UC advice 20 January at 5:14PM in Benefits & tax credits 8 replies 433 views

trfc20222

Hi all,

Looking for some advice

I am employed full time and receive approx £600 in UC each month on top

I have been offered some one off freelance work that would cover 4 months but would be £3500 upfront

Obviously I would declare it but I wanted to check how it works, I would obviously get a deduction for a set number of weeks and then would it just kick back in? Or would it stop me altogether and then I would have to reapply

Just trying to work out if it is worth me doing it or not really

Thanks in advance for any help

kaMelo

What reasons makes you think it would not be worth doing?
UC is calculated on earnings received within an assessment period, assuming you receive the money as a lump sum it would almost certainly mean nil UC in the assessment period you received it. Over £2500 would be subject to the surplus earnings rules so would affect the following month too. 

https://www.entitledto.co.uk/help/Universal_Credit_Surplus_Earnings

huckster

Also be careful with declaring any capital savings and investments you have. If the £3500 increases savings available to you to £6000 or more, you would need to report this on your claim. If savings exceed £16000, you would no longer be entitled to claim UC.

calcotti

The money will be taken into account when it is received.
Assuming you do not have children and do not have Limited Capability for Work the earnings deduction is £3,500 x 55% = £1,925. Therefore no UC would be payable in the period you receive the payment. Your claim should stay open but if it is closed you would be able to do a rapid reclaim through your UC journal.
After the month after you received it the money will count as capital and if that takes you over £6,000 you would have to report this and would reduce the UC payable.

trfc20222

Thanks all, it is really helpful

I think what I was worried about was doing a job for £3500 and then it kicking me off altogether and having to go through the process from the beginning!

calcotti

Looking at the numbers.
If your UC is £600. The amount of income that would reduce your UC to nil would be £1,090.91.
The earnings received are £3,500. The UC is reduced to nil. The carried forward amount of surplus earnings is £2,409.09. If there are no earnings the following month the surplus earnings disregard means that there is no impact on the UC and you would get your normal £600.

(EDIT - looking back at this I realise that I have not taken into account your other earnings so the impact may be different to what I suggested above.)

tifo

If you have no work allowance then the deduction is the same whether you take it one off £3,500 or 4 months at £875.

tifo

calcotti said:

Looking at the numbers.
If your UC is £600. The amount of income that would reduce your UC to nil would be £1,090.91.
The earnings received are £3,500. The UC is reduced to nil. The carried forward amount of surplus earnings is £2,409.09. If there are no earnings the following month the surplus earnings disregard means that there is no impact on the UC and you would get your normal £600.

Just to note that any surplus earnings over the amount you get £0 UC will be put forward as earnings in the next month, from what I understand from the link above. So if you earn £3,590.91 (£2,500 + £1,090.91) you will get £0 UC and nothing is carried over. But if you earn, say, £4,000 then £409.09 would be carried (£4,000 - £3,590.91) over to the next month as income. If you earn over £2,500 it'll get carried over again.

I may be wrong but that's what i gather from the link.

calcotti

tifo said:

If you have no work allowance then the deduction is the same whether you take it one off £3,500 or 4 months at £875.

That isn’t necessarily correct.

If 4 payments of £875 are made there will be a deduction from UC on every one of those 4 months. The total UC reduction over those 4 months is£ £1,925.

If the whole amount his paid in one month there will be no UC payable in that month. The surplus earnings disregard could mean that no further months will be affected. Therefore the UC deduction is just the one month lost which os £600.

However how the OP will be affected is unclear because I have forgotten to take into account the fact that he already has other earnings to take into account so it may be the case that more months will be affected (up to a maximum of six). The rules are always a challenge to work out!