What is my maximum UC?

A look at the allowances and UC elements that build up to make the Maximum UC you could potentially get.

Last time we looked at who is included in a UC claim, the general principles and steps in how UC sums work and looked at the basics of Step 1 the effects of savings and capital.

This time we look at Step 2: Adding up your Maximum UC. The maximum UC that you could potentially get is made up of:

a "Standard Allowance" for you and any partner – the basic bit in every UC claim. It is also the bit that is subject to any sanction and a % of which any repayments or Third Party Deductions are worked out.
UC “elements”: these are extra amounts available for: for children/qualifying young people, child disability, childcare costs, being unwell (i.e. having “limited capability” in relation to work), being a carer and housing costs. A further transitional element can apply if you are undergoing a "managed migration" to UC from the legacy benefits.

The allowance and elements are not separate benefits, so you don’t have to make separate claims for them. They should be added in to your claim based first on information when you claim and then updated as things change during your UC claim.

UC though can sometimes miss out an element that is due to you. So it is worth keeping an eye on your monthly statements and knowing which elements you should be having included and why, so that you can raise queries with UC if anything seems wrong.

Standard Allowance:

This is the basic amount that will be in every UC claim. There two rates each for

single claimants - £251.77 if under 25 per month and £ 317.82 if aged 25+
for couples £395.20 if both partners are under 25 and £498.89 if one or both are aged 25 or over. .

All rates and sums in UC are done monthly, whereas other benefits do these on a weekly basis.

Comparison with legacy benefits:

These rates are broadly similar to the weekly rates in the "legacy benefits" that UC is replacing:

for single people £73.10 and £58.70 per week (but that only affected some under 25s)
for couples the higher UC couple amount is equal to the legacy rate of £114.85. Legacy benefits do not have a lower rate for couples aged over 18 and under 25

These rates - old and new - have fallen in real terms sice 2011 - the £73.10 rate would otherwise now be £87.50. While broadly similar between UC and the "legacy benefits" - unless under 25 - the different way UC is paid makes a big difference to the experience of living on those rates.

Waiting 5 weeks for a first payment then living on 15% below "the minimum the law says you need to live on" for the year after as you repay an Advance Payment loan, are cited as major factors in the higher incidence of foodbanks use and rent arrears amonst UC claimants.

Living on just a standard allowance would be very difficult, which is why ensuring you have any additional elements can be so crucial. And fortunately, there are some important additional elements relevant to people affected by cancer.

Examples of the Standard Allowance

Joe and Jemal are a couple aged over 25 they have a standard allowance of £498.89 a month

Dougal and his friend Florence live separately. Dougal is 28 and gets a standard allowance of £317.82 a month.

Florence is aged 24, so only gets £251.77 a month, but tries to make do, cheerfully.

UC Elements

These are important to meet extra costs depending on your circumstances. While paid for additional needs, they may partly be needed to make up shortfalls / deductions in your Standard Allowance.

Child element

This is the amount that – until April 2017 - was paid per child or qualifying young person in your household. It was added in at the rate of:

£ 277.08 for the first child
£ 231.67 for each subsequent child

Two changes happened from 6th April 2017:

the extra amount for the first child was dropped – as was the equivalent Family Element in Child Tax Credit - for claims made after that date. New claims just include the lower amount for the first child
a “Two Child” policy - affecting both UC and CTC - limits help for 600,000 third or subsequent children.

The Two Child policy

This controversially breaks the age-old link between your actual needs and amounts included in a safety net benefit. You can see what the MPs on the all-party Work and Pensions Select Committee made of this policy in the links below.

The policy states that:

if a third or subsequent child was - or is - born after 6th April 2017, then no child element is included for that child.
exceptions are made if an affected child is: adopted, taken in via an approved kinship fostering arrangement, is born in a multiple birth or was born following non-consensual conception.
no exceptions apply if e.g. parents could independently afford an extra child at the time they planned their family, nor for any exceptional circumstances such as: serious illness (whether of the parent or child), redundancy, family breakdown, bereavement etc.

Example:

Jo and Jemal had two children, Jake and Josh born before 6th April 2017 who are unaffected by the policy. Both parents were in well paid jobs when they planned to try for a girl to complete their family. Their little bundle of joy, Jasmine arrived in 2018. Unfortunately, Jemal has since been made redundant from his long term job and Jo is off sick with breast cancer, so they now need to apply for UC. They get a higher Child Elements for Jake , a standard one for Josh, but no element at all for Jasmine.

