Free guide

Claiming Universal Credit

4 – 7 minutes to read

In this guide

Introduction
Universal Credit (UC)
Benefit Cap
Housing Costs
Working
Payment
Making a claim

1. Introduction

The UK welfare benefits system can be a minefield! Many people were totally unaware of the system and how it works until the COVID19 Pandemic began ravishing the Country and we were officially placed into lockdown on 23 March 2020.

We have since seen a major hike in claims, with almost 5.5 million people now claiming Universal Credit, an increase of 81% since March 2020. So, if you find yourself out of work, what do you do?

2. Universal Credit (UC)

First, you should visit this page which explains what other benefits have been amalgamated into UC, including a form of Housing Benefit referred to as ‘Housing Costs’.

The website walks you through your eligibility. It even has a link to a benefits calculator, allowing you to work out your entitlement beforehand: https://www.gov.uk/benefits-calculators

There is a breakdown of your basic entitlement, according to your circumstances which you will find here:
https://www.gov.uk/universal-credit/what-youll-get

3. Benefit Cap

There is a benefit cap in place, which means, based on your circumstances, you can only receive a certain amount p.c.m.

https://www.gov.uk/benefit-cap

There are various benefits which would take you out of the benefit cap.

https://www.gov.uk/benefit-cap/when-youre-not-affected

There is also a 9-month grace period which takes you out of the benefit cap for various reasons:

https://www.gov.uk/benefit-cap/how-earnings-affect-when-benefit-cap-starts

If none of various benefits are received by you or your joint claimant, and the grace period ends, your UC claim may reduce. This is important as it may affect your ability to pay your rent.

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4. Housing Costs

Housing Costs, which is a new reference for Housing Benefit, is paid as part of your UC claim, and it is thereby affected by the benefit cap. If your monthly entitlement, plus your Housing Costs take you above the benefit cap, you would need to create room WITHIN a very tight budget to pay your rent, and then meet your other costs.

You will receive payments of Housing Costs and you will thereby be responsible for paying your rent.

The Housing Cost rates for Susan would be between £1,280.46 p.c.m. (inner SW) and £1,047.11 pc.m. (outer SW) depending on where in South West (SW) London she lived. In ordinary circumstances this would make Susan’s rent affordable.

However, if she resides in ‘inner’ SW, her allowance is only £3.71 p.c.m. shy of the benefit cap. Baring in mind that her rent remains the same, and so she is still only left with £184.17 p.c.m. to live on.

If Susan were under 35, the Housing Costs rate would be £506.61 p.c.m. Susan would be unable to afford her rent.

The Housing Cost rates for John and Kemi would be between £1,375.01 p.c.m. (in Guildford) and £1,100.00 p.c.m. (in Blackwater Valley) depending on where in Guildford they lived. If they live in Blackwater Valley, they would receive an additional £566.57 p.c.m. in benefits, and £291.66 p.c.m. if they live in Guildford.

Bearing in mind that their rent remains the same, and so they are still only left with £166.67 p.c.m. to live on.

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5. Working

You can work whilst claiming UC. Your UC claim will decrease as your earnings increase. There is no limit on the amount of hours that you can work.

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6. Payment

Payments are made monthly, in arrears. The first payment will usually be a month and 7 days after the claim is made, and on the same date, monthly thereafter.

You should consider putting aside up to 1 month’s rent, in case you become unemployed.