Universal Credit
13 mins read
This advice applies across the UK.
Universal Credit is a benefit for people of working age to help with living costs. You might be able to claim Universal Credit to top up your earnings, or if you’re out of or unable to work.
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What is Universal Credit?
Universal Credit is a benefit for people of working age to help with living costs. You might be able to claim Universal Credit to top up your earnings, or if you’re out of or unable to work.
Universal Credit has replaced a number of benefits called the “legacy benefits”. The process of transferring claimants of these benefits to the new system (known as managed migration) is now complete.
Universal Credit has replaced claims for Child Tax Credit, Working Tax Credit, Income Support, Income-based Jobseeker’s Allowance and Income-related Employment and Support Allowance.
Most claimants of Housing Benefit have moved onto Universal Credit through managed migration and will receive the housing element of Universal Credit instead. It is still possible to make a claim for Housing Benefit if you live in some temporary or supported accommodation.
Other benefits such as Carer’s Allowance, Disability Living Allowance (DLA), Child Benefit and Council Tax Reduction continue to exist as separate benefits.
Eligibility
Most people of working age can claim Universal Credit so long as their income and capital are low enough. You can claim if you are in work as well as if you are a jobseeker, an unpaid carer, or someone who is unfit to work.
Income and capital
There is no set amount that qualifies as a “low income” – it depends on your circumstances. You cannot normally claim Universal Credit if you have capital of £16,000 or more. Capital includes not only savings, but also things like premium bonds, stocks and shares and the value of a property you own but do not live in.
Seek advice if your capital above £16,000 was ignored when moving from tax credits to Universal Credit and you are still receiving Universal Credit payments)
Age and residence
You normally need to be at least 18 to claim Universal Credit. Special rules allow some 16 and 17 year olds to claim, including some disabled 16 and 17 year olds. But it is harder to get Universal Credit if you are still receiving education.
People aged over pension credit age cannot claim Universal Credit and must claim Pension Credit instead, though different rules apply where one partner is of pension credit age and the other is of working age.
You must meet certain tests linked to your residence and presence in the UK.
The claimant commitment
In order to get Universal Credit, you’ll need to sign a “claimant commitment”. A claimant commitment is an agreement between Jobcentre Plus and you. It sets out what steps towards moving into work you need to take in order to receive Universal Credit.
This will depend on which of the following four claimants groups you’re in, based on your circumstances.
If you fail to meet the conditions in your claimant commitment, your benefit payments are likely to be ‘sanctioned’ (cut for a period). If you are not sure what conditions apply to you or you’ve been sanctioned, seek urgent advice. Call our helpline or find an independent adviser in your area.
1. No work-related requirements
People in this group are exempt from having to take any steps to look for work. This group includes the parent with the main responsibility for a child aged under one; severely disabled people; and many full-time carers for disabled people.
2. Work-focused interview only
People in this group do not have to look for work. But they do need to attend periodic interviews to find out about employment and training opportunities in their area. This group includes the parent who has the main responsibility for a child aged one and some foster parents.
3. Work preparation
People in this group don’t need to look for work, but they must take steps to help prepare them for moving into work. For instance, taking part in training courses or undertaking work experience. It includes people with less severe disabilities and the parent with the main responsibility for a child aged two.
4. All work-related requirements
People in this group are deemed fit and ready for work, and they must be actively looking for work to receive Universal Credit.
Universal Credit and disabled students
There are particular rules that mean most people receiving education cannot claim Universal Credit. There are three main groups of students who may still be able to get Universal Credit in education.
These are:
- Certain groups of students who are exempt from the normal restrictions. This includes any student with a dependent child and some disabled students who meet specific tests.
- Part-time students.
- Some young people who remain in non-advanced education beyond the August after their 19th birthday.
The rules are extremely complex. Read our full webpage, below, or call our free helpline for detailed advice.
Universal Credit and carers
Many full-time carers – but not all – on Universal Credit are exempt from having to meet any work-related requirements. Usually this depends on providing at least 35 hours’ are a week to someone on a “qualifying disability benefit”.
If you’re caring for someone who doesn’t get a qualifying disability benefit, you are likely to have to look for work. There may also be complications if you are a couple who both care full-time for the same disabled child.
Visit our page below for detailed information about which carers are exempt from work, and what to do if you are a caring couple on Universal Credit.
How much will I get?
Universal Credit is a means-tested benefit. This means that the amount you get will depend on what other income and savings you have. It also depends on your individual family circumstances.
You can get an idea of how much Universal Credit you will qualify for by using our benefits calculator.
Standard allowance
The calculation starts with a standard allowance. This is paid to you either as a single person or as part of a couple. It’s paid at a reduced rate if you (and your partner if you have one) are under 25.
Extra amounts
Depending on your family circumstances, you might then receive extra amounts on top of your standard allowance.
These include a:
- Child disability addition for families with a disabled child.
- Child element.
- Carer element.
- Limited capability for work and work-related activity element.
- Housing element.
- Childcare element.
- Transitional element.
Read more detail about these extra amounts on our webpage below.
Income and capital-based deductions
You’ll now have a “maximum amount” calculation based on your standard allowance and any extra amounts you’re eligible for. The DWP will then work out how much to deduct from your maximum amount based on your earnings and other income and capital.
How working affects Universal Credit
There are no rules about how many hours you can work. Instead, the amount of Universal Credit you receive gradually reduces as you earn more.