Child disability addition

This is technically an addition to the Child Element, but you can think of it as just another element. It's an extra amount allowed for each child or qualifying young person who qualifies for Disability Living Allowance (DLA) – when under 16 - or Personal Independence Payment (PIP) - after 16

The additions come at one of two rates using the same criteria – but not the same amounts - as Child Tax Credit:

a lower rate - £126.11 a month - for children qualifying for any rate of DLA/PIP, apart from the top rates of DLA Care / PIP Daily Living
a higher rate - £392.08 a month - for those who do qualify for DLA Care (highest rate) / PIP Daily Living (enhanced rate)

The big difference with CTC is in that the lower rate under CTC works out at the equivalent of £279.58 a month. The higher UC rate does match the equivalent CTC amount, though. So families thinking of switching from CTC to UC need to think carefully and get advice before doing so.

The idea of the addition is to act as a means tested top-up to DLA and PIP, which are not intended to fully cover the extra costs of living with a disability or long term illness. They are a very welcome addition regardless of other income you can draw on, but this addition is to provide further help to lower income families who may have less other resources to draw on.

Eligibility for this addition is not affected by the Two Child policy, so if a third or later child has or develops a long-term illness or disability, their parents can still get the child disability addition, even if they can’t get the basic child element for that child.

For example:

Jo and Jemal’s third child, Jasmine does not qualify for a child element so the parents miss out on £231.67 a month towards her basic living costs. However, Jasmine has a long-term illness and DLA Care at the middle rate is awarded. Jo and Jemal can still have the lower child disability addition of £126.11 included in their Maximum UC. Without the two child policy and disability cut, they would have received £511.25 in respect of Jasmine.

In time these cuts may become more noticeable for parents of children and young people with a cancer diagnosis, especially if they do not get the highest rate of DLA Care and are a 3rd or subsequent child.

Childcare Element

These are for childcare costs when a parent is working. In a couple, if one is working and the other isn’t, then the non-working partner would normally be expected to provide the childcare. However, that does not apply if the non-working partner is unwell.

The good news

UC provides a more generous 85% of childcare costs – up to a maximum amount of £646.35 a month for 1 child and £1,108.04 for two or more children - than the old Working Tax Credit that has been cut back to 70%.

And because there are no “hours rules” in UC, working parents can start getting that help regardless of how many hours they work. Under WTC, you had to be doing at least 16 or 24 hours.

The less good news:

The downside with UC is that you need to pay upfront and receive the money back for that month in the following month’s payments. So, childcare costs that you incur in week one of your claim might not be repaid until week 9 of your UC claim.

You also must notify UC each month. The timescale for doing so has recently been extended to 30 days after the end of the assessment period.

Limited Capability for Work Related Activity (LCWRA) Element

This is one of two “limited capability” elements, depending on which “limited capability” group, the Work Capability Assessment (WCA) places you in, when you are too unwell to work much or at all. The LCWRA Element is the equivalent of the ESA Support Component and is paid to those placed in the UC LCWRA / ESA Support group.

The LCWRA element is worth £336.20 a month (equivalent to £75.76 a week).

It usually kicks in from the 3rd assessment period after becoming unwell, but should be included straightaway in your UC, if you:

switch over to UC from Income related ESA - or add on UC to a New style ESA claim - with a Support Component already in payment; or
come under the special rules for those with advanced/ life limiting cancers

The amount looks a lot higher than the ESA Support Component (at £38.55 a week), but things are complicated by the different approaches to help with adult disability costs - there are separate disability premiums in legacy benefits, but these are merged into the LCWRA element under UC. You could be better or worse off under the new UC arrangements. I will look at this more in UC Sums 4: Missing elements

It’s not just about the money

The extra income from an LCWRA element could be very welcome. It can double your Standard Allowance in some cases, although this does reflect additional costs. However, there are also wider advantages:

unlike ESA you don’t need to pass the WCA to stay on the benefit, but having LCWRA status means that you do not have to meet any UC work requirements
should you feel able to do some work, e.g. in recovery, it may be that more of your earnings can be ignored in Step 3. Assessing your other income.

Who qualifies for an LCWRA element?

It’s the same criteria as for the ESA Support Component. You can find out more in UC4: Sickness and carers issues in UC. Essentially you qualify if you are assessed as having both "Limited capability for work" (i.e. too unwell to work normally or actively look for work) and "limited capability for work related activity" (i.e too unwell to have to get involved in interviews, training, trial work placements etc) . You remain free to opt in to any activities or even do some work even when accepted as having LCWRA.

