance of £64.60 and you don’t have savings over £6,000. You apply for UC and your award is worked out as follows:

  • Maximum UC amount = £317.82 (standard allowance) + £156.45 (carer element – this is included if you meet the eligibility conditions for Carer’s Allowance or would do so but for the fact that your earnings are too high) = £474.27
  • Income = £279.93 (Carer’s Allowance)
  • Maximum UC amount (£474.27) - income (£279.93) = £194.34 a month

You will continue to be paid the Carer’s Allowance of £64.60 pw, and will get monthly payments of UC of £194.34 a month As UC is paid monthly in arrears it means you will have to wait over a month before you will get your first UC payment. If this will be difficult, you can apply for a short-term advance payment. You should be able to get a month’s worth of UC which should be paid to you within five days. While for some people UC will be less than the amount they could have got on legacy benefits, for those in your situation, you will actually get a tiny bit more on UC than you would have on legacy benefits.

UC involves a ‘claimant commitment’ which is an agreement that you will meet certain work related requirements. However, for carers who meet the eligibility conditions for Carer’s Allowance (or who would do so but for the fact that their earnings are too high), there will be no work related requirements included in your claimant commitment.

You have to claim UC online here. Claim as soon as you can, as UC can only be backdated for a maximum of one month; and this can only happen if one of a very limited set of circumstances apply to you and because of this you could not reasonably have claimed earlier.

More information on UC

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