Many years ago, in what feels like another life, I worked for the Department for Work and Pensions (DWP) taking new claims for benefit from a call centre in the wilds of West Yorkshire. I have many stories about that job, but the thing that stuck with me most is that almost everyone I spoke to was dealing with a crisis, and many were embarrassed and ashamed at needing help. There was a conversation I had many times, in which I advised those people to think of the benefits system as an insurance policy that they’d paid into through their taxes. Right now, the entire nation is dealing with a crisis, and a great many “policy holders” find themselves needing to make a claim for the first time.

A lot has changed since I left DWP. Governments have come and gone, and the benefits system itself has endured almost two decades of tinkering so it bears little resemblance to the one I remember. But because so many of our accountancy clients and umbrella employees find themselves needing to make new claims for benefit, I’ve taken a trip down memory lane and reached out to some former colleagues in order to find out what you need to know.

What you might be able to claim

Depending on your circumstances, you might be eligible for:

• Universal credit – an income-based benefit for people who are on a low income or out of work
• New Style Jobseeker’s allowance (New Style JSA) - a contributions-based benefit for people who are looking for work
• New Style Employment and Support Allowance (New Style ESA) - a contributions-based benefit for people whose ability to work is limited because of illness or disability

Income-based means eligibility is based on your financial need. Income-based benefits will be affected by your savings, and by the incomes and savings of other people living in your household.

Contributions-based means eligibility is based on your national insurance contributions. These benefits will not be affected by your savings, or by the income and savings of other household members, but they may be affected if you’re in receipt of a pension.

You may be entitled to more than one of these benefits, for example if you’re claiming New Style JSA based on your NICs, this could be topped up by Universal Credit based on your income.

Eligibility criteria:

As a basic summary:

• If you’re not working, or you’re working less than 16 hours a week, you’re able to work, you’re looking for work and you’ve paid enough NICs, you might be eligible to claim New Style JSA.
• If you’re not able to work because you’re ill or have a health condition or disability, and you’ve paid enough NICs you may be able to claim New style ESA.
• If you’re on a low income or are out of work and you have savings of £16,000 or under, you may be entitled to Universal Credit. Your partner’s income and savings will affect your claim.
• If you qualify for JSA or ESA, you might also qualify for Universal Credit.

Where to start?

The first thing you’re likely to need is advice on what you might be able to claim and the easiest way to find that out is through an online benefits calculator.

There are a few available, but I found Entitledto.co.uk to be the most useful, as it includes income-based and contributions-based benefits all in the same place. Take care to answer all the questions correctly, as the calculator will change the questions it asks you based on your answers – for example if you say you’re not looking for work it won’t ask any questions about JSA entitlement.

The calculator will give you an idea of which benefits you might be entitled to, and it will estimate the amount you might receive. It’s important to understand that this isn’t a guarantee of entitlement – it's an estimate designed to signpost you to appropriate help.

Claiming Universal Credit

Six income-based, working age benefits have been merged into Universal Credit. This is still being phased in, so if you’re already in receipt of one of those “legacy” benefits you may still receive it for a while yet, but anyone making a new claim based on their income is likely to be claiming Universal Credit.

Because of the enormous volume of claims that have been made in the last few weeks, all claims should now be made online and there is no requirement to call DWP, though they do say a telephone service is still available for those who are unable to use digital services.

The normal waiting time for claims to be processed is 5 weeks, but the last few weeks have seen more claims than ever before so realistically you might expect it to take longer. DWP are working hard and taking on additional staff to enable them to process claims as quickly as possible. Here’s a brief overview of the process:

