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Businesses and individuals in the UK have been adversely affected and are currently going through a rough patch due to the coronavirus outbreak. The UK government has announced various schemes for employers as well as employees in order to provide them financial support in this difficult time of COVID-19. Despite of providing several support packages like self-employed income support scheme and job retention scheme, there are still thousands of people who cannot avail these benefits. However, they may be eligible for universal credit.

Who can claim Universal Credit during Coronavirus pandemic?
In this article we cover:

What is Universal credit?

Universal credit is a payment made directly to the claimant’s bank account to help them in meeting their basic living costs. It is either paid monthly or twice in a month in Scotland for some people.

It doesn’t matter that whether you are working as a self-employed person, working as an employee, on furlough or faced a reduction in your income – you may still be eligible to apply for universal credit. In case you are already getting other benefits, it will get replaced by the universal credit. Other benefits include –

  1. Income support
  2. Child tax credit
  3. Housing benefit
  4. Income related employment and support allowance (ESA)
  5. Income based job seeker’s allowance (JSA)
  6. Working tax credit

In case you are getting any of the above benefits and applied for universal credit too, universal credit will stop your existing payments and you will not be able to claim those benefits in coming future. Universal credit replaces those benefits. If you are already getting any of the above mentioned benefits, you don’t have to do anything unless –

  1. You get contacted by department for work & pensions (DWP) about moving to universal credit.
  2. There is a change in your circumstances, and you want to report.

Also See: Coronavirus bounce back loan scheme for small businesses

Who can claim universal credit?

To be eligible for universal credit, you need to meet the following eligibility criteria –

  1. You are living in the UK.
  2. You are 18 or above years of age (Age of 16 or 17 also considered in case of some exceptions).
  3. You or your partner come under state pension age.
  4. You are out of work or having a low income.
  5. You and your partner have less than £16,000 of savings

Also See: Apply For the Coronavirus Large Business Interruption Loan Scheme

How much amount of universal credit can you receive?

Universal credit payment comprises of standard allowance and extra costs that are applicable to you. For example –

  1. If you have children.
  2. If you are having a disability or health condition.
  3. If you need help in paying your rent (Housing cost).

The universal credit you will receive depends upon your circumstances that are accessed every month on the basis of which standard monthly allowance is given to the applicant. Amount of monthly standard allowance is mentioned in the table below –

Your circumstances Monthly standard allowance
Single and under 25 £342.72
Single and 25 years or above £409.89
You and your partner both are under 25 £488.59
Either of you are 25 and above £594.04

Also See: COVID-19 Mortgage Payment Holiday

What are the extra help offers under universal credit?

You can become eligible for extra money over & above your standard allowance in the following cases –

If you are having children

  1. If you are having 1 or 2 children, you are eligible to claim extra amount for each of your child.
  2. If you are having 3 or more children, you are eligible to claim extra amount for at least 2 children.
  3. You may also be eligible to claim amount for more children, only if any of the following conditions are true –
    1. If your children were born before 6th April 2017.
    2. If you have already claimed the money before 6th April 2017 for 3 or more children.
    3. Other exceptions may apply.

Note – You are eligible to claim extra amount in case any of your child is disabled or severely disabled – conditions of how many children you are having or when they were born doesn’t apply in such cases.

Number of children’s Extra monthly amount
For first child £281.25 (If born before 6th April 2017) £235.83 (If born on or after 6th April 2017)
For second child and any other eligible children £235.83 per child
If any of your child is disabled or severely disabled £128.25 (Disabled person) £400.29 (Severely disabled person)
In case you need any help with child care costs You are eligible to claim up to 85% of the costs (up to £646.35 for one child and £1108.04 for 2 or more children’s)

Note – In case you start caring for another child, you may get eligible for extra amount depending upon the number of children’s you are having and when they were born.

