But something to think about before you start working with your new budget...

The maximum amount that Universal Credit can deduct off you is based a percentage of your Standard Allowance.  This means that you may have already been paying back to maximum amount and now that the rates are increasing, they may start to take a further amount of you.

They will not increase your advance repayments.  They never take more than the amount that you agreed, unless it relates to an old claim and has now become an ordinary debt.

The basic rule is they can take 30% of Standard Allowance for advances and ordinary debts.

The increased rates are as follows - 

So while it is beneficial that the standard allowance and other rates are increasing and you will benefit from it, you may find that if your deductions increase that you don't feel the benefit uprating as much as initially planned.

Read more info about deductions including rent arrears and what to do if this will cause you hardship here.

With the news that the minimum wage is increasing, many claimants first thought is that a higher wage means less Universal Credit.

The work allowance is the amount that you can earn before deductions for take home pay start.  The rates are currently £287 and £503.

Along with other Universal Credit rates increases, the new lower work allowance will be £292 and the higher work allowance will be £512.  For every £1 earned over this, your Universal Credit will be reduced by 63p.

To calculate your deduction for take home pay -

Total earnings paid during assessment period minus work allowance
​ and then multiply by 0.63

It was only October that Universal Credit claimants were delighted to see that the harsh 40% deduction rate was being changed to 30%, meaning an increase in lots of people's payments.  

While an increase to Universal Credit rates is good news, this means that deductions will increase as they are based on a percentage.

While the new deduction increase may seem small, when someone is living on a low income, things are already tight enough.

For more info - deductions for debt on Universal Credit

Universal Credit payments are increasing - click to see how much yours will change

This is the first time in a number of years that child benefit rates will be increasing (and it's not a substantial increase).

From April 2020, the new weekly rates will be -

This April, Universal Credit amounts will be increased.  This year has quite a number of increases which should hopefully see claimants better off.

Everyone on UC has a standard allowance based on their circumstances.  This rate is changing for everyone.

Update - this will be included for payment dates of 13th April 2020 and thereafter.

If you have child element on your claim, you will see an increase.

Update - this will be included for payment dates of 12th May 2020 and thereafter.

The benefit cap can be worrying and causes lots of confusion, so we have put together some basic info that should help.

• The benefit cap is not the same thing as the 2 child cap.
• The benefit cap on Universal Credit has entirely different rules to people on Housing Benefit.
• It is possible to be benefit capped without claiming housing element.
• It is possible for someone to benefit capped by more than their housing element.
• The benefit cap does not apply and is not relevant as long as you earn above £604 in an assessment period. 
• Working 16 hours does not always guarantee that you will have enough earnings to remove the benefit cap.  It depends on how often you are paid.
• During a new claim you are asked a series of questions which are assessing your eligibility to the benefit cap 'grace period'.
• It may say on your statement that the grace period will apply from a certain month.  It says this even if you do not receive enough in benefits to be benefit capped or if you are exempt.
• If you are reading information about the benefit cap and it says anything about "39 weeks" or "50 in 52 weeks" then this only relates to Housing Benefit.  Universal Credit do not use the same rules.

The Government decided that if people weren't earning the equivalent of 16 hours a week at national living wage without a legitimate reason they couldn't (sick/caring/disabled/etc.), then they wouldn't allow them to have more than a certain amount in benefits per month. 

The current cap is:
Outside of Greater London Borough -

• Couple (with or without children) or a single parent - £1666.67 per UC assessment period
• Single person without children - £1116.67 per UC assessment period

If you live in a Greater London Borough

• Couple (with or without children) or a single parent - £1916.67 per UC assessment period
• Single person without children - £1284.17 per UC assessment period

The benefit cap will not apply if -

• You earn more than £604 in an assessment period (£569 before April 2020).
• You (or your partner or child) are receiving:
  • Personal Independence Payment (PIP)
  • Disability Living Allowance (DLA)
• You (or your partner) are receiving
  • Attendance Allowance (AA)
  • Carer's Allowance 
  • Guardian's Allowance
  • Carers element of Universal Credit
  • Support component of Employment and Support Allowance (ESA)
  • Limited Capability for Work Related Activity (LCWRA) element of Universal Credit
  • Armed Forces Compensation Scheme Payments
  • Armed Forces Independence Payment
  • Industrial Injuries Disablement Benefit
  • War Disablement Pension
  • War Widow's or Widower's Pension
• You (or your partner) qualify for, but do not receive Carer's Allowance
• You (or your partner) are over Pension Credit age
• You are in the 9 month grace period

The benefits that count towards the cap, while on Universal Credit are:

• Universal Credit (not childcare element)
• Child Benefit
• Maternity Allowance
• Bereavement Allowance
• Employment and Support Allowance (unless you get the support component)
• ​Incapacity Benefit
• Jobseeker’s Allowance
• Severe Disablement Allowance
• Widowed Parent’s Allowance (including widowed mother’s allowance and widow’s pension)

When the benefit cap applies all other benefits are paid at their intended rate.  The deduction applies to Universal Credit and shows on your statement.

