How Universal Credit is worked out
Universal Credit payments are worked out in 3 steps.
Step 1 - Maximum Universal Credit
First, the basic parts of Universal Credit that apply to you are added together to give your maximum Universal Credit.
For everyone this includes a standard allowance - an amount for you (and your partner if you have one). The level of this standard allowance is the same as for existing out-of-work benefits such as Jobseeker's Allowance. Extra amounts are then added on if any of the following apply to you:
Child Element - for each child you have plus an additional amount if any child has a disability (called the Disabled Child Element)
Childcare Element - to help with up to 70% of relevant childcare costs (increasing to 85% from 11 April 2016)
Disability elements - there are two rates, a Limited Capability for Work Element and a Limited Capability for Work & Work-Related Activity Element which is higher
Carer Element - to support a person providing a significant amount of care to someone with a disability
Housing Element - to help towards relevant housing costs
Step 2 - Reduction in Universal Credit for income and earnings
Universal Credit then takes into account any:
The amount your maximum Universal Credit will be reduced by depends on the type of income you have. For earnings the reduction is 65p for every £1 earned over your work allowance - the amount you are allowed to earn before your Universal Credit is reduced.
For benefit income and other non-work income the reduction is £1 for £1. For savings £1 a week of 'other income' is assumed for every £250 (or part of £250) of savings/capital that you have; whether you actually receive this much income from your savings/capital or not.
Step 3 - Other reductions in Universal Credit
Finally Universal Credit takes into account any special rules that might affect you, such as the benefits cap.
Universal Credit may also be reduced to take account of deductions from benefits. This includes things like repayment of social fund loans or benefit advances, sanctions associated with the claimant commitment and deductions associated with benefit over-payments or debts to third parties collected through benefits called Third Party Deductions.
Universal Credit rates April 2016 - March 2017
To find out the Universal Credit rates for the current year see Universal Credit Rates.
See how you will be affected by Universal Credit
Use our benefits calculator to see how you will be affected by Universal Credit. It's free and easy to use. Just fill in your details and select the 'How much would you get under Universal Credit?' option from the results page to see how you'll be affected. To get your entitlements under Universal Credit start the benefits calculator now.