Debunking Common Myths About Universal Credit That Cost You

Universal Credit serves as the most claimed benefit in the United Kingdom, with approximately 7.4 million claimants recorded as of December 2022. Despite its widespread use, estimates indicate that an additional 1.2 million households may be entitled to these benefits but do not apply for them. Research by Policy in Practice in 2023 revealed that around £7.5 billion in Universal Credit remains unclaimed, primarily due to misconceptions surrounding eligibility and the application process.

Misconceptions About Employment and Universal Credit

A prevalent myth is that Universal Credit is reserved solely for those who are completely unemployed. In reality, the benefit is designed to support individuals on low incomes as well. Claimants can still receive assistance even if they begin working or increase their hours. Although payments may decrease if earnings exceed the work allowance, which typically ranges from £411 to £684 per month depending on personal circumstances, there is no cap on the number of hours one can work while receiving Universal Credit. According to the official government guidance, “If you or your partner are working, how much Universal Credit you get will depend on how much you earn. There’s no limit to how many hours you can work and still get Universal Credit.”

Another common misunderstanding relates to savings and assets. Many believe that having savings over £16,000 disqualifies them from receiving Universal Credit. While this figure is indeed the upper limit, individuals with savings below this threshold can still see their benefits affected. The lower limit for savings is actually £6,000, and for every £250 above this amount, a deduction of £4.35 occurs. This means if a claimant has £6,400 in savings, a total of £8.70 will be deducted from their payments.

The Department for Work and Pensions (DWP) considers various forms of savings and capital in its calculations. This includes cash, savings accounts, properties not lived in, cryptoassets, inheritance payments, and even funds belonging to others held in the claimant’s name. A comprehensive list can be found on Gov.uk.

Support Available for Applicants

The application process for Universal Credit can feel daunting and complex, often leading to delays or discouragement among potential claimants. To assist with this, Citizens Advice offers a Help to Claim service, providing free support from trained advisors. This service can help individuals navigate the application process and prepare for jobcentre appointments, ensuring that all information shared is confidential.

Universal Credit can provide significant support based on individual circumstances. The minimum monthly standard allowance is £316.98, with potential for additional funds for those who are disabled, have children, or have caring responsibilities. Successfully obtaining Universal Credit can also open the door to further assistance programs, such as the Warm Home Discount, Help to Save accounts, WaterSure scheme, social tariffs, and free school meals. Each of these programs has its own eligibility criteria.

Understanding these aspects of Universal Credit is crucial for maximizing potential benefits and ensuring that those entitled do not miss out on essential financial support. By dispelling these myths and recognizing the available assistance, claimants can make informed decisions that positively impact their financial well-being.