Universal Credit and Benefit Cap

I don’t know if this has already been dealt with elsewhere but I just wondered if anyone knows whether there will be any Benefit Cap work exemptions within Universal Credit. Currently eligibility for Working Tax Credit entitles the family/individual to an exemption but I am unclear of the picture within UC. I cannot believe that someone working 1 hour and qualifying for a work allowance under UC would be exempt from the Benefit Cap so perhaps there is no exemption for working but hopefully I have missed something somewhere.

I hope this makes sense.

See Reg 82 UC Regs - you are exempt from the UC benefits cap if you have earnings in the assessment period of £430 or more.

Thanks Jon. So very approximately 16 x NMW? per week. I presume that may rise with the Living Wage?

It’s been £430 since April 2013 but yes, I think it’s quite possible it will go up with NLW coming in.

What’s handy as well though is that if you are a couple it can be your combined earnings.

Hi All,

I wonder if anyone can clarify reg 82 (2) with regards to grace periods and benefit cap?

The reg says - 

(2) A grace period is a period of 9 consecutive months that begins on the most recent of the following days in respect of which the condition in paragraph (3) is met—
(a)a day falling within the current period of entitlement to universal credit which is the first day of an assessment period in which the claimant’s earned income (or, if the claimant is a member of a couple, the couple’s combined earned income) is less than the amount mentioned in paragraph (1)(a); .
(b)a day falling before the current period of entitlement to universal credit which is the day after a day on which the claimant has ceased paid work. 

82 (2)(a) seems straightforward enough but we are struggling a little to get our heads around (b). 

Any guidance would be much appreciated!

Thanks

Caroline.

It could apply if you are excluded from UC entitlement temporarily for some reason:

- redundancy pay in excess of £16,000
- absent from GB

I think the effect of the regulation is that you would be using up your grace period during any such interlude between work ending and claiming UC