Universal Credit Calculator FAQs

| posted in: FAQ, Universal Credit | 124 Comments

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Below are a number of frequently asked questions about the Universal Credit Calculator. These are collated based on feedback on the calculator and other posts on the blog. If you have questions, or see something that is missing or unclear in the blog below, please post your comments at the bottom of this page.

If you are looking for the answer to a question, use ctrl+f to see if it has already been answered.

 

Q. What information is the calculator based on?

The calculator is currently based on the Universal Credit regulations published in February 2013. It gives an accurate estimate of your entitlement, but does not claim to be exact as it does not ask the full set of (around sixty) questions required by the DWP to process a Universal Credit claim.

Policy in Practice have been working on Universal Credit for a number of years and have a good insight into how it will work and believe the calculator offers the best balance between speed and accuracy for claimants. Welfare Advisors should enquire about the premium version which can be customised and offers a greater level of accuracy.

 

Q. Why are certain features (such as childcare) only available on the premium version?

The free version of the Universal Credit calculator is intended for claimants, as an illustration of how Universal Credit will work. It offers an accurate estimate of what your entitlement might be, based upon the information entered. Users should be aware that the calculator is a quick ‘ready-reckoner’, rather than a comprehensive calculation which would take approximately sixty questions, rather than the ten shown. However, the premium version of the calculator can be adapted to calculate for the costs of further aspects of Universal Credit and other welfare reforms. Every effort is being made to improve the functionality of the free version as much as possible, so please bear with us in the meantime!

 

Q. The calculator tells me how much better off I will be in work under Universal Credit, but it doesn’t allow me to see if I am set to gain or lose anything when it comes into effect. If I am in work then how is this information useful to me?

Universal Credit is designed to reward work, and so it is important to see how work pays under the new system. There are many people who do want to know their out of work entitlement, which is also a central part of the Universal Credit calculation. Additionally, it is important to let people see the Housing Element, Child Element, and Unemployment elements of their Universal Credit entitlement since these are all separate payments under the current system.

The premium version allows advisors to compare the current benefit system against Universal Credit. Claimants can compare their current tax credit award / take home pay with what they get in terms of in-work Universal Credit support and take home income under Universal Credit.

 

Q. The calculator gives figures for both weekly and monthly allowances, but how often will I actually get paid?

Universal Credit will be paid monthly in a majority of cases. In certain exceptional circumstances, landlords and advisors can apply for more frequent payments.

 

Q. What is an ‘earnings disregard’ / ‘work allowance’?

The earnings disregard, also known as a ‘Work Allowance’ is an amount of money that a household can earn without affecting their Universal Credit award. The amount of the work allowance depends on the household, for example: lone parents receive a higher work allowance because they may face higher costs to go to work, and households with zero housing costs can earn more to encourage lower housing benefit payments.

 

Q. Does the calculator account for housing under-occupancy?

The premium version of the Universal Credit calculator calculates the cost of the bedroom tax.  If you are using the free version of the calculator, you may receive less housing benefit than shown if you have a spare bedroom (i.e. if the number of bedrooms is equal to the number of residents).  If you are concerned about how the bedroom tax will affect you, you should contact your Local Authority.

 

Q. I’m self employed, how do I use the calculator?

It is not yet clear how claims will work for those in self employment. Policy in Practice expect Universal Credit to follow a similar process to the current benefit system. To use the calculator, follow these steps:

1. Calculate your hourly wage by dividing your expected weekly profit by your hours worked.

2. Enter the higher of the minimum wage or the actual hourly wage and the hours worked.

3. Use the calculator as normal.

If your income / hours fluctuate, then Universal Credit will likely take the average income from the last three months to calculate your next Universal Credit award. Read this blog post for further information on self employment under Universal Credit.

 

Q. Should I include Council Tax Support in the calculations?

A: No, Council Tax Support will not be included in Universal Credit. Policy in Practice have worked with a number of large local authorities to design Council Tax Support schemes that work with Universal Credit and the other changes to the welfare system. Click here for thoughts on the decision to exclude Council Tax Support from Universal Credit.

The premium version of the calculator includes estimates of council tax support based upon the default schemes that the majority of councils will be using.

 

Q. I’m a student, how do I use the calculator? Will my bursary count as income?

Typically, student income will count as unearned income and will lead to a pound for pound reduction in the Universal Credit award. However, the regulations are unclear and are currently being scrutinised by the SSAC, students may yet be entitled to Universal Credit support.

Having made the choice to be in full-time education, students may be expected to take on the costs of supporting themselves and pay for this through higher future earnings (as under tax credits and JSA).

The alternative is that it will be treated in the same way as earnings. You would keep your housing support, and have your universal credit fall away at a rate of 65p in every pound of bursary above the earning disregard level. You would keep a percentage of your additional earnings from work.

 

Q. Why can’t I find my local authority in the Local Authority Area drop-down selection?

The drop-down for Local Authority Area does not directly correspond to each local authority, but rather to the Broad Rental Market Area (BRMA) that is used to calculate housing benefit. A local authority may only have one BRMA, but many have more than one BRMA (especially in London) .

You can input either your postcode or local authority into the BRMA finderto find your BRMA, then select this area in the drop-down.

124 Responses

  1. Im so lost by all off this stuff.I did the calculater as i work under 16 hours (12.45 as work w/ends) Just been told i carnt claim job seekers and im living on fresh air with a 17 year old lad.There is no help for working all my life i feel depressed.The calculater says i am entitled to money but this isnt in my area i dont think.

