Making Universal Credit ‘Work’

In the following blog Herbie, a Changing Realities participant, shares his experience and knowledge gained from being a benefits adviser and from receiving Universal Credit. They hope some of the tips they’ve learnt will be useful. However, please keep in mind that the system is subject to change, so check for up-to-date information at your local Jobcentre.

Last year the DWP began to increase the roll-out of Universal Credit (UC) with their “Move to UC” process. Initially this was focused on those receiving working and/or child tax credits, with the aim that they would all be moved over to UC by the end of 2024. In this blog I aim to give an adviser’s view of making UC work for those who are ill or disabled and in work.

Both tax credits and UC are there to help those in work on low pay. With tax credits there was an obvious “disability route” enabling working tax credit to be paid for those working at least 16 hours per week. But there is no such disability route under UC.

The “Move to UC” - you won’t be worse-off?

When you receive your Migration Notice, you will need to make a claim to UC within the 3-month and a day time-limit. You can ask for an extension to this (not always given), but where possible it’s best to choose a time to claim UC before the time-limit expires. Remember that when claiming UC your legacy benefits (tax credits, housing benefit for example) will end and your first UC payment will not be for 5-6 weeks later. If you get Child Benefit or PIP these will not be affected. If you get Housing Benefit you also get a 2-week “run-on” of that benefit too - this doesn’t need to be paid back. These are all factors to keep in mind when choosing the time to move to UC. There’s also a 2 week run-on of IR-ESA, IS and IB-JSA. If you are short of money you can ask for a UC Short Term Benefit Advance - but that needs to be paid back.

If your UC payment is going to be lower than what you got on tax credits on the day you claim, then the DWP will work out a Transitional Element to make sure, at least initially, that your UC will not be worse than what you were getting. There are some provisos to this so you should seek advice before claiming UC. And in the future if your UC award goes up because of an increase in any elements (for example with next April benefit rate increases) your Transitional Element will reduce.

But the idea is that you should not be worse-off when moving to UC. So if you are - ask on your journal for a breakdown of your Transitional Element. And if they refuse, complain. You should be given this information to check if their calculations were wrong.

And some good news - some people may actually be better off Moving to UC - those who rent can be awarded a housing costs element on their UC, even if they could not previously get housing benefit when on tax credits. Again - seek independent expert advice before making any decisions.

No “disability route”? Or is there?

Under the tax credits regime, if, for example you received PIP, you could claim working tax credits when working 16hrs or more per week. You could also get an increased payment if you were considered to be severely disabled.

These things do not exist under UC.

However, if you have health problems you can be considered to have limited capability to work - if you pass the DWP’s Work Capability Assessment. This requires you to submit fit notes and start what the DWP call the “health journey” through your UC journal. Eventually the DWP will send you a UC50 form to complete and probably send you for an assessment. If the DWP then consider you to have a limited capability to work, your UC can increase.

But can this be done when you are working? Aren’t fit notes for those who cannot work? According to UC regulations if someone is earning a wage the equivalent of 16hrs at National Minimum wage or over, the DWP can still do a Work Capability Assessment if the UC claimant also receives PIP.

Now its beginning to sounding a little bit like the old tax credits “disability route”. Only more difficult. Especially when, as in this adviser’s experience, the UC work coaches are not always aware of this rule and put people off going down the health route when in work.

Not everyone who got tax credits under the disability route will pass the Work Capability Assessment for UC - it is afterall a different set of activities and descriptors - but many will. And if you do pass the test it helps your UC claim even more:

-firstly those who pass the WCA can have a “work allowance” applied to their wages, whereby some of their earnings each month is ignored - £404pcm if you rent; £673pcm if you don’t. Some people will get this work allowance if they have dependent children in school on their UC claim already, but as these children drop off UC earlier than under the old tax credit system, passing the WCA may need to be put in place before this happens to keep the work allowance.

-secondly, those who pass the WCA and are given the Limited Capability for Work and Work-Related Activity element can see their UC increase by up to a further £416pcm (although this will reduce the Transitional Element you may have been getting).

Carers Who Work

Perhaps you are working and have heard that you cannot claim Carer’s Allowance for your partner or a relative who gets a disability benefit because you work. The actual rule is if you earn more than £151pw you cannot keep your Carer’s Allowance.

But under UC rules, there is no earnings limit to stop carers from claiming what is called the Carer’s Element on their UC. It is worth £198pcm, not as much as Carer’s Allowance, but getting the element will also exempt you from the Benefit Cap if it applies.

You still need to care for 35 hours per week or more for someone who is getting the right disability benefit. Unlike Carer’s Allowance it is not a “cliff edge” benefit - the Carer’s Element is added into your UC calculation no matter how many hours you work, or how much you earn.

In summary - being on low pay is not easy, nor is fathoming out the rules to UC. But knowing what you may be able to claim is half the battle sometimes. UC should be there to work for you and it can if it recognises when you, or your partner, have health limitations to work.