IF you’re one of the thousands of furloughed workers you may have experienced a sudden drop in income.
You may be able to apply for extra help in the form of Universal Credit – but how much will you get?
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Our welfare expert Nichola Salvato is on hand to help answer your questions about the new benefits system.
On furlough you get 80 per cent of your wages paid – up to a maximum of £2,500 a month.
It applies to workers who were on a payroll on February 28, and your employer can choose to top up your pay to the full 100 per cent.
But what does this mean for Universal Credit claimants?
Nichola, who has four years experience in welfare rights, answers a question from one worried reader.
Do you have a question? Email [email protected]
Me and my wife have both been furloughed on 80 per cent wage, we have made a claim for Universal Credit.
We have two teenagers and we live in a council property.
Can you tell us how much we will get and what is our maximum take home pay from furlough that we are allowed before UC stops? Mr N via Twitter
Dear Mr N,
Well done for being on top of things and rightly, making a claim for Universal Credit to help you through this difficult period with a reduced wage.
As you are new to Universal Credit, how it all works can take some getting your head around.
Unlike some of the legacy benefits, with Universal Credit there is no fixed earnings cut off point.
How much you are entitled to and how much you can earn will always depend on your family’s specific circumstances.
To work out how much you can get, the starting point should always be figuring out what your maximum Universal Credit award would be for your family if you had no other income.
As of April 6, some of the UC elements have increased, partly because of Covid 19 and also due to a planned annual increase.
The current rates per month are as follows:
- Single under 25: £342.72
- Single 25 and over: £409.89
- Couple both under 25: £488.59
- Couple at least one 25 or over: £594.04
- First child born before 6 April 2017: £281.25
- First child born on or after 6th April 2017: £235.83
- Second child born anytime and any third or subsequent child born before April 6 2017: £235.83
- If your child has a disability £128.25 or £400.29 (depending on the disability)
- You can claim up to 85 per cent of childcare costs back up to a maximum of £646.35 for one child and £1,108.04 for two or more children.
- The Local Housing Allowance for your family size in your area if you are in private rented accommodation or the entire amount of your monthly rent less any deductions such as a spare room subsidy.
- If you have been put in the limited capability for work related activity group: £341.92
- If you were put in the limited capability for work group prior to April 3 2017: £128.25
- If you are a carer: £162.92
You must add all the elements that are relevant to you and your family, the figure you come out with will be your maximum Universal Credit Award.
By way of example, if you are a couple over 25 you would get £594.04 standard allowance, plus £281.85 for your first born and £235.83 for your second.
If you rented your home from a housing association for £500 per month and have no spare rooms, you would get that too.
So your total maximum UC award would be £1611.72.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
- Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
- Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
- Budgeting Advance – You may be able to get help from the Government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
- Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your existing ones aren't enough to cover your rent.
- Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
Now you have to consider any deduction that might apply for your family.
The deductions could be for earnings, savings or other types of income including some kinds of benefits.
The rules are quite long winded so I will just deal with earned income here.
Your Universal Credit payment will be reduced by 63p for every £1 that you earn (known as the taper rate) over the work allowance.
The work allowance varies based on how many people live in your household and whether you get help with housing costs.
For you, it would be either £512 or £292.
This means anything you earn over this would be subject to the taper rate.
The Sun has been campaigning to increase the work allowance and cut the taper rate as part of our Make Universal Credit Work campaign.
To work out your final payment you need to add up all the elements that would be relevant to you minus the taper rate.
I know that when all this is new to you it can seem very complicated and feel overwhelming at first glance.
If you take it slowly and look at the calculations bit by bit, you really will be able to get your head around it.
I’d also recommend using a calculator, on websites like EntitledTo or Citizens Advice.
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As of earlier this month, Universal Credit claimants no longer need to call to start their claims.
And last week, Universal Credit was tweaked to make it easier for self-employed to get cash quicker.
Mr Money shares his easy six-step guide to claiming Universal Credit.
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