Universal Credit payments depend on one’s income and personal circumstances. Through this article, we will focus on whether or not a Universal Credit claimant can continue to receive their benefits payments if they quit or resign from a job voluntarily. To understand this in detail we will also explore other key areas of the topic including the other benefits you can claim if you quit your job, how and when to inform the DWP when you get a new job as well as the basic eligibility criteria of Universal Credit and how it is applied to individual claims.

Can I Claim Universal Credit If I Quit My Job?

Yes, you can claim Universal Credit if you quit your job voluntarily. However, it is essential that are able to prove a “good reason” for quitting your job if you want to continue receiving your Universal Credit payments without any deductions from the Department for Work and Pension.

A good reason for leaving your job may include (but is not necessarily limited to) any of the following:

  • constructive discharge from your workplace
  • medical reasons that hamper your output/ability to work
  • better employment at another job
  • facing domestic violence at home
  • to care for a family member

According to Citizen’s Advice, good reasons for leaving your job (that will not affect your Universal Credit) payments include the following:

  • taking voluntary redundancy due to reasonable circumstances
  • weren’t paid according to the National Minimum Wage 
  • did not feel safe due to the lack of health and safety standards in the working conditions 
  • did not feel safe due to fear of being bullied or harassed 
  • worked on  a zero-hour contract

You must be able to provide evidence of the reason that you claim for your resignation. If you are unable to claim a “good reason” for leaving your job and it appears to the DWP that you have voluntarily become unemployed, you will possibly face a sanction on your Universal Credit payments. This means that you will be paid a reduced amount of the benefit for a period of three months before you become entitled to the original amount.

If claimants deliberately refuse a job or an increase in pay to avoid benefits reduction despite agreeing to it in their Claimants Commitment, they may be sanctioned by the DWP.

During this time, the DWP will offer you a “hardship payment” to cover your reduced income. However, should you accept this, you will then face reduced Universal Credit payments in the future.

In addition to Universal Credit, you may also be able to claim certain income-based state benefits while you are unemployed. You may also be eligible for an income tax refund after your resignation and until you are able to find another job.

What Benefits Can I Claim If I Resign From My Job?

If you resign from your job on professional terms and are able to provide evidence for having sound reasons for leaving your workplace, you may be able to claim the following benefits:

  • New Style Jobseeker’s Allowance
  • New Style Employment and Support Allowance
  • Universal Credit
  • Pension Credit

However, there are certain conditions that will apply for each benefit to be claimed. For instance, in the case of JSA, you should be under State Pension age, unemployed or working for less than 16 hours per week. Additionally, you should have made sufficient National Insurance contributions over the recent 2 to 3 years.

In the case of New Style Employment and Support Allowance, all of the above conditions will remain applicable; additionally, the claimant must be able to provide proof of a disability or health condition that has an impact on the number of hours that they are able to work. 

In order to claim Universal Credit, you or your partner are required to be under State Pension age and have saving equal to less than £16,000.

For Pension Credit, both you and your partner should have reached State Pension age. Otherwise one of you should be claiming Housing Benefit for people above the State Pension age.

If you were claiming any other benefits than the ones listed above prior to your resignation, you may be able to continue claiming them as long as you are able to provide evidence of sound reason(s) for leaving your job.

When Do I Tell Universal Credit I Have A Job?

You should inform the Department for Work and Pensions immediately when you have a job, an increase in pay or any other change in circumstances that affect your eligibility criteria or the scale of payments that you receive in the form of Universal Credit (or any other state benefit). 

It is understandable that with a rise in income, you will face a reduction in your benefits. In the case of Universal Credit, for every £1 that you (or your partner earn), 55p will be counted as income during your Universal Credit calculation. While communicating a change to the DWP, you should state your disposable income in such cases, which is the take-home amount after your deduction of taxes, NIC and pension fund from your gross income.

If you or your partner have to take care of a child and one of you has limited capability for work, you may be able to claim a work allowance despite one of the partners having a job. However, if you were taking the help of Universal Credit to pay mortgage interest payments, you will lose that claim once you get a job.

It must be kept in view that your Universal Credit payment does not automatically stop when you get a job. You will continue to receive the benefit, however, the amount will be reduced depending on your wages.

Which Change In Circumstances Affect Universal Credit?

