A Universal Credit claimant was confused about whether a workplace car scheme would affect their benefits. They said the 'benefit in kind option' would reduce their take home pay, which they understood would 'lead to higher' Universal Credit payments.
After seeking advice on the matter, they said it had 'created more confusion', and had turned to Reddit for help.
Claimant's Question
The Reddit user said: "I have an electric car benefit in kind option at work and was wondering how this works with Universal Credit as it reduces my take home pay, leading to higher Universal Credit being paid - which doesn't really seem right. If it is then fair enough, but I just want to be sure. I called the Universal Credit team and the response the case handler has given has created more confusion. Will the car cost be considered as a part of my pay and then my Universal Credit reduced accordingly? That's what I'm assuming based on their reply, but somewhere else on Reddit I've seen other advice around this."
DWP Response
The Department for Work and Pensions (DWP) told BirminghamLive that benefits in kind were not considered part of net income, and therefore not included in the earnings figure used to calculate Universal Credit entitlement. It said while benefits in kind would not reduce a claimant's Universal Credit entitlement, they also would not increase it. Any reduction in take-home pay as a result of a benefits in kind arrangement would not be offset by higher Universal Credit payments.
A spokesperson said: “Universal Credit is designed to make work pay, and we want claimants to feel confident that taking up workplace benefits will not negatively affect their entitlement. Benefits in kind are not considered part of net income and are therefore not included in the earnings figure used to calculate Universal Credit entitlement.”
