Universal Credit: Warning – will final income from a previous employer affect payments?

Universal Credit may be received by anyone who is on a low income or is out of work, who is between 18 and state pension age, has less than £16,000 in savings and who lives in the UK. The amount received will depend on the individual’s circumstances but it there are minimum amounts in place which are called standard allowances.


  • Struggling with money? Non-repayable grants may be available

These standard allowances range between £251.77 and £498.89 but additional income can be added onto this through separate elements.

These elements concern different aspects of life.

So, for instance, a person may receive more income from Universal Credit if they are taking care of children or have limited capability for work.

Claimants who are working or have a certain amount in savings will have their payments evaluated more closely.

If the claimant or their partner has less than £6,000 in savings there will be no impact on their income but if they have more than this, their payments could be reduced.

If there is more than £16,000 in savings than they will not automatically qualify for Universal Credit.

Earnings from employment will also affect Universal Credit payments.

Work allowances may be in place which means that the claimant(s) could receive a certain amount from their wages without it affecting their Universal Credit. However, if this allowance is not in place than Universal Credit payments will be reduced by 63p for every £1 earned.

Claiming Universal Credit? Warning to apply for Council Tax reduction [WARNING]
Universal Credit should ‘come with a health warning’ – MPs’ new report [ANALYSIS]
Martin Lewis says check if you are entitled to THIS benefit NOW

It is likely that many people who unexpectedly lose work could turn to the Universal Credit system. If this is the case, Citizens Advice detail that they should probably take their time with the claim.

If a claimant has left a job it may be worth waiting until their final wages or any holiday pay comes through.

These final payments can easily be forgotten or have their dates mixed up which could affect the Universal Credit claim.

If the final wages or holiday pay comes through after a Universal Credit application, it will count as income and it may lower the first Universal Credit payment.


  • Universal Credit: Coronavirus-hit claimants urged to contact DWP

However, the rules are different for people who have lost their jobs due to redundancy.

Applications will not be affected by redundancy payments as they are not counted as income.

Redundancy pay will not affect how much a person gets from their first Universal Credit payment, so long as it doesn’t raise a person’s savings higher than £6,000.

Some people may find the rules around Universal Credit claims and final payments confusing but there are advisors in place who can provide impartial advice.

Documentation for final payments from previous employers should be held on to as they will likely be needed for an initial claim.

To apply for Universal Credit, claimants will need to provide a range of information.

They will need their bank, building society or credit union account details, an email address, details of their housing situation, income details which could be from payslips, information on any investments owned and details on potential childcare costs.

This information needs to be accurate and up to date as it may affect when the claimant gets paid and how much they receive.

Source: Read Full Article