    • Daniel Cavanillas

      Hi Wendy;

      It is difficult to provide any guidance without understanding your particular circumstances. You may be entitled to housing support, or if you increase your hours to 16 you may be able to claim Working Tax Credit.

      Under Universal Credit, the hours you work will not affect your claim – you will receive in-work support even if you work under 16 hours, provided that your income is low enough. Therefore, people in your situation are likely to be better off under Universal Credit.

      Daniel

  2. I am concerned that your calculator appears to ADD the childcare support element of universal credit to the “Take home Income”, but not to DEDUCT the actual cost of your childcare. This gives a misleading impression of what someone claiming childcare costs is actually left with each month, after paying for their childcare. Would you consider revising the calculator to add in the childcare support amount, but also deduct the actual childcare cost, thus giving a real “take home income” figure that is meaningful for a parent trying to see the financial impact of moving from unemployment into work?

    • Hi Mary,

      Thank you for your feedback.

      We agree that it is important to have a realistic picture of the take home income when moving into work, which is why we do deduct child care cost from net earnings. If you have a look at Step 4 and go to “Click here to see a detailed breakdown”, click on the magnifying glasses next to the net earnings figure. You should now see that we deduct the amount that parents have to cover themselves (i.e. the difference between childcare support and actual childcare cost).

      The argument for adding childcare support to the income is that – similar to housing benefit – it is income, even if it can only be spent on childcare. Does this seem sufficient to you or do you think it is important to deduct the whole amount?

  3. I am slightly concerned that being a lone parent working part-time at 30 hours per week and just about managing on the benefits I get, that the Universal Credit calculator suggests I will be worse off by approx £40 a week but if I earned just slightly less then I could get more credit. This doesnt seem right. I struggle to get by as it is.

    • Dear Alipea,

      Thank you for your message.

      I’m not sure whether your question refers to being £40 worse off as a result of switching to Universal Credit or whether it refers to being better or worse off the more hours you work.

      If you are saying that you will be £40 worse off under Universal Credit than under the current system, it is important to note that if you are an existing claimant and there are no changes in your circumstances you will be eligible for Transitional Protection. This is essentially a top-up, to ensure that you are no worse off in cash terms as a result of the changes. In your case, if the changes make you £40 worse off, you are likely to receive £40 on top of your Universal Credit entitlement.

      The number of hours you work will affect your benefit entitlement but it will be different under each system:

      -Under Universal Credit, for each additional hour worked the benefit payment is reduced at a rate of 65 per cent for those earning under the personal tax threshold, and 76 per cent for basic rate taxpayers. So if you were to work fewer hours you will probably notice your credit entitlement go up.
      -Because of the way Universal Credit is structured, you should always be better off the more hours you work. So any withdrawal of benefits should be more than compensated by an increase in earnings.
      -Under the Current System, the various benefits are withdrawn at different rates. In some cases this might result in being worse off by working an extra hour.

      If you are still unclear, please reply to this comment with more details about what circumstances you are entering into the calculator.

  4. Dear devon the uc helpline was honest enough and with a sense of humour! To say a full claim in runcorn is reallistically 2 to 3 years away maybe even by 2017! . As zero is onoffer from the current credit system but 650 pounds!!! From universal credit . Per month. A great idea that will come too late to save many like us. Total income is £ 23000 pa so zero tax credits/ housing benefit . Any ideas? .

    • Dear Paul,

      Thanks for sharing your situation with us. It is great to hear that you will be so much better off under Universal Credit than under the current system. Unfortunately, there is no way to claim Universal Credit before it is available in your area.

      However, an income of £23,000 does not necessarily mean you are ineligible for Tax Credits or Housing Benefit under the current system. This will depend not only on your income, but on your circumstances (e.g. if you have children, your rent, how many hours you work, etc.)

      Contact your local authority, or Citizens Advice Bureau to find out what you might be able to claim.. You could still be entitled to benefits under the current system, even with your income.

  5. Hi,
    I am not working now and i am getting JSA, so if I choose in calculator that im working 16 or 40 hours in week it still count that i will get same amount like im getting JSA. So it means that if I start to work I still will be getting about 72 pounds in week or this is some mistake?

    • Dear Odeta,

      You may still receive Universal Credit even when working full-time (just as with Working Tax Credit under the current system). What elements of Universal Credit are showing in the chart? (Look at the legend below the chart to see which colour represents each element).

      It is hard to comment on your specific calculation without knowing the details that you have entered into the calculator. If you would like us to look into it further and explain your calculation, please reply to this comment with the details that you are entering into the calculator.

  6. hi ive recently lost both my parents and as a result have inherited a large amount of money in the ball park of £50,000. i cant bring myself to spend the money due to the nature of their passing and would like to save it for my childrens education does this mean i will be punished for giving my children a better start by ensuring they dont have student loans. i would like a reply as i read that if you have savings over £16,000 you are not entitled to UC but i entered my savings on the calculator and it says iam entitled. if the former is true how does this encourage saving?

    • Dear Vicki,

      People with savings above £16,000 will not be entitled to Universal Credit. We agree that this does not encourage savings, and Policy in Practice have argued that this threshold should be higher.

      If you enter savings above £16,000 into the calculator, it does not display an entitlement to Universal Credit (but may show entitlement to Child Benefit or DLA).

      Please reply with the circumstances that you have entered into the calculator and we will look into the issue further.

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