Many people with cancer may be "treated as" passing this test without actually needing to go through a full Work Capability Assessment (WCA). This happens either if you have a DS1500 certificate from your consultant or GP in relation to an advanced and potentially life limiting cancer or if - regardless of your diagnosis and outlook - you are "awaiting, receiving or recovering from" cancer treatments.People w

If you qualify it is worth an extra:

£336.20 a month . Thats a weekly equivalent of £77.58

At first sight a weekly amount of £77.58 looks much more generous than the ESA Support Component of £38.55. However, direct comparison is more difficult as the LCWRA element also includes an amount to replace the different aduld disability amounts that UC inherited from legacy benefits - you could gain or lose from the new arrangements. We will see more in UC Sums 4

Examples in practise:

Dougal is awaiting treatment for his cancer to start. He is “treated as” being in the LCWRA group and can have an LCWRA element added

For couples, only one element can be included, even if both partners might each qualify – whether for the same or a different “limited capability” element. If one partner qualifies for an LCWRA element and one for the lower LCW Element – see below - then it is the higher LCWRA element that is included:

Mr Rusty qualifies for an LCW element (see below) because of his long running arthritis. His partner Ermintrude gets the LCWRA element as she is going through treatment for breast cancer. They will only get the one element – the higher of the two – counted in their joint Maximum UC.

Limited Capability for Work (LCW) Element

This is the equivalent of the ESA Work Related Activity Component, that in the past was paid to all those in the UC LCW / ESA WRA group. You come under this group when it is accepted that you have LCW , but not that you also have LCWRA. As a result people in this group may have to do some work-related activity, on pain of a sanction if they do not comply.

This group may be relevant to people with cancer who do have to go through the full Work Capability Assessment (WCA) if unwell while on a "watch and wait" regime with no firm treatment plans yet or who remain unwell in later recovery from treatment.

However, these extra amounts were abolished – in both UC and ESA - for new claims after 3rd April 2017. The amount was – and still is for those who can have it included - the same in each benefit:

£126.11 a month under UC (and £29.05 a week under ESA)

There is no extra in the UC amount for the now abandoned adult disability amounts so there can be big losses on switching from legacy benefits to UC

Who can still have an LCW element?

Essentially there are two groups who can still have an LCW element:

those who were already getting one before 03.04.2017 and have been continually entitled to one ever since. This may have been a UC LCW Element throughout or started off life as an ESA WRA Component but then became an LCW element on switching to UC.
those who were in the WCA system before that cut-off date, have been unwell ever since and still retain a right to start receiving the LCW element / WRA component.

Examples:

Mr Rusty has been getting an ESA WRAC since 2015 and brought it with him when the family moved over to UC. However, he no longer has that element included, after his partner, Ermintrude became entitled to the higher LCWRA element. However, when she recovers and stops being entitled to her LCWRA element, Mr Rusty can still get his LCW element back.

Mr McHenry was going through treatment in April 2017 and has been in the LCWRA group until a recent re-assessment that has put him in the LCW group. Because he has been continuously in the system since before April 2017, Mr McHenry can swap his LCWRA element for an LCW one.

Other advantages to being in the LCW group:

Even if the money - in the form of the LCW Element has gone, has gone, the LCW group still exists and being in it it still brings some useful advantages:

your UC work requirements are less – to do some work-related activity rather than be a full-on active jobseeker. This means engaging in activities that might help with future employability when well enough - rather than e.g. actively looking for work as a jobseeker
and if you can do some work while in this group, you may benefit from having more of your earnings ignored under Step 3

Carers element

This is added on if you “regularly and substantially care for someone for over 35 hours a week”, and f they are getting an appropriate rate of DLA Care, PIP Daily Living or Attendance Allowance.

This is the same criteria as for claiming Carer’s Allowance, but you do not actually have to claim CA to qualify. Find out more in the blogs on Benefits for Carers.

The element is worth £160.20 a month, the same as the weekly £36.85 carer’s premium in “legacy benefits” and the carer’s addition in Pension Credit

There are though, some differences in how UC carers element works compared with the carers premium/additions:

It’s good news for working carer:

The fact that you don’t need to claim Carers Allowance means that under UC, you can have a Carer’s Element included. Previously the need to be able to claim Carer's Allowance, wheher or not you coul be paid it got in the way for working carers. CA has an earnings limit of £123 a week , above which you can't even claim it.

It’s bad news for though for carer’s with health issues

You may have your own health or disability issues too whilst being a carer. Under UC, the same person cannot have both a carers element and an LCW or LCWRA Element, added in to the sums. Only the highest of these three elements will be counted. In a couple, tough, one partner might cause an LCWRA Element to be added and the other might have a Carers Element.

Can a carers element affect the benefits of the person I look after?

