FAQ: How to navigate the state benefits system

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Our Head of Financial Education, Jason Butler, and state benefit expert, Deven Ghelani, the founder of Policy in Practice, hosted a one-off webinar on how to navigate the world of state benefits. A popular section of the webinar was the live Q&A - in fact we got so many questions we weren’t able to answer them all!

To make sure we’re keeping people updated and answering the questions that people have, with the help of experts at Policy in Practice, we’ve compiled this FAQ to share to hopefully put some of your worries and concerns around the current crisis at ease.

Furlough and employment

Is the furlough support payment maximum of £2.5k net or gross?

The furlough support payment is up to 80% of your typical wage, capped at 2.5k per month gross. Your employer will then deduct Income Tax, National Insurance contributions and any Student Loan repayments as normal.

When is the best time to apply for Universal Credit? Before or after I receive my last salary?

The timing of your application to Universal Credit depends on how much your final pay will be (be it your full pay or just a portion of it). You can enter your final pay amount in the Policy in Practice calculator to see whether you will still be eligible for Universal Credit if you apply now rather than wait until the end of the month.

Once you apply, there is a five week wait for your first payment. You may also be eligible for Council Tax Support, and ‘New Style’ JSA in addition to Universal Credit. The calculator can direct you to what other help you may be eligible for.

In what circumstances will people claim the new-style Job Seeker’s Allowance (‘JSA’) & Employment Support Allowance (‘ESA’)?

People can claim ‘New Style’ JSA/ESA under many different circumstances.

These are contributory benefits, so you can receive them irrespective of your partner’s income, or your savings, for example. You can receive these in addition to other benefits, like Universal Credit.

JSA is for those who are unemployed or who work less than 16 hours a week, and have paid sufficient National Insurance contributions in the two full tax years before the year they claim in.

ESA is for those who have health conditions or disabilities that limit their ability to work.

You can find more information on the government pages linked below: Jobseeker’s Allowance (JSA): https://www.gov.uk/guidance/new-style-jobseekers-allowance Employment and Support Allowance (ESA): https://www.gov.uk/guidance/new-style-employment-and-support-allowance

If I’ve been on long term sick leave and my SSP has stopped and I have no other income coming in. Am I eligible for anything?

If you are not well enough to return to work, you might be able to apply for New Style Employment and Support Allowance (ESA). The government page with further information about eligibility and how to apply can be found here: https://www.gov.uk/employment-support-allowance/how-to-claim

You might also be eligible for other support, such as Universal Credit and Council Tax Support. Our calculator is a useful tool to direct to you what help you may be eligible for: https://www.betteroffcalculator.co.uk/free


I have savings that I've earmarked for a house deposit. Does that count?

To claim Universal Credit you must report the total value of all savings and other types of capital that you and/or you rpartner have. This unfortunately includes money you are saving to pay for something. The only exception is money earmarked for tax.

You may otherwise be eligible for ‘New Style’ JSA or ESA depending on your situation, as these benefits do not take into account your savings and income.

I’ve heard that some local authorities are offering people a ‘council tax’ holiday instead of a reduction. Is this true?

Council Tax Support and discretionary support during the Coronavirus crisis can vary widely between different councils. Some councils are able to be more generous than others and have unique schemes in place.

The government has provided local authorities with additional funding in light of the nationwide shutdown. Councils are supposed to use this funding to reduce the amount of council tax people already receiving council tax support have to pay for the 2020-2021 financial year by £150/year.

Households not receiving any council tax support will not be affected by this reduction. If you are already receiving council tax support, you may see your bills reduce further. Visit Advice Local to find out what financial and other support is available to you locally: https://advicelocal.uk/

I have a mortgage on a buy to let property, will that affect what I can get?

Unfortunately, because you don’t live in the property it will be considered savings/capital, which you can calculate as follows:

You should take the current market value (‘surrender value’) of the property, and reduce the amount by 10% if there would be a cost involved in selling it. This is because the value of capital taken into account in the means test is reduced by 10% to cover any expenses involved in selling.

You should then deduct from the remaining amount any debts secured on the property, such as your mortgage. The amount left is your capital to be taken into account when calculating your means-tested benefits.

If this amount exceeds £16,000, you may not be eligible for Universal Credit.

If you are unsure, reach out to your Citizen’s Advice Bureau as this can be a complex situation or speak to an independent financial adviser. You can find your local Citizen’s Advice Bureau here: https://www.citizensadvice.org.uk/benefits/coronavirus-check-what-benefits-you-can-get/


I live with my partner and we share all the house bills equally. Should I apply to the universal credit as a single person or couple?

If you live with your partner, unfortunately you will be considered as a couple when applying for Universal Credit and their income and savings will be considered with yours.

My partner has savings / still has a job, will that affect what I can get?

