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Forum Home  →  Discussion  →  Covid-19 issues  →  Thread

Furloughed workers and benefit cap

jeanette
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Welfare rights - Newcastle City Council

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Total Posts: 42

Joined: 25 June 2010

As UC bases the benefit cap on actual amount paid rather than hours worked I believe that UC will apply the benefit cap to many of our families if they receive 80% earnings as they will drop below the earnings exemption threshold.

I can’t find anything that has been announced in the changes to prevent this. Has any one else got any information?

Madamejones
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Benefits Take Up officer - Cheltenham Borough Council, Gloucestershire

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Joined: 17 June 2010

Did you get an answer to this at all?

I have a family and Mr is SE and was earning enough to remove him from the Cap but no work at all now so UC have applied the Cap again! Surely there has to be something in place? He would self report his earnings as usual so I guess as they are £0.00 the system just applies the Cap?

Only other option is a DHP.

HB Anorak
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Benefits consultant/trainer - hbanorak.co.uk, East London

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A lot of people in that situation should qualify for a 9-month grace period.  If they were on UC throughout the 12m leading up to the reduction in/cessation of earnings the system ought to be able to apply the grace period automatically, but if they have made a new claim it will need investigating - especially for the self-employed because there is no automatic harvesting of income data from HMRC in self-employed cases.

Madamejones
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Benefits Take Up officer - Cheltenham Borough Council, Gloucestershire

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Yes understand about the Grace Period - my customer was Capped for many years and only been SE for around 5 months, wasn’t earning enough at first so still Capped but last few months he was earning about £600 so Cap removed and now this!

Ruth Knox
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RAISE Benefits Advice Team, Liverpool

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Joined: 27 January 2014

I think this issue may come up a lot, as anyone, self-employed or working who, under the furlough or SEISS scheme will earn less than the 16 hours’ living wage bar. As far as I can see the furlough or SEISS payments could be accepted as earnings (and I assume would calculated on a weekly basis for Benefit Cap purposes even if treated differently for UC purposes) but this could take a lot of workers below the threshold. I haven’t seen anything to suggest that this threshold isn’t still in operation. Does anyone have any more information?