Finally, there is another twist to the strange world of why in some circumstances it can be better not to claim amounts for being a carer. This is only a concern if the person you look after gets a "severe disability premium" (in the legacy benefits) or a severe disability addition (in Pension Credit). And in the past, one of the conditions for getting that extra amount was that no-one else actually receives Carer's Allowance for caring for them.

However there were situations where a carer might get a carer's premium / addition" without actually being paid the Carers's Allowance. And UC looked to be adding another one in the case of working carers.

However, the rules for the severe disability amounts have now been changed so that either a Carer's Allowance or a UC carer's element stops the extra amount for severe disability. However, if you just get a carer's premium/ addition the severe disability amounts continue to be unaffected. Do check out Carer's benefits blogs or get advice about this complex conundrum.

Housing Cost Element

This is the part that mainly replaces Housing Benefit (HB) - to help pay the rent. However, it can also help with certain owner-occupier charges (ground rent, service charges). The element though no longer helps with mortgage interest payments. Instead, there is a separate Support for Mortgage Interest scheme, that offers loans towards this cost rather than a payment.

Many of the regulations have been copied and pasted across from Housing Benefit, but there are some simplifications and important changes

Rent restrictions

The broad principle is the same as HB. The Housing Costs Element will help you up to the maximum eligible rent in your circumstances, which is not always the same as the rent you are paying. Over the years, the response to rising real rents has been to put increasing restrictions on the rent that can be considered for help from benefits

This depends on the kind of tenancy you have

In the private sector there is a Local Housing Allowance in your area. This has maximum amounts according to the bedroom size of property that your household is allowed. However, under 35s living alone – with several exceptions - are not allowed the rent for a 1 bed self contained home, but only for a room in a shared home. Important exceptions for people affected by cancer include: if you get PIP Daily Living or DLA Care (middle or higher rate), but there is no exception for being a carer.
In the social sector (that’s councils and Housing Associations), rents have usually been below LHA levels. There was less need for controls as you would not be as free to contract for a larger / more expensive property. However, there is what is officially called "removal of a spare room subsisdy" - but is better known as the “bedroom tax” - if you are deemed to now have more bedrooms than you need: the rent eligible for help is reduced by 14% if you have one "excess" bedroom and 25% if you have two or more excess bedrooms. In Scotland anyone subject to bedroom tax can get a DHP (see below) until such time as the bedroom tax abolished.

Sometimes you can be allowed an additional bedroom under both LHA and bedroom tax rules. Do get advice if you face a restriction on how much of your rent can be considered for Housin Costs Element.

Service charges:

Some tenancies – or owner-occupied properties - may come with extra service charges. Some of these can also be covered by your Housing Costs Element

Top ups from Discretionary Housing Payments (DHPs)

If you are left with a shortfall between the amount of the rent you actually have to pay and the amount that the UC Housing Costs Element - or Housing Benefit for those on legacy benefits and Pension Credit - will cover, you can apply for a Discretionary Housing Payment (DHP) to help fill the gap.

This top up is still administered by the same local council who administer Housing Benefit. You apply on the same form whether your help for rent comes via HB or UC

The decision as to whether to award a DHP is mainly a financial one, looking at what other income and expenditure, and so what resources you might have to meet all or some of the rent shortfall yourself. However, your other circumstances may well affect how long the top up may last for. The main idea of a DHP is to tide you over until you can find cheaper accommodation, but if it would be unreasonable to expect you to move (e.g. when ill with cancer and you need to be near support networks or hospitals) then DHPs might be made for a year and renewed after that.

Transitional Element

This Element will not affect you at all if you are coming new to UC. It will only apply to a minority of those who lose out in the switch from the old "legacy benefits" to UC . But for those who can get a Transitional Element it could be rather an important and large part of your UC Maximum.

The Transitional Element, then will be UC's way of honouring the usual principle that "no-one loses at the point of change" .; but only doing so partly

Whether intentions are for a new benefit to be more or less generous than the ones it replaces, the idea has always been that the winners switch to the normal rates of benefits straightaway but that the losers were cushioned from the shock of a drop by an extra transitional amount . This meant that to start with your rates on the new benefit match what you were getting before, but that over time you are frozen at that figure, until the new benefits catch up. You still lose long term, but are cushioned from a big drop.

The new "simpler" UC makes it all more complicated; most people switching over to UC will now not be covered by transitional protection. Transitional protection is not on offer to the majority who will make the switch to UC by means of a natural migration when certain changes of circumstances mean that you have to claim UC. And that is the only way you can switch to UC at the moment and it will continue to be the way many people will switch even when protected "managed migrations" start happening.

