Universal Credit explained

Universal Credit is a new benefit to support you if you’re working and on a low income or you’re out of work. This page explains how Universal Credit is different from existing benefits, how much you’ll be paid and how to apply for it.

Living in Northern Ireland?

Universal Credit works differently in Northern Ireland. Find out more on the nidirect website.

What is Universal Credit?

Living in Scotland?

You might be offered some choices about how your Universal Credit is paid. Read our guide to Universal Credit in Scotland.

Universal Credit is a single monthly payment for people in or out of work.

It replaces some of the benefits and tax credits that you might be getting now:

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

You might be invited to claim Universal Credit if you live in England, Scotland or Wales.

Universal Credit was introduced in Northern Ireland in September 2017.

Find out more about Universal Credit in Northern Ireland on the nidirect website.

Changes to Universal Credit

The Autumn Budget 2017 announced changes to Universal Credit, to come into force between January and April 2018.

The seven-day waiting period at the start of new UC claims will be removed from February 2018.

You’ll be able to access a full month’s advance payment within five days of making your claim from January 2018. You can claim this online. Repayments of this advance will be over 12 months rather than the current six.

Anyone receiving Housing Benefit at the time of a UC application will continue to receive the benefit for a further two weeks. This change will start in April 2018.

Universal Credit key facts

Did you know?

You might have to wait up to six weeks before your first payment.

  • For now, most new claims are from single, newly-unemployed people, although more jobcentres are now taking claims from couples and families.
  • However, if you’re in an area which offers a full service and are entitled to the benefits being replaced, you’ll be asked to claim Universal Credit.
  • If you get help with your rent, this will be included in your monthly payment – you’ll then pay your landlord directly.
  • If you live with someone as a couple and you are both entitled to claim UC, you will get one monthly joint payment paid into a single bank account.
  • UC is paid monthly in arrears so it can take up to six weeks after you make your claim to get your first payment.
  • There are no limits on how many hours a week you can work if you’re claiming UC. Instead, the amount you get will gradually reduce as you earn more, so you won’t lose all your benefits at once.
  • You have to make your claim online.

When will I be paid Universal Credit?

Make the most of your Universal Credit payment with personalised help from our Money Manager tool.

If you make a new claim for Universal Credit you will not be paid for the first seven days. These days are known as waiting days.

Don’t let this stop you making your claim and apply as soon as you are entitled to do so as it can take up to six weeks after you claim for your first payment to reach your account.

The seventh day after you make your claim is the date of the month on which your Universal Credit Payment will be paid each month. This is called your assessment date.

Universal Credit is paid monthly in arrears so you’ll have to wait one calendar month from your assessment date before your first UC payment is made. This is called your assessment period.

You then have to wait up to seven days for the payment to reach your bank account.

This means it can take up to six weeks before you get your first payment.


  • Ben has lost his job and makes a new claim for Universal Credit on 15 July.
  • He must wait seven days before his claim can start.
  • This makes his assessment date the 22 July. It means he will be paid on the 22nd of each month.
  • He needs to wait one assessment period (that’s a calendar month) to 22 August because Universal Credit is paid monthly in arrears.
  • He also needs to leave up to seven days for the money to reach his account.
  • He should expect his first payment of Universal Credit no later than 29 August.
  • If 29 August is a bank holiday Monday, he should receive payment on the last working day (Friday) before the holiday.

When the seven-day waiting period won’t apply

The seven-day waiting period won’t apply if, for example you:

  • Have claimed Universal Credit within the past six months
  • Are splitting up from or moving in with someone who’s already claiming Universal Credit
  • Are moving on to Universal Credit from another benefit
  • Are terminally ill
  • Are vulnerable, for example you’ve recently been a victim of domestic violence or are leaving care or prison

Your first payment should go into your account no later than five weeks after you make your claim.

Find out more about whether the seven-day waiting period will apply to you on the GOV.UK website
If you are worried about how you will manage for money until you get your first payment, read our guide Support while waiting for benefit payments.

How much is Universal Credit?

Universal Credit is made up of a standard allowance plus elements for:

  • Housing
  • Being a carer
  • Childcare costs
  • Disabled children
  • An ill or disabled adult

Your maximum Universal Credit Award is made up of:

  • One standard allowance for your household, plus
  • Any elements which cover your family circumstances

You will get the maximum award if your household has no other earnings and savings or capital of £6,000 or less.