Yes it can be, but it may need to go to a Decision Maker first which can take a number of weeks and any underpayment due to you may be sent to debt management if you have outstanding debts.

This does happen and is more likely to happen with your first payment.  It means that you have been overpaid and when Universal Credit become aware your statement will be amended and you will have an overpayment letter attached to your journal.  Your debt will be allocated to debt management who will recover it in line with the rules for deductions for debt.

To qualify you, your partner or ex-partner must have earned at or above the level of the in-work exemption threshold in each of the previous 12 months.

• 2019/2020 - £569
• 2020/2021 - £604

If you are relying on work and earnings from an ex-partner, you must have been a couple during that period of work to qualify.

If you were working and not claiming Universal Credit, the grace period starts the day after the last date of employment.

If you were working and receiving Universal Credit, the grace period starts on the first day of the assessment period in which earnings fall below the relevant threshold.

If you move into work (and off of benefits) and then back out of work (and onto benefits), you resume the remainder of the grace period.

If you split from a partner during a grace period the remainder of the grace period is applied to both of you.

The benefit cap is applied in the assessment period after the one in which the grace period ends. 

Universal Credit do not always apply the grace period when they should.  You may need to confirm to your Case Manager that you qualify.

First you need to work out your relevant Universal Credit amount.

TO WORK OUT RELEVANT UNIVERSAL CREDIT AMOUNT

You look at your full Universal Credit entitlement. This is total of all your elements,  (standard allowance, child element, housing element) with the exception of childcare element - which is ignored.

If you are unsure of your entitlement, you can use our guide - How Much Will My Payment Be?

If there are any deductions for earnings, income or capital then you deduct this amount.

You do not deduct for any advances, debts or sanctions.

This is your relevant amount of Universal Credit.

TO WORK OUT RELEVANT AMOUNT OF OTHER BENEFITS

Even although your other benefits may be paid weekly or fortnightly, etc - Universal Credit use the monthly amount.  

As an example, child benefit for 2 children is £34.40 per week.  As Universal Credit is monthly, you need to calculate the monthly figure. E.g £34.40 multiplied by 52 and divided by 12 equals £149.07

If you receive Housing Benefit paid by your local authority because you are in temporary housing or specified housing, alongside your Universal Credit then do not include your Housing Benefit in the benefit cap amount.

ADD TOGETHER YOUR RELEVANT AMOUNT OF UNIVERSAL CREDIT AND OTHER BENEFITS

If this amount is more than your benefit cap threshold then you will be benefit capped by the amount in excess.​

The Jobcentre can offer you extra support through extra work related appointments, referral for budgeting support, employment support to help you find work.  Do remember that you may be eligible for help with up to 85% of childcare costs if you start paid work.  You can ask your Work Coach about Flexible Support Fund for help with costs to remove barriers to work.

If you struggling to pay your rent you can apply to your local authority for Discretionary Housing Payment(DHP).

Universal Credit payments over the Christmas period have been causing a lot of confusion.  UC is paid on the same date each month, but if your payment date falls on a weekend or a bank holiday then you will receive it earlier.

These are the official dates, as released by DWP.  We are aware that some online articles have published incorrect dates.

Your payment will not be made to you if your statement is not showing. 

You can check your statement is showing after your assessment period has ended. 

​If there are less than 2 working days until your payment and you cannot see your statement then call Universal Credit on 08003285644.

If you claim UC then you may be eligible for a £25 payment for every week of cold weather during winter.  Find out if you qualify for this payment and when to expect it...

You can qualify for Cold Weather Payment if you have a disabled child on your claim. There is no rule regarding earnings if you have a disabled child on your claim.

You can qualify for Cold Weather Payment if you have no earnings on your claim and one of the following applies -

• You have a child under 5 on your claim
• You have been awarded limited capability to work (LCW or LCWRA) after a work capability assessment

To qualify in either of these routes, you must have no earnings on your claim whether that is your own earnings or your partner's earnings.

The scheme runs 1st November to 31st March.
The temperature in your area has to have been (or expected to be) below 0°C for at least 7 days.

