Universal Credit

20 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.

In this article

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.

New claims for Universal Credit

Universal Credit replaces new claims for the following existing means-tested benefits:

These are known as the ‘legacy benefits’. If you have never claimed any of these means-tested benefits before and want to do so, you need to claim Universal Credit instead.

Other benefits such as Carer’s Allowance, Disability Living Allowance (DLA), Child Benefit and Council Tax Reduction continue to exist as separate benefits. Notifying the tax credits office that your child gets DLA or the Scottish Child Disability Payment will not lead to having to claim Universal Credit either. They will treat this as a review of an existing tax credits claim, not as a new tax credits claim.

Moving to Universal Credit from legacy benefits

If you currently claim one of the legacy benefits Universal Credit is replacing, there are three ways in which you could be moved to Universal Credit.

Firstly, you may already get a legacy benefit and have a change in circumstance that means you want to make a new claim for a different legacy benefit. In this case, you will need to make a claim for Universal Credit instead. This is known as “natural migration” to Universal Credit.

Secondly, you might volunteer to claim Universal Credit because you believe that you’ll receive more income on Universal Credit than by staying on your legacy benefits.

Lastly, the Department for Work and Pensions (or Department for Communities in Northern Ireland) can also ask you to claim Universal Credit even though you have had no change in circumstances and have not volunteered to claim. This is called “managed migration”.

For more information, read our webpage on moving onto Universal Credit.

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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.

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). The only exception to this is if you are someone who is moving from tax credits to Universal Credit under the managed migration rules. If this applies to you, any capital you have above £16,000 can be ignored for up to 12 months.

You normally need to be at least 18 to claim Universal Credit. Special rules allow some 16 and 17 year olds to claim. This includes some disabled 16 and 17 year olds, though 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. 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.

Claiming Universal Credit in education

Most people receiving education cannot claim Universal Credit unless they have a dependent child.

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. We suggest you read our full webpage, below, or call our free helpline for detailed advice.

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Universal Credit for young people in education

Read more about the rules around claiming Universal Credit in education.

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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

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).

If you’ve received a migration notice as part of the managed migration process, you can also claim via phone. Call the special Universal Credit Migration Notice Helpline on 0800 169 0328 (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.

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.

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 under 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.

Warning: If you fail to meet these conditions, your benefit payments are likely to be ‘sanctioned’. (This means cut for a period). If you’re not sure what conditions should apply to you, seek urgent advice from our helpline or an independent adviser in your area. You should also seek urgent advice if you have been sanctioned.


Do I need to look for work if I care for a disabled child?

Many full-time carers – but not all – on Universal Credit are exempt from having to meet any work-related requirements. This includes most carers providing 35 hours or more care per week to someone on a “qualifying disability benefit”.

The list of qualifying disability benefits includes:

  • The daily living component of PIP.
  • The care component of DLA at the middle or highest rate.
  • The care component of the Scottish Child Disability Payment at the middle or highest rate.
  • The daily living component of the Scottish Adult Disability Payment.

You’ll still need to sign a claimant commitment. But this document shouldn’t include any requirement that you look for work or training. Instead, it will only cover things like your responsibilities to notify the DWP of any changes in your circumstances.

If you’re caring for someone who doesn’t get a qualifying disability benefit, you are likely to have to look for work. Unfortunately, this includes where you are looking after someone awaiting a decision on a disability benefit claim. You may be able to place some restrictions on the amount of work you need to look for – seek advice.

Couples who provide full-time care

There may be complications if you are a couple who both care full-time for the same disabled child. Unfortunately, only one of you will automatically fall into the no work-related conditions group. So if you are exempt from work conditionality as your child’s carer, your partner will usually be expected to look for work.

DWP staff do have the power to exempt them from this. They can do this if they accept that your partner is also providing 35 hours or more care a week to your disabled child and that it would be unreasonable to expect your partner to look for any work alongside these caring responsibilities. This power is found at Regulation 89 (1)(b) of the Universal Credit Regulations 2013. It is also covered in the DWPs own staff guidance at paragraph J2055 of the Advice for Decision Making.

If you are a couple with more than one disabled child, both you and your partner can be automatically exempt from any work-related conditions. This is on the basis that you each care for a different child.

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?

Universal Credit is normally paid monthly in arrears. 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 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.

How much Universal Credit 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. Please remember that this figure will replace any legacy benefits you already receive, such as tax credits or housing benefit.

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 element.
  • Childcare element.
  • Housing element.

Read more about each of these below.

More about the extra amounts you might receive


Disabled child addition for families with a disabled child

You’ll receive a disabled child addition for each dependent child in your family who gets either:

  • DLA.
  • PIP.
  • The Scottish Child Disability Payment or the Scottish Adult Disability Payment.

The disabled child addition is paid at one of two rates. You’ll receive the higher rate of £487.58 per month for a child who either:

  • Is registered blind.
  • Gets the care component of DLA or Child Disability Payment at the highest rate.
  • Gets the daily living component of PIP or Adult Disability Payment at the enhanced rate.

