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, with a single payment made by the Department for Work and Pensions.
In this podcast, parent adviser Mia talks about Universal Credit, the new benefit replacing existing means-tested benefits.
- 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'.
Other benefits such as Carer's Allowance, Disability Living Allowance, Child Benefit and Council Tax Reductions continue to exist as separate benefits.
You normally need to be at least 18 to claim Universal Credit but special rules allow some 16 and 17 year olds to claim, including many disabled 16 and 17 year olds.
People aged over pension credit age cannot claim Universal Credit and must claim Pension Credit instead. However if you are a couple where one partner is of pension credit age and the other is of working age you will normally be expected to claim Universal Credit as a couple.
Universal Credit has replaced new claims for means-tested benefits in all parts of the UK. This means that if you 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. However if you do decide to make a claim it will also replace any legacy benefits you are already getting.
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.
Disabled adults who have been getting a payment known as the severe disability premium as part of an existing legacy benefit are exempt from Universal Credit and are still allowed to make new claims for other legacy benefits. If you are unsure whether or not you currently get the severe disability premium, check your benefit award letters or call our free helpline for advice.
Common reasons families end up on Universal Credit
If 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 separate 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 claim as a single person, but will have the option of claiming Universal Credit instead. Similar 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. You can claim Universal Credit as a carer 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, most existing claimants who do not try to make a new claim for one of the benefits Universal Credit is replacing will not be affected.
Originally the government's plan was to invite all existing claimants of means-tested benefits and tax credits to claim Universal Credit between 2020 and 2024. They have called this process 'managed migration' onto Universal Credit. Initially only a small sample of around 10,000 claimants was to be migrated between July 2019 and summer 2020. This process was started in the Harrogate jobcentre area in North Yorkshire but has been suspended due to the Covid-19 outbreak. As a result there are likely to be further delays in the roll out of managed migration.
Warning- Unless you are a disabled adult who is exempt, 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 and once you claim Universal Credit you cannot move back onto your old legacy benefits. You can check your likely entitlement to Universal Credit using the benefit calculator on our website.
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. If you are unable to claim online you may be able to claim by phone instead via the Universal Credit Helpline on 0800 328 5644. Once you have lodged a claim you will normally also have to attend an interview in person. However this requirment has been suspended during the coronavirus outbreak.
In part two of our Universal Credit podcast series, our parent adviser Nicos explains how to claim Universal Credit, the new benefit being rolled out across the country.
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.
In this podcast, our parent adviser Nicos explains the document called 'a claimant commitment', which sets out what you need to do to get Universal Credit. This is the third part of our Universal Credit podcast series.
Some groups of claimants are normally expected to look for work in order to be paid (although this requirement has been suspended during the COVID-19 outbreak). 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 our helpline explain more about the claimant commitment.
Getting paid Universal Credit
Universal Credit is normally paid monthly in arrears, although if you live in Scotland or Northern Ireland you should have the option of receiving twice monthly payments instead. You receive one payment per household.
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 normally 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. If you live in Scotland or Northern Ireland you can arrange to have rent payments made directly to your landlord instead.
In England and Wales it is only possible to get more frequent payments, split payments or payments direct to your landlord in exceptional circumstances.
Universal Credit is a means tested benefit. This means that the amount that you get will depend on what other income and savings that you have. It also depends on your individual family circumstances.
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.
You can check your likely entitlement to Universal Credit using the benefit calculator on our website.
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 £92.12 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 £29.55 per week.
If your child is awarded DLA or PIP, or has an existing award increased to the highest rate DLA care component or the enhanced daily living component of PIP, make sure you tell Universal Credit as quickly as you can.
You can get an idea of how much Universal Credit you will qualify for by using the benefits calculator on our website. However please remember that this figure will replace any legacy benefits you already receive such as tax credits or housing benefit.
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 £29.55 per week. Given that the equivalent additional payment under the existing benefits system is £65.52 per week, this represents a cut of £35.97 per week or just over £1,870 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.
You can find out more about this issue and the other reasons why some families with disabled children could be worse off under Universal Credit in our briefing - Universal Credit and Disabled Children.
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 2020-2024. 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. The only exception to this is some disabled adults who have already been moved onto Universal Credit and who previously qualified for a payment known as the severe disability premium. Phone our free helpline for more details if you think this applies to you.
Even if you are someone who receives transitional protection you are still likely to be worse off over time as transitional protection payments will not be uprated with inflation. Some changes in circumstances will also reduce the amount of transitional protection you will receive.
- Sign up to our What's New e-newsletter to receive the latest updates about benefit changes.
- Download our factsheet Universal Credit - the essentials [PDF].
- Download our factsheet Claiming Universal Credit for a young disabled person [PDF].
- Read our page about tax credits.
- Find out about other benefits you might be entitled to.