Universal Credit mistake that could see you miss out on share of £730million underclaimed benefits – how to avoid it
UNIVERSAL credit claimants should be aware of this mistake that could see them loose out on a multi-million pound share of unclaimed benefits.
New figures released by the Department for Workplace and Pensions (DWP) revealed the most common reason people are not getting what they are entitled to.
Households not flagging an increase to their rent was the leading reason £730million worth of benefits has been left unclaimed over the last year.
The findings were published in the departments annual report for the year ended March 31 2024.
The rate of people not claiming benefits came in a 1.4%, the exact same reading as the year before.
The report read: "The rate of unfulfilled eligibility remained at 1.4% in 2023 to 2024, the same as 2022 to 2023, with a financial value of £730million, compared to £610million the previous year.
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"The largest source of unfulfilled eligibility in UC for 2023 to 2024 was for housing costs, due to claimants failing to report increases in their rent, and accounting for around 0.5%."
It comes as many households are struggling to make ends meet across the cost of living crisis.
Rental costs have also shot up over the past year due to increased utility costs and a shortage of affordable housing.
You should inform the DWP if your housing circumstances change as you may be entitled to extra help.
If you’re already eligible for Universal Credit you can get help towards your rent and some service charges.
You can inform the DWP of the changes to your increased rent by logging into your account online going to the 'Home Page' and then clicking the box which says 'Report A Change'.
There should be a step by step guide you can follow which will let you inform the department of the changes to your rental costs.
If you get confused it always worth giving them a ring and they should be able to inform you of the process.
It also worth noting that if you rent privately your benefits may not always increase.
This is because they are often based on your local housing allowance rate (LHA).
The LHA is not a separate benefit but instead a rate that works out how much help you can get when your are renting from a private landlord.
It was increased for the first time after four years in April 2024.
How much you get depends on how many people live in your home, rent levels in your area and if you have any dependants.
For example, someone renting a two bed flat in Neasden, North West London would get £412.86 per week in support.
However, someone living in a two bed flat in Bolton would get around £115 per week in support.
This is because rental costs in London are much higher than the rest of the UK.
Entitledto's determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
He said: "Benefits are complicated, and changes to the system alongside a reduction in government funding mean that people are often unaware of what they are entitled to year on year.
"With £730m in benefits going unclaimed, people are missing out on vital funds which could prove a lifeline."
Can you be over paid in benefits?
While it is important to make sure you are getting what you are owed there is also a risk you could over claim on benefits and have to pay it back.
An overpayment can happen for many reasons, for example because:
- The benefit office made a mistake
- You didn’t know you had to tell the benefit office about a change of circumstances that meant you were entitled to less benefit or should stop getting a benefit
The DWP will usually get in contact with you to inform you of the mistake.
What happens if I'm asked to repay benefits?
If you are asked to make a repayment, this will be done in different ways, Turn2Us says:
- Making deductions from your benefit payments
- Taking it out of benefits that are owed to you
- Taking amounts directly out of your wages
- Getting a court order for debt recovery
The amount taken will depend on how much you owe and if you're still getting benefits.
You can ask the DWP to reduce the amount you are paying back each month.
The DWP can take you to court if you don't repay.
If you can't afford to repay you can ask Citizen's Advice for help.
If you don't think you've been overpaid and the request for repayment is an error, you can ask for the DWP to look at it again.
You should keep your contact details up to date so the DWP can get hold of you and you don't miss any demands.
Changes to Universal Credit
Universal Credit is replacing six benefits under the old welfare system, commonly called legacy benefits. They are:
- Working Tax Credit
- Child Tax Credit
- Income-based Jobseeker's allowance
- Income support
- income-related employment and support allowance
- Housing Benefit.
If you're on any of these benefits now, you can choose to move over - but you might not be better off.
You should consider carefully what moving over means for your money, as you can't move back once you're on Universal Credit.
Using an online benefits calculator can help you compare and are free and easy to use from charities such as Turn2Us and EntitledTo, and it's also worth asking them for advice.
You may be moved over to Universal Credit if you have a change in circumstances, like moving home, a change in working hours or a have a baby.
But eventually everyone will be moved over to Universal Credit.
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This is known as "managed migration".