Universal credit


What is Universal Credit?

When will I be expected to claim Universal Credit?

Making a claim for Universal Credit

How will Universal Credit be calculated?

Will Universal Credit be less generous than other benefits?

Related information

What is Universal Credit?

Universal Credit is a new benefit for people of working age. It is paid both to people who are out of work and to those in employment. It is replacing most of the current means-tested benefits for people of working age.

 
What benefits is Universal Credit replacing? 

  • Income support
  • Income-based Jobseeker's Allowance
  • Income-related Employment and Support Allowance
  • Child tax credit
  • Working tax credit
  • Housing benefit

These are known as the 'legacy benefits'.

Listen to an adviser from our helpline explain what Universal Credit is.

 

 

When will I be expected to claim Universal Credit?

New claims by families with disabled children

Universal Credit has now replaced new claims for means tested benefits in all parts of the UK. If you have more than two dependent children and try to make a new claim for one of the legacy benefits that Universal Credit is replacing, you will be told that this legacy benefit no longer exists for new claimants. You will also be told that you have the option of claiming Universal Credit instead.

It is up to you whether you claim Universal Credit or not. If you do decide to make a claim it will also replace any legagcy benefits you are already getting.      

From 1 Feb 2019, the government plans to scrap the rule exempting families with three or more children from claiming universal credit. 

In June 2018, the government announced that disabled adults in receipt of a payment called the severe disability premium will also be excempt from claiming Universal Credit. Seek further advice if this applies to you. 

If someone in a full service area already gets income-related Employment and Support Allowance (ESA) or Jobseeker's Allowance (JSA) but makes a new claim for contributory ESA/JSA, their income related ESA/JSA award will be abolished and a claim for Universal Credit may be needed instead. 

Common reasons families end up on Universal Credit

If you have less than three dependent children and your circumstances change so that you try to make a new claim for a legacy benefit you will be told that benefit no longer exists for new claimants . You will be told that you can claim Universal Credit instead. For example: 

- If you are an existing tax credit claimant but seperate from your partner, you will be told that your couples claim for tax credits must end. Unfortunately you will not be able to make a new tax credits as a single person, but will have the option of claiming Universal Credit instead. Similiar rules apply if you currently claim tax credits as a single person and start to live with a new partner. 

- If you are a renter who gets housing benefit and you move to a new tenancy in a different council area, your current housing benefit claim will end. You will not be able to make a new claim for housing benefit from your new council but will be told that you can claim Universal Credit towards the rent at your new tenancy instead. The situation is different if you move to a new tenancy in the same council area - that should be treated as a review of an existing housing benefit claim, so housing benefit should still be paid at your new address.  

- If you are have been getting income based job seeker's allowance and start to get DLA care component for your child at the middle or highest rate, you may wish to stop job-seeking and to claim income support as a full time carer instead. However you will be told that it's not possible to make a new claim for income support anymore. You can claim Universal Credit instead if you want. 

Some people can be left worse off after claiming Universal Credit so it is always worth getting advice before making a claim. 

Only new claims for the means tested legacy benefits are affected by the introduction of Universal Credit. It will still be possible to make new claims for other non means tested benefits and for a council tax reduction.  Making a new claim for Disability Living Allowance, Personal Independence Payment or Carer's Allowance will not lead to any expectation that you claim Universal Credit. Neither will notifying the tax credits office that you have been awarded DLA for your child. This is because this will be treated as a review of an existing tax credit claim and not as a new claim. 

Universal Credit rollout to existing benefits claimants

For the time being, existing claimants who do not try to make a new claim for one of the benefits Universal Credit is replacing will not be affected.

However, between July 2019 and March 2023 the government intends to invite all existing claimants of means-tested benefits and tax credits to claim Universal Credit. They have called this process 'managed migration' onto Universal Credit.

Warning- If you have more than two dependent children, there is nothing preventing you from opting to move from your existing means-tested benefits onto Universal Credit. However, this may not be a good idea as many families with a disabled child will be worse off under Universal Credit.


Making a claim for Universal Credit

In most cases you need to make a claim for Universal Credit online. In order to do this you will first need to set up an online account via the www.gov.uk website.

The Department of Work and Pensions (DWP) won't normally write or phone you about your Universal Credit claim. Instead they will send you messages via your online account, so you will need to check this regularly to see if there is anything they have asked you to do or any information that they have asked you to provide.

Listen to an adviser from our helpline explain how you make a claim for Universal Credit.

 

 


The claimant commitment

In order to be paid Universal Credit you will need to sign a 'claimant commitment' - this is an agreement between Jobcentre Plus and you, setting out what steps you need to take in order to be paid Universal Credit.

Some groups of claimants will need to look for work in order to be paid. Others, including many - but not all - full-time carers will be exempt from having to meet any work-related requirements.

Listen to an adviser from Contact a Family's helpline explain more about the claimant commitment.

 


Getting paid Universal Credit

Universal Credit is normally paid monthly in arrears, and there is usually a wait of at least six weeks before you will get your first payment. If this delay causes you hardship you can ask for a 'short term benefit advance'. This is a discretionary loan that needs to be repaid to the DWP from your future payments.

If you are renting a property then any help you get with rent will be paid to you rather than your landlord. This means that you will have to pass on part of your Universal Credit payments to your landlord to avoid falling into rent arrears.

How will your Universal Credit be calculated?

The calculation starts with a 'maximum amount' of Universal Credit you would get depending on factors such as your family size, caring responsibilities, housing costs and childcare costs.

The amount of Universal Credit you will receive is reduced depending on what other income you have coming in.

  • Earnings above certain levels will reduce your Universal Credit award.
  • Other types of income will also be deducted from your Universal Credit award unless specifically disregarded (for example, both Disability Living Allowance and child support maintenance are ignored).
  • Universal Credit will be reduced if you have capital above £6,000 and cannot normally be paid if your capital is above £16,000. 


Child disability addition for families with a disabled child

As part of the maximum amount calculation, a child disability addition is included for each dependent child in your family who gets Disability Living Allowance (DLA) (or Personal Independence Payment (PIP))

This is paid at one of two rates. The higher rate of £86.34 will be awarded for a child who:

  • Is registered blind.
  • Gets the highest rate of DLA care component.
  • Gets the daily living component of PIP at the enhanced rate.

All other children on DLA or PIP will qualify for the lower rate of the addition. This will only be £29.10 per week.

Will Universal Credit be less generous than current benefits?

Contact is worried that many families with a disabled child will be worse off under Universal Credit. This is particularly likely if you are an out of work family with a disabled child who does not qualify for the higher disability addition.

This is because the lower rate of the child disability addition is set at £29.10 per week. Given that the equivalent additional payment under the existing benefits system is £62.86 per week, this represents a cut of £33.76 per week or just over £1,750 per year. Since the child disability addition is paid for each disabled child, those families with two children on the lower addition could lose twice this amount.


Won't families be transitionally protected to make sure they won't lose out under Universal Credit?

The government has said that it will transitionally protect some existing claimants. However, this will only apply to existing claimants with no changes in their circumstances who are moved onto Universal Credit by the government as part of 'managed migration' between 2019-2023. These families will be able to receive top-up payments to ensure they are no worse off under Universal Credit.

However, if you are someone who has to claim Universal Credit because you have had a change of circumstances and tried to claim one of the legacy benefits, you will not get any transitional protection.

This means that all those families in full service areas claiming Universal Credit between now and July 2019 will not be transitionally protected.

Related information

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