If you are having a disability or health condition

Conditions Extra monthly amount
In case you are having limited capability for work and work related activity £341.92
In case you are having limited capability for work and started claiming for health related universal credit or employment and support allowance before 3rd April 2017 £128.25

In case of severely disabled person

Condition Extra monthly amount
Receives disability related benefit in case you are providing care for at least 35 hours weekly to a severely disabled person £162.92

If you need help in paying your rent (Housing cost)

Working out the amount you receive for paying your rent or housing costs depends upon your age and circumstances. Housing payment includes rent and some service charges. In case you are a homeowner, you may be able to apply for a loan to get help with interest payments on your mortgage or any other loan taken for home purpose.

Also See: What Expenses to Claim For When Working From Home In the Time of Coronavirus

When will you get payment of universal credit?

Payment of universal credit is done on a monthly basis in England, Scotland and Wales. However, in Scotland, instead of receiving monthly payments, you can even ask for fortnightly payments. In Northern Ireland, the default payment is fortnightly but you can choose the option of getting monthly payments.

What is counted as income under universal credit?

Following payments are counted as income under universal credit, which may affect your eligibility to claim –

  1. Salary

    - Salary is the money you earn for the work you have done for your company. For every £1 you are earning monthly, your entitlement to universal credit will go down by 63p. However, special allowances are also given to some people.
  2. Savings

    - If you’re household savings are £16,000 and above, you will not be eligible to claim universal credit. Your universal credit will reduce, if the combined savings of you and your partner exceeds £6,000.
  3. Pension

    - In case you are receiving money from private pension and comes under state pension age, your entitlement for universal credit reduces by £1 for every £1 you receive.
  4. Other benefits

    - Several benefits are taken into account at the time of calculating entitlement and same are treated as unearned income. Unearned income is the income that you didn’t earn from your work and deducted from your maximum award. Unearned incomes that are not liable for deduction from universal credit payment includes –
    1. Child benefit
    2. Disability living allowance
    3. Maintenance payments
    4. Personal independence payment
    5. Income from boarders & lodgers

    Unearned incomes that are liable for deduction from universal credit payment includes –

    1. Pension scheme
    2. New style employment & support allowance (ESA)
    3. New style jobseeker’s allowance (JSA)
    4. Few benefits not replaced by universal credit

Also See: COVID-19: Making Research and Development tax relief claims

If there is a change in circumstances, whether the amount of universal credit revises or not?

In case of change in circumstances, you must be clear about the following facts –

  1. When your income increases, there is a reduction in your payment.
  2. Your payment will continue to decline until you are earning enough income.
  3. In case your earning drops again, you are eligible to claim universal credit.
  4. In order to claim universal credit, not only your income but your partner’s income is also considered. It means you will receive universal credit based on your household income.

Also See: Apply For The Coronavirus Future Fund

How to apply for Universal credit?

In order to claim universal credit, you can apply in following ways –

  1. Apply for universal credit online

    - You are eligible to claim universal credit online if you and your partner are living together. It is not compulsory for you to be married. When you receive your application from the universal credit team, there might be a possibility that they will call you for more information or when they are unable to verify your identity online.
  2. Universal credit helpline

    - The other way to claim universal credit is by contacting universal credit team helpline. If you are not in a position to use online services to claim universal credit or come under disabled category, you can call the helpline number and claim your universal credit.

    Universal credit helpline

    Telephone: 0800 3285644

    Welsh Language: 0800 328 1744

    If you can’t hear or speak: 18001 then 0800 328 5644 over phone

    Text phone: 0800 328 1344

    Monday to Friday:(8AM – 6PM)

  3. British sign language video relay service

    - you can also use British sign language video relay service in order to make claim for universal credit. You can use this service between Monday to Friday (8AM – 4PM)

For more information on Universal Credit visit Gov.uk.

In case you want more information on claiming Universal credit, kindly call us on 03330886686 or you can also e-mail us on info@dnsaccountants.co.uk.

Also See: SEIS and EIS Investment Scheme for UK Startups

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