If you live with your partner, their income and savings will be considered alongside yours for most ‘means-tested’ benefits, including Universal Credit and council tax support. However, If you meet the eligibility criteria, you can apply for ‘New Style’ JSA/ESA - these benefits do not take your partner’s income or savings into account.

If my partner is of pension age and we have a reduced income, what are we entitled to?

Because your partner is of pension age, you may be better off entering your details into the free benefits calculator to see exactly how much support, and what kind, you may be eligible for or currently missing out on.

We already receive Working Family but our household income has fallen due to COVID-19. Would we be better off claiming Universal Credit?

First of all, it is important to note that if you’re already getting a legacy benefit like tax credits, and you make an application for Universal Credit, your tax credits will stop and you won’t be able to go back.

The benefits calculator is a useful tool to compare whether you will be better off on Universal Credit or legacy benefits

For households receiving Working Tax Credit, it's essential to seek personal advice before claiming, the decision of whether or not to move onto Universal Credit will depend on their individual circumstances:

• Their level of savings: They cannot apply for Universal Credit if they have more than £16,000 in savings.

• Whether or not they would be better off in the long run: This is especially relevant if they are self employed and if the re-introduction of the minimum income floor would affect them once the exemption from the MIF is lifted.

• The impact of the 5-week wait for Universal Credit: The five week long assessment period where claimant don’t receive support could be a greater shock to their finances than lower ongoing support with existing legacy benefits.

• If you are unsure whether or not you’ll be better off, we’d recommend you get some expert benefits advice from your council or local Citizens Advice.

• During the Coronavirus crisis, the government has introduced measures to allow households seeing a drop in hours to remain in receipt of tax credits to be ignored until the Job Retention Scheme and the Self-Employment Income Support Scheme close, even if the claimant isn’t using either scheme. For example, if your hours drop from 40 hours to 15 hours, this would usually affect your tax credits, but at the moment this change is being ignored.

• If claimants stay on legacy Tax Credits, then they need to inform HMRC of their revised 2020/21 income, which may be much lower than previously so that their tax credits can take this drop into account.


Can my entitlement for benefits be back paid? You should claim benefits as soon as possible. Backdating is not always easy, and is different for different benefits. You can see the full list of benefits you may be eligible for by using the free benefits calculator: https://betteroffcalculator.co.uk/free

Universal Credit: You can apply to get Universal Credit to cover up to 1 month before you started your claim, but you will need a good reason for not claiming earlier, such as an illness, disability, or a divorce or separation. This is a useful resource from Citizen’s Advice: https://www. citizensadvice.org.uk/benefits/universal-credit/before-you- apply/how-universal-credit-is-paid/

‘New Style’ JSA/ESA: If you have lost your job and fit the eligibility criteria you can potentially apply for JSA and have it backdated up to 3 months prior, but it is not easy to get it backdated. You will need good reasons for not having applied earlier, and you will need to prove that you have been looking for a job and available to work from the day you want your JSA to start. This is a useful resource from Citizen’s Advice (scroll to ‘Backdating JSA if you couldn’t apply earlier’): https://www.citizensadvice.org. uk/benefits/universal-credit/before-you-apply/howuniversal- credit-is-paid/

Council Tax Support: This is managed differently between each council, but we suggest you see your eligibility and apply as soon as possible. Some councils do not allow for backdating.

I’m an EU citizen, am I eligible?

Firstly, the Job Retention Scheme and the Self Employed Income Support Scheme are available to anyone regardless of nationality. However means-tested benefits are a different situation. If you do have settled status, you have full right to reside, so you don’t need to evidence your right to reside under any other status to be entitled for benefits.

If you do not have settled status: To claim most UK benefits, you need to prove that a) you have the ‘right to reside’ in the UK, b) the UK is your main home and you plan to stay – this is known as being ‘habitually resident’, c) you meet the other criteria for the benefit you’re claiming – for example that you earn less than a certain amount. It is really important if you do not have settled status that you get advice from a specialist in benefits for non-UK citizens. Citizens Advice may be able to help you, however they are extremely busy at the moment.

Your local council may also be able to put you in touch with a support centre in your area. This is a useful resource from Citizen’s Advice: https://www.citizensadvice.org.uk/benefits/claiming-benefits-if-youre-from-the-EU/before-you-apply/check-if-you-can-get-benefits-if-youre-from-the-eu/

Can I use the calculator to do calculations for someone else?

You can absolutely use the calculator to help others understand their eligibility for benefits and support, as long as you know their household information.

Policy in Practice licenses its calculator to Citizens Advice Bureaus, local authorities, housing associations and utility companies for just this purpose.

Important: This is an option, not a recommendation. Your employer does not benefit from offering this. This content is for guidance and educational purposes only and is generic in nature. Salary Finance Limited trading as Neyber does not offer either regulated financial advice or personal advice on state benefits. Please seek independent financial advice or free money guidance if you require help with your own situation.