Not eligible for furlough? What support is there if you can’t get Universal Credit either?
Universal Credit is a payment which is intended to help people who are on a low income or who are out of work. Figures show that 950,000 people have applied for Universal Credit in the past two weeks during the coronavirus crisis – up from around 100,000 in a normal two-week period.
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The DWP said that around 10,000 existing staff members will be moved to process new claims.
During the coronavirus crisis, the government has announced a number of emergency measures for those adversely affected financially by the outbreak.
This includes the possibility for being placed on furlough leave under the Coronavirus Job Retention Scheme – on which eligible furloughed employees can get 80 percent of wages up to £2,500 per month.
However, an employee has told Express.co.uk about how she was not able to get furlough leave from her employer due to having begun a new job in March – thus was not on the payroll on February 28, as required under the scheme.
Her previous employer has said it will not be reinstating her in order to put her on furlough leave, and as the new employer is unable to do this, the company had to let her go.
The coronavirus (COVID-19) Self-employment Income Support Scheme was also announced in March.
Under this scheme, eligible self-employed individuals or members of a partnership can claim a taxable grant worth 80 percent of their trading profits up to a maximum of £2,500 per month for the next three months.
Following the announcement of this scheme, Chancellor of the Exchequer Rishi Sunak confirmed that the grants would not be available until June.
Government guidance states: “The government is also providing the following additional help for the self-employed:
- Deferral of Self Assessment income tax payments due in July 2020 and VAT payments due from 20 March 2020 until 30 June 2020
- Grants for businesses that pay little or no business rates
- Increased amounts of Universal Credit
- Business Interruption Loan Scheme.”
Those who are looking to put in a claim for Universal Credit or Employment and Support Allowance are directed to do so by applying online.
The benefit system is replacing six legacy benefits, which are: Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA), and Working Tax Credit .
The payment is made up of a standard allowance, and it may be that claimants are able to get additional amounts due to their circumstances – such as having children.
So, what are the rules surrounding Universal Credit eligibility?
Universal Credit eligibility
The government explains that a person may be able to get Universal Credit if:
- They’re on a low income or out of work
- They’re 18 or over (there are some exceptions if they’re 16 to 17)
- They’re under state pension age (or their partner is)
- They and their partner have £16,000 or less in savings between them
- They live in the UK.
Gov.uk states: “Use a benefits calculator to check what benefits you could get if you’re not eligible for Universal Credit.”
So, how do savings affect Universal Credit?
The charity Turn2us explains: “Any capital/savings you have under £6,000 is ignored.
“Any capital/savings you have between £6,000 and £16,000 is treated as if it gives you a monthly income of £4.35 for each £250, or part of £250, regardless of whether it does or not.
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“So if you have £6,300 in a savings account, £6,000 of it will be ignored and the other £300 will be treated as giving you a monthly income of £8.70.
“If you have capital/ savings over £16,000 as a single claimant or as a couple you will not be entitled to Universal Credit. Some capital can be ignored when working out if you are entitled to Universal Credit.”
The Resolution Foundation yesterday urged the government to make a number of changes to Universal Credit, as it warned of an unemployment crisis in the UK.
Among the measures the think-tank suggested was a call to extend Universal Credit to more middle-income households.
The think-tank said the government should scrap the ‘capital rules tests’ that reduce support for those with savings over £6,000 and “disentitle” those with savings over £16,000.
The Resolution Foundation notes that for a couple with children who have saved a £16,000 desposit for their first home but who have now lost a job would therefore be ‘disentitled’ to £1,400 of support a month, adding that it could up to half their deposit over six months of unemployment.
The Department for Work and Pensions (DWP) has confirmed to Express.co.uk that Universal Credit is means-tested, and that it “assumes that people with significantly above average levels of savings will draw down this support before receiving government help”.
So, what other forms of financial support is available for those not eligible for Universal Credit?
The DWP has highlighted options for those affected by the crisis include the Coronavirus Job Retention Scheme, Self-employment Income Support Scheme, Statutory Sick Pay, and mortgage holidays.
Liam Evans, Campaigns Officer at Turn2us, said: “Usually if you have more than £16,000 in savings you cannot claim Universal Credit. However, these people may be eligible to apply for New-Style ESA instead.
“We’d urge anyone confused about what they are entitled to to use our Benefits Calculator to find out and then make a claim as quick as possible.
An HM Treasury Spokesman said: “Our Coronavirus Job Retention Scheme is protecting thousands of jobs up and down the UK – with the Government covering 80 percent of the salary of furloughed workers.
“Firms can reemploy staff made redundant after 1 March and those who do not qualify will be able to access a range of other support – including an increase in the Universal Credit allowance, income tax deferrals, £1 billion more support for renters and access to three-month mortgage holidays.”
It’s understood that the February 28 date is used as it is the last full set of PAYE data that HMRC can use as the reference for the claims.
Express.co.uk understands that the Coronavirus Job Retention Scheme is aimed at those who would otherwise be unemployed as a result of coronavirus, and that the scheme allows those who were on payroll on February 28, but subsequently left, to be put back on payroll and furloughed.
Earlier this week, Money Saving Expert founder Martin Lewis tweeted: “CONFIRMED: If u left a job after 28 Feb, that old employer can rehire you to furlough u. So if needed ask.
“We knew this worked for those made redundant, but Treasury’s just confirmed to us, this is allowed for those who left voluntarily (eg for a new job). Tell those affected.”
Have you been affected financially by the coronavirus crisis? If you’re interested in sharing your story, please get in touch by emailing [email protected]
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