Sick Pay and Universal Credit

1) What this guide covers

When you are ill or unable to work, you may have to juggle:

• Your employment contract and sick pay rules (for example, statutory sick pay or company sick pay).
• Your claim to Universal Credit (UC). Because UC is based on income and your ability to work, sickness can affect what you get and what you are required to do.
• What you need to tell your employer and the Department for Work and Pensions (DWP) and how to keep your claim correct.

This guide will help you understand:

• Which sick pay you might be entitled to.
• How that interacts with your Universal Credit payment.
• What to do if you cannot work or you are in a complex situation.

2) What is Universal Credit and how sickness affects it

Universal Credit is a monthly benefit payment for people on low income or out of work. It replaces several older benefits.
If you are sick or have a health condition which limits your ability to work, UC has special rules. For example:

• You may still claim UC even if you cannot work right now. 
• The DWP will ask about your health and how it affects your ability to work. You may be asked to fill in a “capability for work” questionnaire. 
• You may be placed into a group where you have fewer or no work-search requirements, depending on how sick you are. 

In short: being sick does not stop you from claiming UC. But you must update your claim and explain how your illness affects your work.

3) Types of sick pay you may get

When you are off work sick, there are several types of pay or benefits that may apply. The main ones for employees in the UK are:

• Statutory Sick Pay (SSP): Paid by your employer if you meet certain conditions (employee, earnings threshold, etc.).
• Occupational or Company Sick Pay: Your employer’s own scheme which may pay more or for longer than SSP.
• Other benefit support, if you are unable to work long-term or your sick pay finishes, you may move to or claim other benefits such as UC or Employment and Support Allowance (ESA). 

If you are self-employed, or your earnings are low you might not get SSP, so UC may be your main support. We’ll cover that further.

4) How sick pay and Universal Credit work together

It is possible to receive sick pay (such as SSP or company sick pay) and Universal Credit at the same time. But there are important rules and things to check:

• Your UC payment may be reduced if your overall income (including sick pay) is above certain amounts.
• You must report any sick pay you receive as part of your claim under “income”. Failing to do this can lead to an over-payment or sanction.
• If your ability to work is limited by illness, the DWP may adjust your claimant commitments (what you must do to look for work). 

Here’s how to approach it in practice:

1. When you are ill, tell your employer and find out if you are eligible for sick pay.
2. Tell the DWP / update your UC journal that you are sick (and if you are off work) so they can decide whether your work-search duties should change.
3. Claim UC as usual (or continue your claim). Include the sick pay you get under “other income”.
4. Check how your UC assessment period works (usually monthly) and how the sick pay affects your payment for that period.

Unlike some benefits, UC is flexible: if you start working again or your sick pay stops, you can report it and your UC will adjust accordingly.

5) If you can’t work: your rights and process

If your illness means you cannot work now (or your work is very limited), you should know:

• You are still allowed to claim UC. When you apply you will be asked whether your health condition limits your ability to work. 
• The DWP may ask you to fill in a “UC50” or capability questionnaire. This helps them decide your status. 
• If you are judged to have limited capability for work and work-related activity (LCW/LCWRA), you will get extra payments as part of UC and your work-search requirements will be reduced or removed. 
• If you are off work but still employed and getting sick pay, your employment contract stays valid (unless ended) and SSP or company sick pay may apply. You still need to report to UC.

Important: Do not assume that being sick means you will automatically stop all UC duties. You still need to follow what your journal says until the DWP confirms otherwise.

6) Reporting sickness, fit notes and your claim

When you are sick it matters what you tell your employer and what you tell the DWP via your UC claim. Here are the key steps:

Tell your employer

Follow your employer’s sickness procedures: notify them, ask about sick pay, send a fit note if required by your contract.

Tell the DWP / Update your UC claim

You must report a change of circumstances if you are unable to work, your health changes, your hours change, or your sick pay starts or ends. Use your online UC journal or call the helpline. 

Fit notes (sick notes)

If you are off work for more than 7 days, a fit note from a GP or other authorised professional will often be required. For UC, if your health condition affects work you may need medical evidence for the capability assessment. 

7) What to do when you get sick pay while claiming UC

If you receive sick pay and still have a Universal Credit claim, here’s what to check and do:

• When making your UC claim or during your monthly assessment period, include the sick pay as other income.
• Check your assessment period (often one month) and see when the sick pay falls into that period. Sometimes you may get sick pay that covers two periods—make sure you report it correctly.
• Your UC payment may go down because the sick pay raises your total income for that period—but you may still get UC if your total income is below your applicable amount (which depends on your household).
• If your sick pay ends, report that change so your UC may rise again (because your income drops).
• If your employer or HMRC corrects your sick pay, tell UC as soon as you know. Mistakes here can cause over-payments or under-payments.

Tip: Keep a record of your payslips, sick pay amounts, fit notes and UC journal updates. It will help if there’s a later discrepancy.

8) How much your UC may be while you’re sick

There’s no single rate for Universal Credit because it depends on your household, savings, rent, income and other factors. However, being sick may affect two main things:

Income effect

If you get sick pay and it makes your monthly income higher, your UC may reduce. On the other hand if you’re earning very little or nothing, you may still get full UC.
Employers’ sick pay, statutory sick pay, and other income count in your UC calculation.

Work capability effect

If you are judged to have limited capability for work (LCW) or for work-related activity (LCWRA), you may get extra elements on top of your UC standard allowance, and your job seeking duties may be relaxed. 

Example scenario:

Jane is on Universal Credit and earns little. She becomes ill and receives statutory sick pay from her employer. Her UC is reassessed for the month when sick pay starts. If her total income is still below the threshold, she may continue getting UC with reduced duties. If the sick pay pushes her income above the threshold, her UC is lower but she still keeps the extra payment for health-limitation until the DWP assess her capability.

9) If you’re not eligible for sick pay or it stops

There are times when you either cannot claim sick pay (e.g., self-employed, earnings too low) or your sick pay period ends. Here’s what to consider:

• If you don’t get statutory sick pay (SSP) because you don’t meet the earnings threshold or you’re not an employee, your UC may cover you more—just report your earnings (or lack of) accurately.
• If company sick pay runs out but you’re still unwell, inform your employer and the DWP. You may need to claim UC (or move from SSP to UC as main support).
• If your health condition lasts long-term and you cannot return to work, you may need to show the DWP that you have limited capability for work and apply for the LCW/LCWRA element. 
• If your sick pay ends completely and you have no other income, your UC may increase—but you must report the change of circumstances promptly.

10) Common questions and mistakes

Here are typical questions people ask—and mistakes to avoid:

Common mistakes to avoid:

• Not reporting your sick pay income in your UC assessment period.
• Assuming you no longer need to update your UC claim just because you are off sick.
• Continuing old job-search or work-prep duties when you have told DWP you cannot work and they have changed your claimant commitments. This mismatch can trigger a sanction.
• Losing track of your fit notes, employer letters or when your sick pay ends. Keep good records.
• Failing to ask for the LCW/LCWRA element when your condition limits your work—this extra payment is built into UC. 

11) Useful UK resources

• GOV.UK – Universal Credit (overview and eligibility)
• GOV.UK – Benefits and financial support if you’re unable to work
• Citizens Advice – Universal Credit if you’re sick or disabled
• MoneyHelper – Universal Credit for sick or disabled people