UC and New Style ESA

Commanded2bwell

I've read in various places that it's possible to get New Style ESA and Universal Credit at the same time. The way it's often discussed suggests that this isn't ESA as a legacy benefit, but as something you can apply for while also applying for/being in receipt of UC. Is this true? Can you apply for New Style ESA alongside UC, and if yes, why would you?

bg844

That's correct and many people do choose to claim New-Style ESA alongside Universal Credit. There are many reasons why someone would choose to, from the fortnightly payments to still being able to claim even if their UC stopped for whatever reason including savings etc. NS ESA also pays Class 1 NI whereas UC only Class 3. I have always recommended people to claim it alongside UC if eligible.

poppy123456

To be entitled to payments for New style ESA you will need to have the correct NI contributions from working at some point during the last 2 tax years. (2020/21 and 2021/22)

If you're currently working 16 hours or more per week then you won't be able to claim it. You must work less than 16 hours per week and then it will be known as "permitted work"

The ESA is deducted in full from any UC entitlement.

Commanded2bwell

Thank you, both.

I looked up the amount of award available under NS ESA and it came to just over £500, which is going to wipe out most if not all the typical UC award (for people without children, anyway). So I suppose the advantages are the Class 1 NIC contributions, and "redundancy" in case something happens with UC, as bg844 suggested.

I may have the opportunity to do a part time postgraduate degree next year. I tick most, if not all, of the student requirements for UC, but UC will penalise me 30% of the student loan on the assumption that I will use it for living costs (this would not actually be the case - the degree and associated costs would not cover living, as well, but the government have decided...).

Does NS ESA also penalise students 30% of their loan? Would this be a reason to apply for NS ESA and not UC?

poppy123456

NsESA is £84.80/week (over 25) which is known as assessment rate. If placed into the Support Group (equivalent to LCWRA for UC) then your money increases to £129.50/week from week 14 of your claim.

ESA Support Group pays less than LCWRA for UC. Therefore the UC will top up your income.  Support Group rate for ESA doesn't wipe out most of the UC amount because LCWRA pays more than ESA Support Group.

For UC if single (25 and over) with no rent costs then your then you'll be entitled to £368.74/month standard allowance and LCWRA element (if awarded) from the 4th month of your claim £390.06/month. Total amount £758.80/month.

The ESA deductions for UC would be £367.46/month (assessment rate) Then £561.16/month if in the Support Group/LCWRA.

This would give a total amount of £197.64/month UC after deductions plus the ESA of £129.50/week. As you can see it's definitely worth while claiming UC as well as ESA.

In your other thread you mention that you're working so if that's more than 16 hours/week you will not be able to claim ESA.

If a student then student loans will not affect New style ESA because it isn't means tested. Students and UC do not mix because it's means tested so any maintenance loan avialable to you will affect your UC even if you decide not to take that loan.

Please note the above figures for UC do not include Transitional protection, which will be eroded considerably (or potentially completely) anyway if found to have LCWRA.

Commanded2bwell

poppy123456 said:

This would give a total amount of £197.64 UC after deductions plus the ESA of £129.50/week. As you can see it's definitely worth while claiming UC as well as ESA.

Just to confirm, these figures are per week? Because if they are... holy heck, Batman!

I am working self-employed, when able, which hasn't been much this year. My hours are effectively  down to 16 or less.

Kimmy87

UC is paid monthly, so the UC amount given isn't weekly but per month.

poppy123456

Kimmy87 said:

UC is paid monthly, so the UC amount given isn't weekly but per month.

Yes, thanks. I just forgot to add the "month" at the end of that one figure (edited comment now to add it) that was quoted. I added to it to the rest of the UC amounts.

Commanded2bwell said:

poppy123456 said:

This would give a total amount of £197.64 UC after deductions plus the ESA of £129.50/week. As you can see it's definitely worth while claiming UC as well as ESA.

I am working self-employed, when able, which hasn't been much this year. My hours are effectively  down to 16 or less.

As self employed you will need to have class 2 NI contributions in the previous 2 tax years for a claim for ESA. The earnings limit of £167/week will apply to you.

Just to also point out, if you don't have children on your claim, you will not have the work allowance when you first claim UC. Therefore any earnings received will reduce your UC by 55%. If found to have either LCW/LCWRA then you will have the work allowance. More info here. https://www.gov.uk/government/publications/universal-credit-work-allowances/universal-credit-work-allowances

As self employed you will need to report your earnings and expenses on the last day of each assessment period. You will also need to attend your local Job centre for a gateway appointment with a work coach when you first claim, the same applies to all those that are self employed.

Commanded2bwell

Thanks, Poppy!

On a related tangent, regarding my self-employment, because of health problems this year I haven't worked much and am wondering if I will still be self-employed by next year. I've applied on the basis of self-employed, now. Is it possible or advisable to change my status at a later date?

poppy123456

No problem. Yes, you can change that as and when needed. Just log into your journal and report a change of circumstances. Then tell them you're no longer working.

Commanded2bwell

That simple? Wow. First thing that is!

If I've been work assessed by that point, does changing my work status affect that?

poppy123456

Yes lol. Although when i claimed UC for my daughter in 2021 i found it very straight forward and i'd never claimed it before then as i still claim Income Related ESA.  

If found to have LCWRA then you'll have no work commiments so it won't affect it. Until that's happened you're classed as a job seeker until a decision is made on your WCA. It's a work coaches discretion to either turn off or reduce commiments, some do and others don't.