Eligible individuals might be forfeiting up to £628 in Universal Credit payments due to common misconceptions surrounding this benefit system.
Universal Credit Eligibility: Debunking Common Misconceptions
Universal Credit (UC), a government support system designed to help those on a low income or out of work, has some common misconceptions surrounding its eligibility criteria. Contrary to popular belief, UC is not exclusive to the unemployed, and having savings does not automatically disqualify you from receiving it.
If you have previously been unable to claim UC due to a compensation payout, you now have the opportunity to reapply, as payments received through the miscarriage of justice compensation scheme will no longer count as income when determining eligibility for support such as Housing Benefit and Universal Credit.
Regarding savings, UC rules state that if you have savings or capital of more than £6,000, your UC payment will be reduced. However, if your savings exceed £16,000, you are generally not eligible for Universal Credit. Savings between £6,000 and £16,000 reduce your UC gradually, as they are treated as generating a notional income that reduces your entitlement.
Single individuals under 25 can receive up to £316.98 a month, while those aged 25 or above can receive up to £400.14 a month. When one or both partners are aged over 25, the payment rises to £628.10 a month. Couples both under 26 can receive £497.55 a month.
It's essential to note that UC can be claimed even if employed, but the payment reduces as earnings increase (55p reduction for every £1 earned). If you have up to £411 a month in earnings before the UC payment starts to reduce if you receive housing benefit or the housing element of Universal Credit.
To help determine your eligibility and estimate the amount you could receive, various tools and calculators are available. MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data. Entitledto's free calculator determines whether you qualify for various benefits, tax credit, and Universal Credit. Policy in Practice's calculator helps determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs. Charity Turn2Us' benefits calculator works out what you could get.
As of June 2025, over 7.9 million people claimed Universal Credit, highlighting its importance as a safety net for many individuals and families. If you're unsure about your eligibility or want to check that you're not missing out on money you're entitled to, using a benefits calculator can provide valuable insights.
[1] Source: Department for Work and Pensions (DWP)
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