If you or someone in your household has other earnings and/or savings, these will be taken into account when working out your Universal Credit payment.

  • Find out more about how much you’ll get on the GOV.UK website
  • Or use a benefits calculator on the GOV.UK website to estimate all your entitlements including Universal Credit.
  • Get an estimate of how much Universal Credit you’ll be entitled to using the calculator on the Policy in Practice website.

How does working affect Universal Credit?

You can work as many hours as you like when you’re on Universal Credit.

There are no limits like there are with existing benefits such as Income Support or Working Tax Credits.

If you’re in paid work you might be entitled to a work allowance.

What is the work allowance?

The work allowance is the amount of money you’re allowed to earn before your Universal Credit payment is affected.

You will be entitled to a work allowance if you’re:

  • Responsible for dependent children, and/or
  • You can’t work as much because of illness or disability.

If you’re entitled to the work allowance, you can earn up to the threshold for your circumstances.

Your Universal Credit payment will then go down by 63p for every £1 you earn above this amount. This is called the earnings taper.

If you don’t qualify for the work allowance, your Universal Credit payment will go down by 63p for every £1 on all your earnings.

Find out more about the work allowance and earnings taper on the Turn2Us website

What happens to your Universal Credit when you start work or work more hours?

Watch the video from the Department for Work and Pensions (DWP) to find out.

How does other income affect Universal Credit?

Some income that you didn’t get from working can be deducted from your maximum award. This is called unearned income.

Unearned income that will be taken off your Universal Credit payment includes:

  • Statutory Sick Pay
  • Pension Income
  • Statutory Maternity, Paternity or Adoption Pay
  • Some benefits that aren’t replaced by Universal Credit

Usually £1 will be deducted from your Universal Credit payment for every £1 of unearned income.

Unearned income that won’t be taken off your Universal Credit payment includes:

  • Child Benefit
  • Maintenance payments
  • Disability Living Allowance
  • Personal Independence Payment
  • Income from boarders and lodgers.
Find out more about income that affects Universal Credit on the Turn2Us website.

How do savings affect Universal Credit?

If you have savings or capital (from things like investments or shares) this might affect how much Universal Credit you’ll get.

Savings of £6,000 or less

Any capital or savings you or your partner have under £6,000 is ignored when working out your Universal Credit payment.

Savings between £6,000 and £16,000

If you or your partner has any savings or capital of between £6,000 and £16,000, the first £6,000 is ignored.

The rest is treated as if it gives you a monthly income of £4.35 for each £250, or part of £250.

Savings of £16,000 or more

If you or your partner has any savings or capital of £16,000 or over, you will not be entitled to Universal Credit.


  • You have £7,000 in a savings account.
  • The first £6,000 of it is ignored.
  • The remaining £1,000 is counted as giving you a monthly income of £17.40.
  • £1,000 ÷ £250 = 4
  • 4 × £4.35 = £17.40
  • £17.40 will be taken off your monthly Universal Credit payment.

How your savings are affected if you move from Tax Credits to Universal Credit

Under the rules for Tax Credits, any savings or capital you had over £6,000 was ignored, although some income from savings was counted.

If you move onto Universal Credit from Tax Credits and you have savings or capital of over £6,000, the government has said that you’ll still be entitled to a top-up payment – known as transitional protection – to make sure that you’re not worse off.

How to apply for Universal Credit

Did you know?

If you need help getting online your Jobcentre or local council can provide support. Find out where to get support on UK Onlineopens in new window.

If you’re entitled to claim Universal Credit, you are expected to make your claim online on the Apply for Universal Credit website.

You can find a list of the information you’ll need to provide before you start your claim on Making a Universal Credit claim.

If you and your partner are making a joint claim, only one of you will need to complete the online claim form, but that person will need to enter details for both of you.

For more details, visit the GOV.UK Your claim journey website.

Contact the Universal Credit helpline

If you need help with your claim, call the Universal Credit helpline free on:

Telephone: 0800 328 9344

Textphone: 0800 328 1344

Lines are open between 8am - 6pm, Monday to Friday (closed on bank and public holidays).

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