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Should Graduates Apply for Benefits?

by
Matthew Williams

While you may have envisioned a smooth transition between graduating and beginning your career, the reality is that finding your first job can sometimes take a while. This can cause significant financial strain with internships and part-time work not enough to cover outgoing expenses.

Fortunately, support for graduates is available in the form of Jobseeker’s Allowance (JSA) and Universal Credit. Read on to find out how these graduate benefits can support you while you get ready to start your career.

Why claim benefits?

For some people, claiming benefits of any kind is considered an undesirable thing to do. Graduates should make use of benefits available to them, however.

While self-reliance is admirable, benefits such as universal credit and JSA form a social safety net that most people would agree is good to have. Reliance on this safety net while you look for ways to start your career and no longer need benefits, thereby helping to fund it is a system that should be utilised if necessary.

Not only does applying for benefit support maintain your national insurance record, avoiding gaps that may need to be made up for later on, but it also means you can avoid getting into debt. Applying for jobs in your field can eat up a lot of time, meaning new graduates can often only work part-time hours.

With income low, it can be tempting to apply for loans and borrow cash from friends or family to pay bills, rent, or buy food. Benefits can help avoid this pitfall and keep your debt from mounting up. Benefits can also be used towards clothes, travel, and other expenses associated with finding employment within your chosen field.

Applying for Universal Credit

Universal Credit is a monthly payment issued to help people with the cost of living. This payment is a consolidation of legacy benefits and the amount you receive varies depending on various factors. It is a means-tested benefit, meaning it is based on the amount you earn, rather than your National Insurance contributions and recent employment.

The requirements to receive Universal Credit are:

●      UK resident

●      Aged 18 or over

●      You are under the state pension age

●      You are on a low income or not working

●      Your household savings are less than £16,000

Most graduates will tick all these boxes and are therefore eligible for universal credit. To be sure, you can use the government benefits calculator. In the eyes of the state, graduates are no longer students, even if you haven’t undergone your graduation ceremony. As long the date is past the last date of your course, you are entitled to apply for Universal Credit.

As of 2022, the Standard Amount you receive on Universal Credit is as follows:

Circumstance / Monthly Amount Received

Single & under 25 - £265.31
Single & over 25 - £334.91
Couple and both under 25 - £415.45 (total per household)
Couple and either of you are 25 or over - £525.72 (total per household)

Extra amounts are issued for circumstances such as having 1 or 2 children, and if you have a health condition or disability. For the latest amounts and a breakdown of what you may be entitled to, check here.

There are no limits on the number of hours you can work on Universal Credit if you’re working part-time or as an intern but your payment will reduce the more you earn.

To apply for Universal Credit, you will need your bank details, housing information, income information, and up-to-date records of any savings and investments.

You can apply for Universal Credit here.

New Jobseeker’s Allowance (JSA)

Graduates are also entitled to the New Jobseeker’s Allowance which is a benefit you can receive while actively looking for employment. This unemployment benefit is suitable for graduates who work part-time hours or are unemployed and need financial support while finding suitable roles for their careers.

The eligibility criteria for New Jobseeker’s Allowance are:

●      England, Scotland, or Wales resident

●      Right to work in the UK

●      Unemployed or work less than 16 hours a week (average)

●      Are not in full-time education

●      Capable of full-time work

●      Actively looking for employment

●      Have worked and paid Class 1 National Insurance in the last 2-3 years

For a lot of graduates, the last requirement may prove sticking point with not every university student choosing to work during their studies. For students who took a part-time job while at university, you can check the government’s threshold’s to see if you would have paid Class 1 contributions during this time. For example, the tax year beginning and ending 2021-2022 had a primary threshold of £184, meaning if you earned this much a week during this time you will have paid Class 1 contributions.

Graduates who are eligible for JSA can expect to receive:

JSA Allowance

Circumstance / Weekly Amount Received

Aged 18-24 - £61.05
Aged 25 or older - £77

These amounts change yearly and the latest allowances can be found here.

To apply for JSA click here. You will need your National Insurance number, bank details, and your latest employment information. If you are eligible for JSA, you will then be invited in to attend meetings with a work coach at Jobcentre Plus offices.

Importantly, if you are eligible for both Universal Credit and Job Seekers Allowance, the latter amount you receive is likely to reduce.

Downsides to applying for benefits

Unless impossible to avoid, graduates should consider benefits a temporary form of support while they look for ways into their chosen field or finish their internship.

The amount of money you will receive is typically far lower than you would receive from employment and are not enough to make life as comfortable as you may like. You will also be required to attend in-person meetings that can sometimes cause stress and anxiety. While work coaches aim to help you find full-time employment if enough time has passed they may begin pressuring you to apply for roles outside of your field of expertise or career sector. This can put you in a difficult position where you either have to forego benefits or look for roles that do not make use of your degree.

Conclusion

Nevertheless, Graduates struggling to make ends meet should absolutely apply for any benefits they are entitled to. Whether this is Universal Credit, New Jobseeker’s Allowance, or both, these payments are specifically designed to help and support individuals such as the newly graduated while they look for gainful employment or are unable to work.

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