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Universal Credit Guide

What is Universal Credit?

Universal Credit is a new benefit for working age people that replaces a number of existing benefits and tax credits. It is designed to support people who have a low (or no) income with their basic living expenses and housing costs.

The benefit is available to people who are out of work, including people looking for work and people unable to work due to illness, disability or childcare commitments and to those caring for disabled people or those in work and on low incomes.

Working age usually means people between the ages of 18 and Pension Credit qualifying age. Although the lower age limit may be 16 or 17 years old in some limited circumstances.

Which legacy benefits is it replacing?

Over a number of years the following benefits and tax credits, also known as 'legacy benefits', will be abolished as Universal Credit replaces them:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

Other benefits that are not means-tested will continue to be paid separately, such as Disability Living Allowance, Personal Independence Payment and Carer's Allowance. Child Benefit will also continue to be paid separately. 

Benefits based on National Insurance contributions, such as contribution-based Jobseeker’s Allowance and contributory Employment and Support Allowance, have not been replaced but they have been renamed as 'new style' (e.g. new style Jobseeker’s Allowance and new style Employment and Support Allowance), and will work alongside Universal Credit.

Benefits for those over the state pension age, such as the state pension and Pension Credit, will also not be replaced. Neither will Council Tax Reduction/Support so you should check to see if you can claim it in addition to Universal Credit.

How does it work?

The amount you can get depends on your circumstances and how much other income you have. You can continue to get Universal Credit if you are in work but have low earnings. For more information see our guide to how Universal Credit is worked out.

Universal Credit is also different because it is administered by one benefit department; the DWP, whereas other benefits are paid by a range of different departments. Most people will claim Universal Credit online. For more information, see our guide to online claims.

When you start a claim your first payment should be made after five weeks. This includes your first 'assessment period' and up to seven days for your payment to reach your bank account at the end. Your assessment period is the monthly period that starts on the day you make your claim and continues to roll month by month until your claim ends.

If you don't have enough money to live on while you wait for your first UC payment you can ask for an advance payment. This is a loan that needs to be paid back from your future UC payments over 24 months.

These repayments can be delayed for up to three months if you can't afford them, speak to your job coach if this applies to you. If you ask for an advance because of a change of circumstances during your UC claim you can delay repaying for one month and you need to repay the amount over a six month period.

If you are in a couple you will make one claim, and usually receive one payment, between you but you can ask for your payment to be split between you and your partner.

Most people across the UK are now asked to claim Universal Credit if they start a new claim for benefits or they are already claiming benefits and have a change in your circumstances. For more information see our guide to what triggers a move to Universal Credit.

If you live in England and Wales

The main difference between Universal Credit and existing benefits is that Universal Credit is paid once a month on the same date each month. The government say this is so that receiving benefits is like getting paid when you are in work.

Although Universal Credit is made up of different elements it is paid to you as one amount. This means the money to help with your housing costs is usually paid direct to you once a month and not to your landlord, so you will be responsible for ensuring your rent is paid. For more information about this see our guide on Universal Credit and Housing Costs.

If you live in Scotland

You have the option of twice-monthly payments instead of once a month. You can also ask for the housing costs element to be paid directly to your landlord instead of you. See the site for more details on how the payment flexibilities work and how to apply.

If you live in Northern Ireland

Things are slightly different in Northern Ireland as, unlike the rest of the UK, unless you ask to be paid your Universal Credit monthly you will get two payments a month instead of one.

Help with your housing costs is also slightly different as your rent will usually be paid directly to your landlord instead of to you.

See the NIdirect Universal Credit hub for further details.

If you are working

If you have an employer and are paid through the PAYE system then when your wages change your Universal Credit will also change so you don’t have to keep handing in wage slips if your income changes. Ask your employer if you are not sure if you are paid under this system.