All other children on one of the disability benefits mentioned above will qualify for the lower rate of the addition. This will only be £156.11 per month.

If your child receives a new disability benefit award, or has an existing award increased to the highest rate of the DLA care component or of the PIP enhanced daily living component, make sure you tell Universal Credit as quickly as you can.

Getting the disabled child addition backdated

Unlike tax credits, the disabled child addition in Universal Credit can usually be backdated in full. This remains the case even if there was a delay in telling Universal Credit about your child’s disability benefit award.

Arrears should be automatically backdated to whichever is the most recent of either:

  • The date your Universal Credit claim started.
  • The date your child’s qualifying disability benefit started.

If the Universal Credit office tries to argue that they can’t backdate this payment in full, read our advice page on this issue.

Child element

You get an extra amount known as a child element for each dependent child in your family. This may be paid at a higher rate for your eldest child.

You will not receive a child element for a third or subsequent child born on or after 6 April 2017. There are some exceptions to this “two child policy”.

You can continue to receive child elements (and a disabled child addition) for your son or daughter until the 31 August after their 19th birthday so long as they remain in full-time non advanced education, Payments will end sooner if they leave full time non advanced education or if they start claiming Universal Credit in their own right as a young adult.

Carer element

You’ll receive this if you are eligible for Carer’s Allowance or if the only thing that stops you from qualifying for Carer’s Allowance is that your earnings are too high. You do not actually need to have claimed Carer’s Allowance. It is sufficient that you meet the normal Carer’s Allowance rules, other than the earnings limit.

What this means in practice is that you should qualify for a carer element if you meet all of the following rules:

  • You are aged 16 or above.
  • You care for someone on a ‘qualifying disability benefit’ such as the care component of DLA at the middle or highest rate, the daily living component of PIP at any rate or their Scottish equivalents.
  • You provide at least 35 hours a week care to that disabled person.
  • You are not in full-time education.
  • You meet certain tests linked to your immigration status and length of stay in the UK.
  • You do not already receive a limited capability for work related activity component in your Universal Credit award.
  • No one else is already claiming as a carer for the same disabled child/young person.

If you think you may be eligible for a carer element, inform the DWP via your online Universal Credit account. Where you and your partner care for different people, you may be able to get two carer elements.

If the person you look after lives independently, getting a carer element could affect their benefits. Seek further advice from our helpline.

Getting the carer element backdated

It’s possible to get the carer element backdated to the date that your child was awarded a qualifying disability benefit.

This should happen so long as you met all the above 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.

Limited capability for work element

If, because of health problems, you or a partner are not only unfit to work but also unfit to undertake any work-related activity, you can receive an extra element. This is known as the limited capability for work and work-related activity element.

The same person cannot qualify for both a limited capability for work and work-related activity element and a carer element at the same time. If this applies to you, you will only get the higher of the two amounts.

Childcare element

If you work and pay for registered childcare costs, you could receive an extra allowance covering 85 per cent of your childcare costs.

To qualify, you (and your partner if you have one) must normally work. Any number of hours of work will do. You may also qualify if you work and your partner is unable to provide childcare, either because they are incapable of work, or because they provide regular and substantial care to a disabled person (and they are eligible for Carer’s Allowance).

The childcare element can cover 85% of childcare costs. This is up to a maximum of £1014.63 per month for one child and £1,739.37 for two or more children.

Housing element

This includes help towards rent and some service charges.

Income and capital-based deductions

You’ll now have a “maximum amount” calculation based on your standard allowance and the 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 does working affect 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, then 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. However, this does not apply to anyone who is 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 does other income or capital 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. This includes DLA, PIP, Child Disability Payment, Adult Disability Payment and child support maintenance. Unfortunately, Carer’s Allowance counts 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 – unless you move from tax credits onto Universal Credit under managed migration rules. If this applies to you any capital you have above £16000 is temporarily ignored for up to 12 months. 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.

Will I be worse off under Universal Credit?

Many families with a disabled child end up worse off under Universal Credit than they were under legacy benefits. 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 equivalent to £35.95 per week (£156.11 per month). The equivalent additional payment under the existing benefits system is £80.01 per week. This represents a cut of £44.06 per week, or just under £2300 per year. Since the child disability addition is for each disabled child, families with two children on the lower addition could lose twice this amount.

You can find out more about this issue in our briefing – Universal Credit and Disabled Children.

Transitional protection

The government has said that it will transitionally protect some existing claimants. However, this applies only to existing claimants who the government moves onto Universal Credit as part of “managed migration”. Even then, 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.

You will not receive transitional protection if you volunteer to claim Universal Credit, or if you end up on Universal Credit as a result of “natural migration”, i.e. because of a change in circumstances.

Read more transitional protection payments.

How changes in circumstances affect Universal Credit

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.

Benefits you might be entitled to

Disability Living Allowance

Universal Credit

Personal Independence Payment (PIP)

Carer’s Allowance

Tax credits

Help with Council Tax and rates

“Bedroom tax”

Other benefits

Welfare benefits in Scotland

< Benefits & tax credits