Changes to Universal Credit

Written by Jools Smith

5 April 2018

There are some changes to the Universal Credit system being introduced in April. Here is an overview of what you need to know.

Good news first

The six-week wait for Universal Credit has been cut down to five weeks from six, easing the pressure on struggling families. 

Surplus earnings

One of the changes is the ‘surplus earnings’ policy which could have a big affect on those who are in work and also claiming Universal Credit (roughly a quarter of a million people).

Could this affect you?

If you are self-employed, working part time, are on a zero-hour contract or work in seasonal employment you could see big changes to the way you need to claim.

Why?

As your earnings are likely to change from month to month, it means that if you have a good month you might earn too much to qualify for Universal Credit. Which means you will be kicked off it.

How does it work?

The amount you earned in that good month which put you over the threshold to qualify for Universal Credit will then become your ‘surplus earnings’. This could mean you will not be eligible during any bad months that follow.

For example; you have a good month in June and earn £200 over the threshold, meaning you don’t get Universal Credit. But then in July you earn £50 under the threshold. You still won’t get Universal Credit. This is because you’re still over by £150.

Your £50 will be taken off your £200 surplus. You won’t receive any further Universal credit until your surplus has fallen below the threshold.

Don’t worry too much just yet, any surplus of £2,500 or less will be ignored until April 2019.

What do you need to do?

If you have stopped receiving Universal Credit because you had a good month previously, you are required to reapply the following month. This could leave you in a situation where you are reapplying knowing you won’t get it, as you know your surplus is still too high. You still need to re-apply in order to chip away at your surplus.

How do you report your earnings if you’re working?

The Real Time Information system (RTI) allows your employer to automatically report your earnings. If your employer has access to the RTI system, ask them for their PAYE (Pay As You Earn) scheme number and phone the Universal Credit helpline on 0800 328 9344. Or contact your work coach.

Once your PAYE scheme number is recorded, the DWP should receive your earnings information each month automatically, so you won’t have to report it.

What if your employer doesn’t have access to the RTI system?

In this case, you’ll have to report your earnings yourself. Contact your work coach or the helpline by the last day of your assessment period. You will be asked for the following information;

Your PAYE reference, your gross taxable pay, your employer’s name, the date you were paid, how much tax you paid, how much National Insurance you paid and details of contributions made to a pension scheme.

Find out more

If you need to report a change of circumstance, or want more info on what a change of circumstance might be, click here.

Or call 0800 328 1744, to report your changes to the Universal Credit helpline.  

For more information on employment and earnings, click here.

If you’re self-employed and would like more information, click here.

 

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