Back Pay and UC

coconutcurls

Hi

Just received an email from my old job that I left in the summer saying that I will receive a back pay from April to July (when I changed jobs).
How will this affect my UC and should I do anything?

tacpot12

This is my understanding of the  situation. I've no great expertise and am basically just repeating information I have found on the internet:

It will depend on whether you have any work allowance, and how much the back pay is. If the back pay is more than your work allowance (taken with any other income you earned in the assessment period), then you will lose 55p in the £1 of your Universal Credit.

If the back pay is so much that you receive no Universal Credit (i.e. you lose it all due to the rule above), it will close your UC claim (according to Understanding Universal Credit - How earnings affect Universal Credit). Note that your UC Account remains open for six months, even though your claim is closed. 

You can reclaim UC after the assessment period in which you received the back pay. There will be a Reclaim tab on your journal that you can use. Telephone claimants will have to call the UC Helpline. Reclaiming within six months (i.e. while your UC account is still open) should result in your assessment period remaining the same, and you receiving your normal amount of UC for the assessment period in which you reclaim BUT if the back pay is so much that it is more than £2,500 more than the amount that would stop you receiving any UC payment in the assessment period, you have "surplus earnings" and this will stop you receiving UC the next period. So you would have to wait another assessment period before being able to claim. Your journal and/or Work Coach should tell you if you have surplus earnings. 

You don't need to do anything other than re-open your UC claim if it is closed. The DWP get notified by HMRC of the payment from your employer, so you don't need to tell them.

coconutcurls

Thank you for taking the time to research and reply to me @tacpot12 -
Such a hassle but understandable why they do this way

calcotti

At present it is very unlikely that your claim will be closed even if you have nil amount payable after just one month. 

tomtom256

Correct Calcotti, claims are staying open for around 6 months if a nil award and then get automatically closed.

coconutcurls

Thanks everyone. Will it affect only my standard allowance or my child and carer allowance too?

Spoonie_Turtle

coconutcurls said:

Thanks everyone. Will it affect only my standard allowance or my child and carer allowance too?

UC is worked out as a whole, so yes extra pay will affect it if it's a large enough sum.