Universal Credit and Surplus Earnings

Under_the_Radar_2

Can anyone confirm how Surplus Earnings work in relation to monthly payments. Because of the grant, lets say for example I am currently on £0 income. The SEISS grant pays me £7,500 but then I am back on £0 earnings for the forseeable future. The Surplus Earnings threshold is £2,500? So how long would it be before I was back to normal UC benefits given those circumstances? 

poppy12345

It means that anything over £2,500 will affect your UC the following months and will likely reduce your UC to zero. More info here.

https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/universal-credit-and-work/

Under_the_Radar_2

poppy12345 said:

It means that anything over £2,500 will affect your UC the following months and will likely reduce your UC to zero. More info here.

https://www.understandinguniversalcredit.gov.uk/new-to-universal-credit/universal-credit-and-work/

Yeah I get that, what I can't wrap my head around is for how long. Say I get £7,500 one month, then £0 for the next 3 months, how long do they reduce your payments because of that one month? Do they simply subtract your usual UC payment each month until that amount is below £2,500?, so if I usually get £500 / month, I wouldn't get anything for 10 months?

calcotti

Not quite as simply as that. You need to work out what level of earnings would result in nil entitlement to UC (the nil UC threshold). This number will depend on your maximum UC entitlement and how it is calculated. You receive £7500. Month 1 you get no UC. For month 2 take the £7500, deduct the nil UC threshold, then deduct a further £2500. The balance is treated as earnings in this second month and UC calculated in the normal way. For month 3 take the earnings figure used in month 2 as the starting point and repeat the calculation.
Full explanation here https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/surplus-earnings-and-losses/

if DWP close your claim following a nil month you should immediately make a rapid reclaim through your UC journal.

Under_the_Radar_2

Thank you both for the time and links, still struggling to work it out, but that's down to me not being sure how to calculate various factors on my personal claim, but if I sit down for a bit I'll hopefully get my head around the maths. Thanks. It's no big deal really, I was trying to work out where I stand after receiving the SEISS grant really, but I will wait for the next UC assessment period at the end of the month and then claim the grant, and after that what will be will be I guess. 

calcotti

For the sake of argument. Say your maximum UC entitlement is 1000/month and you have no work allowance. Your nil UC threshold is then £1,000 / 0.63 = £1,587.30.
You receive £7,500. 
Month 1 - no UC is payable. 
Month 2 (assuming no other income) - earnings taken into account £7,500 - £1,587.30 - £2,500 = £3,412.70. No UC payable.
Month 3 - £3,412.70 - £1,587.30 - £2,500 is less than zero so there are no earnings to take into account. UC payable is the maximum amount of £1,000.
Note that any business expenses you incur will be taken into account as a deduction form the earnings used.

Under_the_Radar_2

calcotti said:

For the sake of argument. Say your maximum UC entitlement is 1000/month and you have no work allowance. Your nil UC threshold is then £1,000 / 0.63 = £1,587.30.
You receive £7,500. 
Month 1 - no UC is payable. 
Month 2 (assuming no other income) - earnings taken into account £7,500 - £1,587.30 - £2,500 = £3,412.70. No UC payable.
Month 3 - £3,412.70 - £1,587.30 - £2,500 is less than zero so there are no earnings to take into account. UC payable is the maximum amount of £1,000.
Note that any business expenses you incur will be taken into account as a deduction form the earnings used.

Thanks, that example really helped me out. 

I've also noticed on the money saving entitled to calculator it gives you an indication of both what uc you should get and how the seiss grant interacts with that, just putting on here in-case anyone else is wondering looking for answers on here.