Martin Lewis regularly provides advice on savings products but he is also known to tackle various state benefit problems such as those found in Universal Credit claims. Today, he was questioned on a fairly complex problem which had a surprisingly simple answer.

Alison rang in and detailed her daughter had been made redundant and has a “big mortgage to pay”.

Her daughter took a mortgage holiday and is planning to claim Universal Credit in January.

Alison explained she had savings ready and is prepared to make payments and she asked Martin if the “departments for social security” would have to be informed that she was helping her daughter out.

This is evidently a complicated situation but fortunately, Martin provided clear guidance on how this support will need to be factored in.

He explained she will need to report this support and he broke down how this will work in practice: “If you have other forms of income and you’re claiming Universal Credit, you should put that in your Universal Credit logbook entry.

READ MORE: Universal Credit: Claims may be affected by lump sum back payments

Currently, Universal Credit can be applied for by anyone on a low income or out of work who is aged between 18 and state pension age.

However, if a claimant has between £6,000 and £16,000 in savings, which can be split among partners, their payments will be gradually reduced.

If this is the case, the first £6,000 is ignored and the remainder is treated as if it gives the claimant a monthly income of £4.35 for each £250, or part of £250.

So, as an example, if a claimant has £7,000 in savings the first £6,000 will be ignored and the remaining £1,000 is counted as giving them a monthly income of £17.40.

There is no limit placed on how many hours a claimant can work.

The overall Universal Credit system was designed to encourage claimants to get into work so long as they are able to.

Eventually, the Universal Credit payments will stop entirely when a claimant earns a certain amount.

On top of the monetary elements Martin Lewis identified, claimants will also need to keep the government updated with any changes on the following circumstances:

  • finding or finishing a job
  • having a child
  • moving in with a partner
  • starting to care for a child or disabled person
  • moving to a new address
  • changing bank details
  • rent going up or down
  • changes to health conditions
  • becoming too ill to work or meet a work coach



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