Quick overview of Universal Credit and a Limited Capability for Work
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Why might it be of interest?
When a young person is not working or if they are unable to work they will apply for Universal Credit (UC). Many of our young people will not be able to work at all or they may have some capacity to work but not right now.
It’s important to understand that UC is usually an earnings replacement income so applicants have conditions attached to their benefit – ie they have to be available for work and active in looking for work. This is often not possible for our young people and you might think that they are, therefore, unable to claim UC. However, there are circumstances when a young person unable to work at all or for now can apply for UC and be successful.
UC is available for people between age 18 and state pension age, currently age 66.
Universal Credit (UC)
UC is an earnings replacement income so it is usually only available to people who are out of work (or on a low income) who are available for work and actively looking for work. A person’s application will have conditions attached which must be met for the applicant to continue to receive UC. If they don’t meet the conditions they could be sanctioned (ie some of their UC is deducted) or the benefit stopped.
Additionally, the person cannot have more than £16,000 in savings or similar. If they have under £16,000 but over £6,000 they can still claim but their payment will be reduced. Any savings or similar under £6,000 are disregarded but must be declared on the application.
Limited Capability for Work (LCW)
When you apply for UC you can indicate that you have a disability or long term health condition that affects your ability to work. This will trigger a Work Capability Assessment (WCA) which is initially a paper based assessment.
You answer a series of questions about your physical ability and your mental health needs. You will need to provide evidence of your limited capability for work. If you score 15 or more points you will be deemed to have an LCW. You may have to attend an interview.
If you are deemed to have an LCW you will have fewer conditions attached to your claim. You will not be expected to apply for jobs but you may need to do some work preparation activities.
You are able to do some work even if you have an LCW before it affects your benefit payment. You should discuss any work opportunities with your work coach.
Limited Capability for Work and Work Related Activity (LCWRA)
If is deemed that you have an LCWRA you will not be expected to look for work or undertake any work preparation activities. People placed in this group generally are not expected to be able to work and have no expectation of that changing.
However, you can work or volunteer if you are able to.
You are likely to be eligible for an additional payment if you are in this group.
Universal Credit and Students
As UC is an earnings replacement benefit and you have to be available and looking for work students cannot generally apply for it. There are a number of circumstances that do allow students to claim UC. I am only discussing the disability related circumstances.
If a student is in receipt of PIP or DLA and have had a WCA which resulted in an LCW or LCWRA before starting their course then they can apply for UC.
The catch here is that the student has to have had a WCA resulting in an LCW or LCWRA before they enter full time education. Obviously, for a young person at school they are in full time education which means that they can’t apply for UC.
The opportunity arises when a young person is moving from school to college.
The question is how to get a WCA carried out as this is usually triggered by the UC application when the applicant says they have a disability or long term health condition. If you wait to make the UC application until their last day of school (for example, mid July) you risk the WCA not being carried out before they start their college course as it can take some weeks or months from the initial UC application to the WCA being carried out. And once they start their course they would be deemed to be in full time education without an established LCW.
There is a work around. Contact recommend that you make a credits-only claim for New-Style Employment and Support Allowance, well ahead of the change to a college course. This will trigger a WCA. Your young person won’t receive any payment as they won’t have made any national insurance contributions – you are not making the claim to receive any benefit, simply to trigger the WCA.
Contact recommend that you make the claim for new-style ESA when your young person turns 16 but you should certainly try to do it by the time they are in their last year of school at the latest.
This claim won’t affect your child benefit or any other benefits you currently get as your young person won’t be receiving any payments.
Note: If your family receives benefits you should take advice before claiming UC for an 18 year old as your family benefits will be affected by them receiving benefits in their own right.
Note: University students who receive a student maintenance loan will have this taken into account as income. Specific grants, such as DSA, are not considered income.
Categories: Benefits, Financial Matters, Universal Credit (UC)