Certain changes in your circumstances can bear an impact on the benefits you receive including Universal Credit. If you hide such facts from the authorities with the intention to avoid a reduction in your benefits, you may be penalised or taken to court. Therefore, it is advisable if you face any of the following situations, you must inform the relevant authorities by signing in to your Universal Credit account

  • a new mobile number, postal or email address
  • a change in your bank details
  • change of residence due to moving in with a partner
  • having a child
  • changes to your health condition
  • being unable to work due to an illness
  • starting to care for a child or disabled person
  • finding or finishing a job
  • changes to your earnings, savings, investments
  • changes to rental payments
  • changes to your immigration status (in case you’re not a British citizen)

What Counts As Income For Universal Credit?

During your benefits calculation by the DWP, not only is your job-related income(s) taken into account, but the authorities will also consider unearned incomes. These are incomes that individuals receive without having to work.  

Unearned incomes that affect your Universal Credit payments include the following:

  • Jobseeker’s Allowance (new style)
  • Employment and Support Allowance (new style)
  • Pension Income
  • Carer’s Allowance
  • State benefits that aren’t replaced by Universal Credit

For every £1 earned through any of the above means, £1 will be reduced from your Universal Credit payments.

However, the following unearned incomes do not count towards Universal Credit calculations:

  • Child Benefit
  • Child Maintenance Payments
  • Disability Living Allowance
  • Personal Independence Payment
  • Income From Boarders And Lodgers.

Which Benefits Are Included In Universal Credit?

Universal Credit has replaced six benefits, referred to as the “legacy benefits” by serving a single payment for households and helping them meet housing and childcare costs. These include:

  • Income Support
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance (JSA)
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

Additionally, it provides support for health conditions, disabilities or the role of a carer that prevents claimants from working full time or working at all.

According to government statistics, there were approximately 5.9 million claimants of Universal Credit in July 2021, out of which 53 per cent were women. 

Who Is Eligible For Universal Credit?

To qualify for Universal Credit, claimants must be able to fulfil the below eligibility criteria:

  • aged between 18 (in some cases it may be 16 or 17) and state pension age
  • unemployed or on low income
  • between the claimant and their partner, total savings are less than £6,000
  • experiencing high costs for childcare
  • suffering from a disability or health condition
  • caring for someone else

The amount of Universal Credit that an individual receives depends on their personal circumstances and income (if any). For instance, someone who is single and younger than 25 years of age will be eligible for Universal Credit amounting to around £257 per month. Meanwhile, this amount will rise to around £509 for someone who is living with a partner and either one of them or both of them are above the age of 25.

Conclusion:

Through this article, we’ve learnt that claimants of Universal Credit can continue receiving their benefits payments even after quitting their job. However, they must be able to state a “good reason” for leaving their job and provide concrete evidence to support their claim. If the DWP finds out that the claimants have deliberately reduced their income to increase their benefits, the claimants is going to be sanctioned by them for three months.

FAQs: Can I Claim Universal Credit If I Quit My Job?

What am I entitled to if I quit my job?

From your employer, you can expect to be paid in full up to the last day of your employment, as well as any benefits that you were entitled to but did not claim such as holiday pay. In case of state benefits from the DWP, you will be entitled to  New Style Jobseeker’s Allowance, New Style Employment and Support Allowance, Universal Credit and Pension Credit.

What happens if I walk out of my job in the UK?

If you walk out of your job without due reason, your employer can file a court case against you for damages/financial losses caused by your sudden departure from the company. You may also not be able to claim the full amount of state benefits in this case.

Can I resign with immediate effect in the UK?

Unless your employment contract states that there are no notice provisions, resigning with immediate effect may not only lead to forfeiture of financial dues from your employer but also a reduced amount of benefits claim from the state.

Does an employer have to give written notice of termination in the UK?

Depending on the nature and reason for the termination of an employee, an employer can choose to give written notice or not. In case of severe circumstances, they may announce immediate dismissal of the employee without the payment of any financial dues.

Can I be taken to court for not working my notice?

In the rare occurrence that an employer insists on an employee who has resigned from their job to serve their notice, they can be taken to court for not completing their notice period especially when it is clearly stated in their employment contract.

References:

Universal Credit and you – GOV.UK

Can I claim Universal Credit if I leave my job voluntarily?

Deciding whether to resign – Citizens Advice

Being made redundant: finding work, claiming benefits and managing debts – GOV.UK

Deciding whether to resign – Citizens Advice

Will I lose out on benefits if I leave my job voluntarily

Universal Credit: Report a change of circumstances – GOV.UK

Getting a job and Universal Credit

Understanding Universal Credit – How earnings affect Universal Credit

Universal Credit explained | MoneyHelper

Council tax reduction for working-age people on Universal Credit | Council tax reduction for working-age people on Universal Credit.

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.