Last week This is Money published a piece with six basic things readers needed to know about Universal Credit, as figures revealed close to a million people applied for benefits in the first fortnight after lockdown.
We were flooded with questions from readers, many of them incredibly specific.
While we can’t answer them all, we asked the charity Citizens Advice for the six most common Universal Credit questions they had been asked, and the answers to them, in the hope this will help out many of our readers with similar questions.
All the questions were answered by Carlos Hagi, benefits expert at Citizens Advice.
950,000 people applied for Universal Credit through the Department for Work and Pensions in the first fortnight after Britain went into lockdown due to coronavirus
1. I am already claiming tax credits, would I better off on Universal Credit?
If you’re already claiming benefits, such as Working Tax Credits or Housing Benefit, the amounts you get may increase if your income drops.
If you’re on Housing Benefit and your income drops, you should let your local council know as soon as possible.
If you’re on Working Tax Credits, you’ll only get more money if your income drops by more than £2,500 across the tax year, which runs from 6 April to 5 April.
If you don’t think your income will drop by that much, you should check if you would get more money on Universal Credit.
Note that if you start claiming Universal Credit, you won’t be able to claim Working Tax Credits anymore.
If your working hours have dropped due to coronavirus and you think you may no longer be entitled to Working Tax Credits, HMRC do not want you to report the drop for at least eight weeks.
After that you should contact the Tax Credits Helpline for further advice.
Anyone thinking of moving from a legacy benefit (tax credits, housing benefit, income-related ESA, income based JSA and Income Support) to Universal Credit should seek advice first to check which they would be better off claiming.
2. I have been furloughed under the Job Retention Scheme, can I also apply for Universal Credit?
The Job Retention Scheme will backdate payments to 1 March, but may not be fully rolled out until the end of April.
This could leave a gap in your income but you may be eligible to claim benefits such as Universal Credit.
It’s worth noting there is at least a five week wait for the first payment from the point your application is accepted.
Airlines such as easyJet have furloughed thousands of employees including pilots
If you can’t wait this long you are able to ask for an advance payment which will usually be made within three working days, but will have to be repaid via deductions from future Universal Credit payments.
Once you begin to receive payments from the employer via the Job Retention Scheme, you may still be eligible for Universal Credit payments.
This is because 80 per cent of your normal pay might be below minimum wage.
This isn’t against the law, because you’re not working, but you may be able to top-up your income via Universal Credit.
3. If I’m off sick with coronavirus do I claim Statutory Sick Pay or Universal Credit?
If you’re off sick due to coronavirus, you should first of all check with your employer if you’re entitled to sick pay under the terms of your contract – this is likely to be worth more than Statutory Sick Pay.
If not, you may be eligible for Statutory Sick Pay of £94.25 a week, if you meet the criteria, which includes being an employee who earns more than £118 a week.
It’s worth noting that you’re entitled to Statutory Sick Pay from day one of the illness if you’re off sick due to coronavirus.
You don’t need to provide proof to your employer in the first seven days of sickness. After seven days, you can get a ‘fit note’ online from the NHS if needed.
You may also be entitled to Universal Credit as well as Statutory Sick Pay.
This is because if you’re only getting Statutory Sick Pay, you may need more support from the benefits system, to ensure a basic level of income and pay your rent.
4. I’m self-employed, what help can I get?
The government has launched a Self-Employed Income Support Scheme, which will pay 80 per cent of your average profits, up to a maximum of £2,500 a month.
To be eligible, you need to meet criteria such as having seen a drop in profits, or have ceased trading as a result of coronavirus, and be earning less than £50,000 a year in profits on average.
Rishi Sunak’s package of assistance for the self-employed was criticised for excluding anyone with profits of over £50,000 a year
You must have filed a self assessment tax return for at least the 2018-19 tax year – if not you have until 23 April to do so.
It’s worth noting that you do not have to be trading when you apply – but you must intend to continue to trade in the 2020-21 tax year.
The rollout of this means you might not get any money until June and so in the interim you could check and see if you’re eligible for benefits such as New Style Employment and Support Allowance or Universal Credit.
5. I’m self-employed, what are the changes to the Minimum Income Floor?
If you’re self-employed and need to self-isolate due to coronavirus, you won’t be eligible for Statutory Sick Pay.
You may however be entitled to New Style Employment and Support Allowance depending on your national insurance contribution record.
You may also be eligible for Universal Credit, whether or not you are entitled to New Style Employment and Support Allowance.
If so, you can ask for the Minimum Income Floor, which is the amount you are expected to earn each month, to be reduced or removed.
There is general discretion to not apply the Minimum Income Floor at the moment and it may not apply anyway if you have little or no income from your business at the moment.
6. What if I’m struggling to pay my bills?
This is one of our busiest pages on the website as it’s a major concern for so many people.
The first thing to say, therefore, is don’t stick your head in the sand and let debts build up, there is a lot of help out there.
Firstly, contact the firm that you owe money to and see what help is available.
Many mortgage providers, for example, are allowing you to apply online for a payment holiday.
If your income has dropped, it’s also worth checking what benefits you may be eligible for, and whether you can help get help such as a reduction on your council tax bill.
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