Means tested, income linked benefits would be reduced or could stop if you receive the payment. Additional detail is given below for the most common benefits.
Universal Credit
The amount of Universal Credit you receive depends on your income. Universal Credit is calculated based on monthly income. By receiving additional income, the next monthly Universal Credit payment will go down or you may get no Universal Credit payment in that month. The following month your Universal Credit should return to normal. Generally, your Universal Credit payment will reduce by 55pence for every extra £1 of extra pay. You should be better off as the additional payment you get is more than the Universal Credit you lose. If your normal Universal Credit payment is low, then the payment may stop for a month.
Your regular Universal Credit payment should recommence automatically the next month. You can monitor this via your online Universal Credit account and/or seek advice.
Tax Credits and Legacy Benefits
The amount of Tax Credit and Legacy Benefits you receive depends on your income.
Tax Credits are calculated based on annual income. When the additional payment is received there would be no immediate change in your Tax Credits payment. The additional payment you receive should be included when you complete your annual review and annual declaration. So, the additional payment wouldn’t affect your Tax Credits until the new annual Tax Credits award begins.
If because of the payment Tax Credits or legacy benefits stop, you will need to make a new claim. These benefits have been transferred for new claims to the Universal Credit regime. A claim would need to be made under this system for equivalent benefits to resume.
- Housing benefit (contact local authority housing benefit department)
- Income support (contact DWP)
- Income-based jobseeker’s allowance
- Income-related employment and support allowance (ESA)
Pensions Credit
If you claim Pension Credit whilst you are working, then it will be reduced because of the additional payment. You should report the additional payment to the DWP.
Scottish Child Payment
Paid to families for each child only where the family receives other qualifying benefits. These include Universal Credit or Tax Credits. When you receive the additional payment, if the qualifying benefit that makes your family eligible for the child payment stops, you should report this to Social Security Scotland. This will mean the child payment will stop. When the benefit restarts you should also tell Social Security Scotland and the child payment will restart. If your qualifying benefit doesn’t stop then you will continue to receive the child payment.
Carer’s Allowance
If you receive a carer’s allowance whilst working, it will stop if you earn more than £132 per week. The additional payment should be reported to the DWP.