Entitlement to Universal Credit following a divorce

One of the sad realities of divorce is that a household that enjoyed a moderate income whilst married, will now need to be divided in order for two households to be supported. This may leave one, or both, parties in a position where they need state benefits in order to support their needs. 

The court will be aware of a party’s entitlement to universal credit and other benefits when assessing their future income needs, even if they are not already claiming the benefits. The income from the benefits can be used to support an argument that a parties ‘needs’ are adequately met. 

However, a party will not be eligible for universal credit if they have over £16,000 in savings. Therefore, if the court make a lump sum award following a divorce, this may impact the party’s entitlement to universal credit in the future. The restrictions on the eligibility criteria can be easily triggered, so a person should seek advice prior to agreeing any form of financial settlement

There is no set income threshold where a person stops being eligible for Universal Credit - it depends on the situation. There are complex calculations that assess a person’s income and outgoings including childcare costs, rent, other liabilities, spousal maintenance, savings and investments, and many other factors. 

If you would like any further information or advice in relation to finances following a divorce, please contact our specialist family lawyers: Mark Vandaele on 01902 796930 (mvandaele@georgegreen.co.uk) at our Wolverhampton office or Rachel Baker on 01384 340 580 (rbaker@georgegreen.co.uk) at our Cradley Heath office.