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Looking for any other deductions

This is step 3 of a manual calculation. Every UC calculation and statement starts off with maximum amount of UC and then deductions are applied to this. In step 2 we looked at deductions for earned income

 

Here we look at deductions for any other deductions which include:

Overlapping benefits
Other unearned income

Student income

Savings & capital

You may also have a deduction for advance repayments and debts but this is deducted after the next step.

Overlapping benefits

On Universal Credit, certain benefits are taken fully into account when calculating UC payments. This means that you may be paid a different benefit by another department but that amount is deducted off your UC £ for £.

Other benefits taken fully into account:

  • Bereavement Allowance (Bereavement Support Payment is ignored)

  • Carer's Allowance (Scottish Carer's Allowance Supplement is ignored)

  • Incapacity Benefit

  • Industrial Injuries Disablement Benefit (Constant Attendance Allowance or Exceptional Severe Disablement Allowance is ignored)

  • Maternity Allowance

  • New Style Employment and Support Allowance

  • New Style Jobseeker’s Allowance

  • Severe Disablement Allowance

  • State Pension

  • Widowed Mother’s Allowance

  • Widowed Parent’s Allowance

  • Widow’s Pension

There are benefits which are ignored including PIP, DLA, Child benefit, Fostering Allowance.

You can read more info by clicking here.

 

As UC is paid monthly and most other benefits are paid on a weekly, two weekly or four weekly basis, the amount deducted from your payments will be converted to a monthly amount to ensure an accurate reflection.

If you have an overlapping benefit, convert the amount into a monthly amount and write it and check if any other deductions apply to you.

Anchor 1

Other unearned income 
On Universal Credit, certain other income are taken fully into account when calculating UC payments. This means that you may be receiving some income but that amount is deducted off your UC £ for £.
The following types of income are taken into account in full (the gross amount):

  • occupational and personal pensions including income from an overseas arrangement, this includes an income drawn from a pension fund, any income payments from a pension fund and annuity payments (please note, lump sum irregular draw-downs must be treated as capital)

  • foreign pension payments

  • spousal or non-child maintenance (child maintenance is disregarded in full, whether formal or private agreement)

  • assumed yield income from capital

  • capital treated as unearned income

  • Income Protection Insurance, payments payable in respect of loss of income due to illness, accident, or redundancy

  • training allowances, these are payments under the Employment and Training Act 1973 and Scottish equivalent which are paid for ordinary living expenses or as a substitute for Universal Credit sports awards for ordinary daily living costs made by one of the Sports Councils named in section 23(2) of the National Lottery etc. Act 1993

  • income from capital held in trust, except for income from a trust established as a result of an agreement or court order in respect of personal injury compensation or income from a special scheme for compensation.

  • any other income that is taxable under Part 5 of Income Tax (Trading and Other Income) Act 2005 which includes income from patents, royalties and intellectual property, certain licensed telecommunications rights and other non-work income not taxed elsewhere

  • payments from an annuity or already disregarded as personal injury compensation (please note, some people receive an annuity from their occupational or personal pension)

  • pension protection fund payments

  • claimants must declare Welsh Basic Income Scheme payments for care leavers as they are taxable income under Part 5 of the Income Tax (Trading and Other Income) Act 2005

UC is paid monthly, some other income paid on a weekly, two weekly or four weekly basis, the amount deducted from your payments will be converted to a monthly amount to ensure an accurate reflection.

If you have other unearned income, convert the amount into a monthly amount and write it and check
 if any other deductions apply to you.

Anchor 4

Student income

It's important to note that Universal Credit will assess your student income based on any student income you would be entitled to, regardless of whether or not you choose to apply for it.

If you have maintenance loan, bursary or certain grants for living costs - there may a deduction to your UC. There is £110 disregard per assessment period.

You can read more info by clicking here.​

If you have a deduction for student income, write it down and check if any other deductions apply to you.

Anchor 2
Anchor 3

Savings & capital

“Capital” is not defined but includes lump-sums, one-off payments, savings, investments, property, land and other assets.

Some examples of capital include: 

  • bank accounts

  • Post Office accounts

  • cash

  • one off lump sum payments including inheritance and redundancy payment

  • stocks and shares

  • premium bonds

  • Help to Save

  • save as you earn

  • property

This list is not exhaustive.

The upper capital limit is £16,000. Having regarded capital above this level means you are not eligible to claim Universal Credit.


Regarded capital at £6,000 and up to and including £16,000 causes a deduction to Universal Credit.
This is due to the assumed yield of £4.35 for every £250 above £6,000.
Where the regarded capital amount is under £6,000, this is disregarded by Universal Credit and causes no deduction.

If you do have capital, it is very important you understand how capital on UC works so you can ensure your payments are being calculated correctly.

You can read more info by clicking here.​

If you have a deduction for savings & capital, write it down .

You now have an amount for other deductions. 

This will be deducted off your maximum Universal Credit amount.

Be sure to move onto step 4.

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