UC and works pensions
I’m working with a client who was homeless, but he is now in private rent.
He has 2 works pensions which pay £1100 per mouth, but he is under state pension age, He also receives PIP at the HR of both elements.
Would he have any element to UC and housing element?
Depends where he lives and how much rent he pays. If he is assessed as having limited capability for work related activity (LCWRA) the living costs allowance in UC is £646.14 after three months. His monthly rent, or appropriate LHA rate, is added to that to arrive at his maximum monthly UC. That maximum UC is then reduced £1-for-£1 by the pension income.
This means that he will qualify for UC after three months if the amount of his rent that is eligible for UC exceeds about £450 a month. For the first three months UC won’t include the LCWRA element and his rent would need to be close to £800 a month for him to get UC.
Can you say:
- is he a private tenant or social sector tenant?
- in what area does he live?
One final thing: if he is living in supported accommodation in the non-profit sector, he can still claim HB. He wouldn’t qualify for any UC without a housing element, but (again depending on rent and location) might qualify for HB instead. In his circumstances (with a relatively high income other than earnings) the HB means test is more advantageous than the UC means test.
He lives in a full UC area.
Private rented accommodation £424 per month
LHA is £75 per week
Hope this helps
In that case he probably isn’t going to qualify for UC: even if his full rent is eligible, it won’t take his maximum UC amount above his pension income. This is one group for whom UC can be less generous than legacy benefits: people with significant income other than earnings who pay rent. UC doesn’t extend as far up the income scale as HB used to for people in this group.
If the pensions are a bit less than £1100, or if that is the pre-tax amount and the net is slightly lower, even so he will only get a few coppers of UC. Basically his net income after tax needs to be lower than £1,090 a month after the LCWRA supplement is added. Looks as if his income is above or not very much below that amount.
Can I pick your brains HB Anorak?? I wanted to know about occupational pension income and whether it is gross or net that they use in the calculation, but you have answered that really! but also, if somebody got a backdate of pension, how would that be treated under UC? Interested to hear your thoughts!