A managed migration will be when the DWP write to you and tell you why it is time to switch and about how to do so. At the moment this is happening only in a pilot in Harrogate. It will only be under these switches that you will get the protection that may result in a Transitional Element bein added in to your sums:. Essentially UC will compare:

the monthly equivalent of your "legacy benefits" under the old "legacy benefits"; and
the amount you would get in UC under the normal Standard Allowance and Elements that in your first month on UC

If you lose under the standard UC sums, they will add on a Transitional Element to make up that difference

However, this Transitional Element does not keep you at the equivalent of your old money for ever and a day, Rather it cushions you from an immediate drop. So for example:

as the standard UC rates go up each year
or if you get an increase in your Maximum UC because of a change in circumstances

these increases will just come off your Transitional Element. Only when the Transitional Element has been eaten away totally, will you see any increases in your UC rate.

UC then is different not because of how it does Transitional Protection - it's the same time-honoured sum - but, because it only offers the protection to a minority of "switchers. It also has more ways than past schemes in which you can suddenly lose your protection, for other reasons than increases in your normal UC entitlement wearing it away. For example, if you switch from single to couple claims - or vice versa -, if you lose a job, earn less than your "work conditionality" threshold for too long, then your Transitional Element could stop altogether

Summary of Step 2

Step Two then is about adding up the Standard Allowances and UC Elements to which you and your family might be entitled. The sums themselves are a just a matter of simple adding up. The complications lie in which elements might apply in your situation - there are less of these element under UC but they can be every bit as complicated as the old amounts.

Looking back at some of our examples

The following standard allownces and elements will make up yhe Maximum UC for Dougal, Florence and the Jemal and Jo households:

Dougal, 28 is a single person going through cancer treatments. He also claims New-style ESA and PIP. His maximum UC is made up of:

a standard Allowance (over 25)
an LCWRA element (from the third assessment period after becoming unwell)
a Housing Cost Element towards his rent. As he gets PIP Daily Livin, he can have the rent up to the LHA for a self contained 1 bed flat / kennel

Florence, 24, is Dougal’s friend and main carer, enthusiastically and lives in her own place nearby. Her Maximum UC is made up of

a standard Allowance (under 25s rate, sadly)
a Carers Element, encouragingly (because she helps Dougal who gets PIP Daily Living)
a Housing Costs Element to cover / help towards the rent - but she is restricted to a shared room rent

Jo and Jemal are a couple with three children. The youngest Jasmine has a disability and Jo receives DLA Middle Care for her. Jo is starting treatment for breast cancer. Her Benefits Advisor has also helped Jo claim PIP. Their current UC Maximum amount is made up of

a Standard Allowance (couple rate for Jo and Jemal)
two Child Elements for Jake and Josh (Jasmine as a third child – is not counted)
a child disability addition for Jasmine
a Limited Capability for Work Related Activity Element for Jo
a carer’s element (in respect of Jasmine) - Jemal would need to claim the Carer’s Allowance – or take over any existing claim - for the couple to get a carers element. Unlike under ESA, a Carers Element cannot be included for Jo as a carer, because she gets an LCWRA element.
a Housing Costs Element – towards the rent.

In all these examples you can add up the fixed amounts for the elements, but Housing Costs will depend on the rent they actually have to pay and any rent restrictions. The final total will be their Maximum UC.

This can change as your circumstances do. To keep it simple for the UC computer, your Maximum UC in each monthly assessment period is based on the circumstances that apply on the last day of your assessment period. That may mean you get more or less, than if UC had applied the change from the day it actually happened.

So will this be what I get? Next time...

If you have no other income (that is counted) at all, then this Maximum UC iwill be the amount of UC that you will get after any adjustments.

However, you - or a partner – may well have some other income, whether from earnings, benefits or other sources. Some of this will be ignored or not counted in full. But whatever amount is counted as your assessed income will then be taken off your Maximum UC. So next time, I will take a look at:

how your income is assessed and reaching a total for that under Step 3.
and the slightly easier idea of Step 4 - taking one from t'other . i.e take the total from Step 3 Income away from the total under Step 2 Maximum UC to arrive at the amount of UC due.

Links and further reading

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External links:

Citizens Advice - Universal Credit

Work& Pensions Select Committee Report on the Two Child Limit

Other blogs on UC sums:

UC sums 1: Who counts? How do the sums work?
UC sums 3: Assessing your income and UC due
UC sums 4: Missing elements and pitfalls to avoid

Other blogs on UC

Related blogs

Sickness benefits - starting with: Benefits when off sick 1: An overview

Means tested benefits 4 : Sums made easy