If you have a dependent child, or you are a disabled person with a limited capability for work, an initial amount of earnings is ignored. This is known as your “work allowance”, and it depends on your circumstances.
Your Universal Credit payments then reduce by 55p for every £1 you earn above your work allowance. (Or from nil, if you do not get a work allowance).
Some self-employed people will be assumed to have a minimum amount of earnings, equal to the minimum wage for the number of hours they say they are working. This does not apply to anyone in the ‘no work-related requirements’ group, including many full time carers. It also doesn’t apply during the first 12 months of starting a new business.
How other income and savings affect Universal Credit
Unearned income will also reduce your Universal Credit award. You’ll lose £1 from your Universal Credit for every £1 of unearned income you have.
Some unearned income is ignored, including DLA, PIP, Child Disability Payment, Adult Disability Payment and child maintenance support. Carer’s Allowance does count as unearned income for the purposes of your Universal Credit award.
You normally can’t get Universal Credit if your capital is above £16,000. If you moved from tax credits to Universal Credit under the managed migration rules, any capital you had above £16,000 could be ignored for up to 12 months from your date of migration. This disregard period should no longer apply to any claimants of Universal Credit. Seek advice if you have capital that was disregarded under this rule and you are still receiving payments of Universal Credit.
If your capital is between £6,000 and £16,000, you’ll be treated as having £4.35 per month income for every £250, or part of £250 you have above £6,000.
Final Universal Credit award
Once the DWP have deducted any earnings or other income from your Universal Credit calculation, the amount remaining is what you should receive in Universal Credit.
Some claimants may find that the amount they get is lower due to the household benefit cap. However, others are exempt from the benefit cap. This includes if you have a child on DLA, PIP (or their Scottish equivalents) or you are eligible for the carer element in your Universal Credit award.
Transitional protection
If you were moved to Universal Credit from a legacy benefit through managed migration and were worse off under the Universal Credit system, you should be eligible for transitional protection. This is a payment to ensure you are no worse off at the point when you claim Universal Credit.
Families who are transitionally protected may find that they are worse off over time as transitional protection payments are eroded by certain changes in circumstances and as the other elements of your benefit are uprated each year.
You will not receive transitional protection if you make a claim for Universal Credit for the first time, If you have certain changes of circumstances such as claiming as part of a new couple, or if you have separated from your partner this will bring your payments of transitional protection to an end.
Read more transitional protection payments.
Backdating the disabled child and carer elements
Sometimes there can be a delay in the Universal Credit service finding out that you are eligible for a disabled child addition or carer element. This means there will be a period in which you get Universal Credit, but your award is missing the additional elements. The law says that the extra payments can in most cases be backdated, i.e. paid from an earlier date.
This should happen so long as you met all the rules during the period since the qualifying disability award started AND your child’s award started after your Universal Credit. In these circumstances, the carer element should be backdated, even if there was a delay in telling Universal Credit about the fact that you were a carer.
If the Universal Credit office tries to argue that they can’t backdate the carer element in full, read our advice page on this issue.
How to claim
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. Call the Universal Credit Helpline on 0800 328 5644 (0800 012 1331 in Northern Ireland).
The DWP won’t normally write or phone you about your Universal Credit claim. Instead, they will send you messages via your online account. Check this regularly to see if there’s anything they’ve asked you to do or any information they’ve asked you to provide.
Getting a decision on your claim
Jobcentre Plus will send you an email or a text asking you to check your online account. There you’ll find a copy of the decision, including a breakdown of your Universal Credit award calculation.
How will I receive Universal Credit?
You’ll receive one payment per household, normally paid monthly in arrears. If you live in Scotland or Northern Ireland, you should have the option of receiving twice-monthly payments instead.
There is usually a wait of at least five weeks before you’ll get your first payment. If this delay causes you hardship, you can ask for an advance payment. This is a loan that you’ll need to repay to the DWP from your future payments.
If you rent a property, any help you get with rent will normally come to you rather than your landlord. You’ll 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.
In England and Wales it is only possible to get more frequent payments, split payments or payments direct to your landlord in exceptional circumstances. You can ask the DWP to consider this, but your chances of them agreeing will depend on your circumstances. Guidance suggests some groups will get higher priority for alternative payments. This includes if you have severe debt problems, mental health needs, or you’re a family with multiple and complex needs.
If your circumstances change
Your Universal Credit award is based on your circumstances and income over an assessment period of one month.
The date of your assessment period depends on when you first claimed Universal Credit. For example, if your date of claim was 9 March, your assessment period runs from the ninth of each month until the eighth of the following month.
You must notify the DWP of any changes in your circumstances that might affect your award. There is a penalty of £50 if you fail to do so without good cause.
If you have a change that means you qualify for lower Universal Credit payments, that change is always treated as if it happened at the start of your monthly assessment period. If you have a change that means your Universal Credit award increases, that too can be treated as if it happened at the start of the month. But this is only if you tell the DWP about it before the end of your assessment period.
Employed workers don’t normally need to tell the DWP about changes in earnings. This is because your monthly earnings should automatically be notified to the DWP via HMRCs “real-time information” system. However, if you are self-employed, you will need to report your profits every month.
See our page on changes in circumstances for more information about situations that might affect your benefit claims.
Related information
Factsheet: Universal Credit – the essentials
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