UC Migration from ESA - permitted work v work allowance

liamfitz

Hello,

Whilst I am receiving a little more per month on UC ( mandatory migration from ESA ), due to transitional protection, I am losing a lot more, when you compare UC earnings limits with ESA. For example on ESA 2026-27 max. earnings are £881.83 p.c.m., before affecting benefit payment, however, on UC, max earnings ( before deductions ) are £427.00 p.c.m i.e. less than half I used to earn. I thought the whole idea was that you should not be worse off on UC, compared with 'legacy benefits'. Can this be right does anyone know ( UC say it is )? Thanks.

huckster

It is correct. ESA in allowing net earnings of £203.50 per week providing worked hours are less than 16 hours per week, is more generous than UC Work Allowance of £427 per month. However, ESA would end if PW criteria is exceeded, whereas UC claim would continue with Work Allowance and 55p taper rate deduction.

I think you just have to look at your combined benefit position and accept the way the benefits are configured. Government plans to change benefit system by 2028/29, with ESA and JSA replaced with different benefit and new rules/rates.

KxMx

The "not worse off" applies to your UC award before deductions.

Ms_Wheels

Yes what you have said is correct.

On ESA, claimants, permitted work allowed them to work up to 16 hours and earning 16 x NMW without affecting their ESA. If they exceeded this, ESA stopped.

On Universal Credit, there is no limit on working hours and no “permitted work” system. Instead, as you are eligible, you have a work allowance of £427. Earning above this are subject to 55% taper, reducing UC by 55p per £1 earned. Earnings may also reduce council tax support (rules vary between councils).

The phrase “not worse off” appears to apply only to the basic UC award before deductions.

People previously earning between £427 and £881 under ESA permitted work may end up financially worse off on UC because of the taper deductions and council tax (if applicable). Those able to earn more than £881 will benefit from the UC taper system.