More than 1.3 million people in work could be missing out on Universal Credit payments of up to £7,300 a year, according to data from the New Economics Foundation.
The number of people across the UK now eligible for the payment has skyrocketed due to a rule change announced in the Autumn Budget and implemented by the Department for Work and Pensions (DWP) at the end of November.
James Andrews, Senior Personal Finance Editor at money.co.uk, said: "In November, Rishi Sunak slashed the Universal Credit taper rate, the mechanism that sees your benefits reduced or withdrawn as your earnings rise. As a result, thousands of people who previously earned too much to be able to claim benefits now qualify for the benefit."
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He explained: "To be exact, the taper relief was changed so that rather than lose 63p of benefits for every extra pound earned, you now only lose 55p. It means you can earn hundreds more before your benefits are reduced to £0.
"On top of this, the work allowance - which is how much you can earn before the taper rate applies - has gone up by £500 a year. Under the new rules, a single parent with two children and rental bills of £750, could earn up to £52,000 a year and still qualify, compared to £44,500 previously."
The change to both rules means that people can now make more money each month without losing any of their benefits payments, and will lose less of any money they earn above the work allowance, the Daily Record reports.
James added: "With millions of people seeing their essential bills rise, the Universal Credit rule changes should not be ignored as a way of getting hold of some extra cash to help make ends meet."
There are several online benefits calculators which can help you find out if you could be entitled to extra financial support from the DWP. These are completely independent, impartial and confidential and should give you an indication of whether or not you should make a claim within a few minutes - all you need to do is answer a series of questions about your living and work circumstances.
If you are eligible, monthly payments from the DWP will vary between £344 and £596.58, depending on your circumstances - this is calculated on whether or not you have children, are part of a couple or have a disability. A single payment is paid into your bank account every two weeks.
How to claim Universal Credit
The UK Government states that a person may be able to get Universal Credit if:
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You are on a low-income or out of work
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You are 18 or over (there are some exceptions if you’re 16 to 17)
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You are under State Pension age (or your partner is)
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You and your partner have £16,000 or less in savings between you
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You live in the UK
If you live with your partner, their income and savings will be taken into account, even if they are not eligible for Universal Credit.
It is worth noting that you won't be able to get any of the means-tested benefits if your capital and savings amount to more than the upper limit of £16,000.
These include:
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Universal Credit
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Income-related Employment and Support Allowance
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Income-based Jobseeker's Allowance
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Income Support
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Housing Benefit
However, your savings and capital (or your partner’s savings, capital and income) are not taken into account when claiming ‘New Style’ Jobseeker's Allowance (JSA) and this particular benefit can be obtained at the same time as Universal Credit - or on its own.
‘New Style’ JSA is a contribution-based benefit. This means you may be able to get it if you’ve paid enough National Insurance (NI) contributions in the two full tax years before the year you’re claiming in.
It is paid fortnightly and if you qualify, you can get 'New Style' JSA for up to 182 days.
If you qualify for both ‘New Style’ JSA and Universal Credit, any ‘New Style’ JSA you receive will be taken into account as income for Universal Credit.
To make a claim for Universal Credit, visit the gov.uk website here and for more information on claiming Jobseeker's Allowance, read more here.
Universal Credit from April 2022 (monthly rates shown)
Standard allowance
Single
Single under 25: £265.31 (from £257.33)
Single 25 or over: £334.91 (from £324.84)
Couples
Joint claimants both under 25: £416.45 (from £403.93)
Joint claimants, one or both 25 or over: £525.72 (from £509.91)What happens if you have a job?
Universal credit work allowance
There is no limit to how many hours you can work while claiming Universal Credit, but only people on a low income are eligible, and this threshold depends on individual circumstances.
The amount a working person receives is dependent on how much they earn. It reduces as someone earns more - for each £1 a claimant earns in their job, their payment will reduce by 55p, with the aim being that their payments will gradually reduce until they are financially independent.
That is, unless the person is eligible for a Work Allowance, which includes those who have responsibility for a child and those whose working ability is affected by a disability or health condition. In these circumstances, they will be able to earn up to a set amount without their benefits being affected.
The set amount is £335 per month for people who already have extra help to cover housing costs, and £557 per month for people who do not. For anything they earn above that amount, the £1 to 55p rule will apply.
What documents you need to apply for Universal Credit
You will need:
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Your bank, building society or credit union account details
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An email address
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Information about your housing, for example how much rent you pay
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Details of your income, for example payslips
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Details of savings and any investments, like shares or a property that you rent out
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Details of how much you pay for childcare if you’re applying for help with childcare costs
Verifying your identity online
You will need some proof of identity for this, for example your:
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Driving licence
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Passport
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Debit or credit card
To make a claim for Universal Credit, visit the gov.uk website here
Where to find help
Turn2us
Information on income-related benefits, Tax Credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours
Policy in Practice
Information on income-related benefits, Tax Credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit, how these are calculated and how your benefits will be affected if you start work or change your working hours
entitledto
Information on income-related benefits, Tax Credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work
For more information about Universal Credit, visit the GOV.UK website here.