Please note: If you are paid by your employer monthly and sometimes receive two pay checks in one Universal Credit monthly assessment period, for instance due to it being a bank holiday, this can dramatically affect your Universal Credit award. If this happens to you, you should contact your work coach via your journal and they can manually amened your salary payment dates. This process will eventually become automated, but until then you need to ask for the amendment to be applied to your UC account.

If you are self-employed

If you have your own business you will need to have records to show how you run it, such as a business plan, invoices and receipts. Earnings figures need to be entered into your Universal Credit journal each month.

You could also be affected by something called the Minimum Income Floor, which is where the government can assume you earn a certain level of self-employed profit, even if you don't earn that amount. See the Minimum Income Floor help page for further details.

If you have previous benefits debts (or some other debts)

Universal Credit can take money off your payment if you have a debt. This is usually a maximum of 25% of your Universal Credit standard allowance. Deductions can be taken for the advance payments described above, Universal Credit overpayments, Tax credits and other benefit overpayments or other third party deductions. The Universal Credit deductions guidance provides more details.

If you have savings over £16,000

Most people are not able to claim Universal Credit if they, or their partner, have savings over £16,000. Any savings between £6,000 and £15,999 will also lower any Universal Credit entitlement. If you have recieved a Managed Migration notice letter asking you to move to Universal Credit from another benefit any savings you have over £16,000 will be ignored for 12 months.

Will you need to look for work while claiming?

Receipt of Universal Credit is dependent on you signing a claimant commitment and being placed into a group that determines what you have to do in order to continue receiving the benefit.

To find out which group you would be placed in, see our Claimant Commitment page.

The four groups include:

All work related requirements

People in this group are deemed ready for work and are expected to look for and be available for work.

Work preparation

People in this group are not considered ready for full-time work but are expected to prepare themselves for going into work. This group includes people with a disability or health condition which means they have a limited capability for work. It also includes people with a two year old child.

Work-focused interviews

People in this group are not expected to look for work but are required to attend occasional work focused interviews to ensure they do not lose touch with the labour market. This group includes lone parents and primary carers for children aged one.

No work-related activity

People in this group have no work condition as they are not considered to be able to work at all. This includes people with a disability or health condition which prevents them from working or who are carers, lone parents or the primary carer for a child under the age of one.

If a person is in work and earning over the set amount for their circumstances they are exempt from the conditions of their group. If they earn below the threshold set for them, they would still have to follow the claimant conditions set for them e.g. looking for extra work if they only do a few hours a week.

Anyone who breaks one of the conditions of their commitment may be sanctioned and lose some or all of their benefit.

How to claim?

You can apply via the website. You must complete your claim within 28 days of creating your account or you will have to start again.

If you live with your partner, you will both need to create accounts. You’ll link them together when you claim. You cannot claim by yourself.

If you cannot claim online, you can claim by phone through the Universal Credit helpline on one of the numbers below:

Universal Credit helpline: 0800 328 5644
Welsh language: 0800 328 1744
Relay UK (if you cannot hear or speak on the phone): 18001 then 0800 328 5644
British Sign Language (BSL) video relay service
Textphone: 0800 328 1344

You can get free support to make a Universal Credit claim from the Help to Claim service provided by Citizens Advice in England/Wales and Scotland. They can help you in the early stages of your Universal Credit claim with things like online applications or preparing for your first jobcentre appointment. Use the 'chat' facility on its website (usually available 8am to 6pm, Monday to Friday) or call one of the numbers below:

England: 0800 144 8 444
Scotland: 0800 023 2581
Wales: 08000 241 220
Relay UK (England): 18001 then 0800 144 8 444
Relay UK (Wales): 18001 then 08000 241 220

Have you already claimed UC?

If you’ve claimed Universal Credit, and would like to take part in a study, a researcher at the University of Oxford would like to hear from you.

Ally used to claim UC himself and is now looking into how work coaches engage with people during their claim. His research will help your experience of the benefits system be heard – although all the info given will be anonymous. You will get a £10 gift voucher for your time.

Get in touch via email, facebook or twitter and Ally will set up a call or online chat.