If you are eligible, payment should be made automatically into your bank account. 
This is paid as a separate payment and should be made within 14 days.

Check if any payments are due in your area using the postcode checker below. 
​
If payment is due and has not been made then send a message to 'service issues' on your journal.

Our members have been awaiting the news that deductions for advances and debts were to be reduced and today, all Gov.UK pages updated to clarify that only 30% can now be deducted (previously 40%).

That could mean that UC payments go up for a lot of claimants, while debts are paid back at a slower rate. 

A single person, 25 or over, could be paying back £31.76 less per month

A couple, 25 or over could be paying back £49.89 less per month

A single person, under 25, could be paying back £25.18 less per month

A couple, under 25, could be paying back £39.52 less per month

This will apply for new claimants and existing claimants.

People on Universal Credit end up in a situation where they pay back money direct from their monthly payment because they need to take an advance during their long wait for first payment.  Many claimants have no other source, or very little income, while they wait 1 month and 7 days for first payment.  

Many claimants as well, move onto Universal Credit and HMRC recalculates old tax credit payments, as far back as 10 years+ looking for amounts that were overpaid.  Often the claimant had no prior knowledge of these amounts and it was through no fault of their own.

The new maximum amounts for repayments of advances and ordinary debts is as follows -

A single person, 25 or over, £95.35
A couple, 25 or over, £149.67
A single person, under 25, £75.53
A couple, under 25, £118.56

SO IS THIS AS GOOD AS IT SOUNDS????

At Universal Credit Essentials, we are always a little dubious when we hear rumours of things that are planned to happen, in favour of the claimant.   When reducing debts and overpayments was first suggested, they also said that advance repayments would be collected over the extended period of 16 months.  So far, no guidance or information has been changed to say that is happening.  

This looks like new claim advance amounts will be capped at an even lower amount offered, so that repayments can be collected within the 12 scheduled payments.  Unless they make further changes immediately, some new claimants will have access to much lower amounts of advance than previously.  

A new claim advance is calculated to be equal to 100% of monthly payment of UC, before deductions BUT capped at what can be collected in repayments within the time frame - 'affordability'.

Judging by the info we have been able to source today, the affordability amounts will be drastically lower.

The maximum advance any of the following groups can be offered, if their circumstances allowed will be -

Single person, under 25 - £1208.50, now £906.37
Single person, 25 or over - £1525.54, now £1144.15
Couple, under 25 - £1895.96, now £1422.72
Couple, 25 or over - £2394.67, now £1796.00
These may sound like substantial amounts, but people will only be offered these amounts, if their circumstances would allow full payment of benefit at this amount, or above, if they had no deductions.

Many families will find it very difficult to survive one month and 7 days until first payment, while expected to pay rent, electric and gas, food possibly even childcare bills.

Read more about....
NEW CLAIM ADVANCES
BUDGETING ADVANCES
DEDUCTIONS FOR ADVANCES AND DEBTS

Waiting to see your Universal Credit payment breakdown causes many people anxiety, whether it is your first payment on you have already had numerous payments.  

There is often the worry that more debts will be taken or that wages won't be picked up correctly.  

The payment section on the Universal Credit online accounts always states that your payment breakdown will be available 2 days after your assessment period ends (see example below), but really this is quite misleading as only a small percentage of payments automatically calculate.

If something needs manually actioned on your claim - like maybe something needs verified, childcare needs added,  debt deductions need sorted or for no apparent reason - your case manager needs to do calculate it before it can be uploaded onto the system.  

You won't get any notification that this has happened and it can appear at any point after your assessment period has ended.  

It is perfectly normal for the breakdown not to appear immediately. The wording on the payment breakdown screen was altered a few months ago and incorrectly builds expectation that it should appear immediately. 

Our advice is, if it is not showing 2 days before payment is due to you, do call them on 08003285644 to prompt them.

Obviously though, if you are struggling badly with anxiety, budgeting or you think there is going to be a problem then initially send a message to 'payments' prompting them and if no response then do call.  Generally when staff first arrive in the office each day, they do deal with claims that have overdue payments on them because obviously people that have not received any payment on due date to take priority.

If your payment breakdown is not showing by payment date then you will not be paid until it is showing.  Do not sit and wait for a payment if the breakdown is not showing - call them urgently.  

For those who are unsure where a payment breakdown appears, we have included a screen shot below.   If you do not have this button, then your first payment breakdown has not been calculated.

More information about....
HOW MUCH CAN BE DEDUCTED FOR DEBTS
IF YOU CANNOT MANAGE ONE PAYMENT PER MONTH