A Universal Credit claimant recently expressed confusion about how participating in a workplace car scheme might affect their benefits. They had opted for an electric car benefit in kind, which reduced their take-home pay. They believed this reduction would lead to an increase in their Universal Credit payments.
Seeking clarity, the claimant reached out for advice but found the responses only added to their confusion. Turning to Reddit, they shared their concerns: “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.”
They also contacted the Universal Credit team, hoping for straightforward answers. However, the case handler’s reply left them uncertain. They questioned whether the car cost would be considered part of their pay, thus reducing their Universal Credit entitlement accordingly.
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To clarify, the Department for Work and Pensions (DWP) confirmed to BirminghamLive that benefits in kind, such as workplace car schemes, are not counted as part of net income. Consequently, these benefits are excluded from the earnings figures used to calculate Universal Credit entitlement.
This means that while the benefit in kind does not increase Universal Credit payments, it also does not decrease entitlement. Any reduction in take-home pay resulting from using workplace benefits will not be compensated by higher Universal Credit payments.
A DWP spokesperson explained: “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.”