• Create your Universal Credit Account
  You’ll need to create an online account to allow DWP to process your claim. This will be used to record your details and events will be logged in it as your claim progresses. If you live with a partner, they will also need to set up an account. The accounts will be linked together when you make your claim.
• Make your claim
  You need to make your claim within 28 days of creating your account. You will need your passport, driving licence or a debit/credit card to verify your identity. You will also need your bank details, an email address, details of your housing costs (eg. How much rent you pay), details of how much you pay for childcare and details of your income, savings and investments.
• Interview with Jobcentre Plus
  Ordinarily you would need to attend an interview with your “work coach” as the last step of setting up your claim. For obvious reasons, all face to face interviews have been cancelled but DWP may still want to talk to you by phone. The DWP phone system may cause their number to show up as an 0800 number, or as withheld, so if you usually screen your calls you should make sure you answer while your claim is being processed. Again, DWP are dealing with an enormous volume of claims, so a missed call could create a significant delay, and you might struggle to get through if you call them back.
  During your interview, your work coach will agree actions that you are expected to take while claiming, and these will vary depending on your circumstances. For example, these might include looking for work, or updating DWP about a medical condition.
• Applying for an advance
  Perhaps responding to criticism about the length of time it takes for claimants to receive their first payment from Universal Credit, DWP have set up a clear process for requesting an advance on your first payment. You can either do this online through your account, or through your work coach. You’ll need to explain why you need the advance, verify your identity and provide bank details for the advance payment. You can choose how many months you want to pay the advance back over, up to a maximum of 12. You won’t pay interest on your advance. You’ll usually have an answer the same day, but this comes with the familiar caveat about claim volumes.

If your savings belong to your business

Some people claiming Universal Credit have concerns that the money they have saved to pay their tax will take them over the threshold for Universal Credit. DWP have stated that money saved to pay your tax bills won’t be counted as personal savings, and won’t reduce your entitlement to Universal Credit. This is still the case if the funds are held in a personal account rather than a business account, though you may be asked to prove the money is for business purposes.

Claiming New Style JSA

If you’re claiming benefit for the first time because you’ve been working until recently, there’s a good chance that you’ve paid enough NICs to qualify for New Style JSA. You can receive JSA for up to 6 months, but it requires that you’re fit for, available for and actively seeking employment. It’s based on your NICs, so if your partner is still working, or your savings disqualify you from claiming Universal Credit, you might still qualify for JSA.

At the time of writing, the Gov.uk website still gives a phone number to contact Jobcentre Plus to start your JSA claim, but we know they would prefer you to hit the green “apply now” button and start your claim online. The website also still states that you’ll have to attend an interview at your local Jobcentre Plus office, but we know face to face interviews have been suspended. As with claims for universal Credit, DWP may still want to conduct the interview by phone.

Claiming New Style ESA

If you would otherwise qualify for New Style JSA, but you’re ill or have a health condition that limits your ability to work, you might qualify for ESA instead. You can’t receive ESA if you’re receiving SSP, but you can apply up to 3 months before your SSP ends.

ESA is claimed via the same process as Universal Credit, so you’ll need to go online and set up an account. If your circumstances indicate a claim for ESA, DWP will automatically take you down that route.

How much you might receive

There’s a lot of chatter online about how little money people can claim. Many new claimants are shocked and outraged at the value of their claims, and with so many people encountering the benefits system for the first time, that isn’t surprising. If you’re moving from contracting into a benefit claim as your main source of income, you can reasonably expect that income to fall and for many that fall will be dramatic. If that sounds like you, my advice is again to view your claim as an insurance policy – it’s there to help you survive a crisis. We’re all hoping for a swift return to our normal lives, so try not to panic when you see the numbers.

The numbers themselves can vary a great deal depending on your circumstances, including housing costs in your area and the number of children you have, as well as your savings, your remaining income and those of your partner. The calculator mentioned earlier will give you a good indication of what you, personally, might receive and how it will be made up. As an example, my hypothetical calculation, as single person who is able to work with no children in rented accommodation, was a total of £258.78/week, made up of £74.35 from New Style JSA, £14.60 council tax support and £169.83 Universal Credit.

Help with mortgage payments

This is another detail that has surprised and dismayed many new claimants. While Universal Credit contains an element for rented accommodation costs, help for mortgage payments comes in the form of a loan. The amount lent will only cover interest payments, and it does itself accrue interest. At the time of writing, the interest rate is shown as 2.61%. Worse, there is a 39-week waiting period from the start of your claim, so if you manage to get back to normal within 9 months, you won’t receive any help at all. If this affects you, my advice is to urgently speak with your lender about arranging a payment holiday. This should be available for at least 3 months under new FSA guidelines brought in as part of the emergency response to coronavirus.

If you have any questions, or if we can help in any way, please call our expert team on 01296 468 483 or email info@orangegenie.com.