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.

What is Universal Credit?

Living in Northern Ireland or Scotland?

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

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.
For more information on claiming Universal Credit, your commitments, sanctions and working while claiming download Universal Credit & You from Gov.uk.

Universal Credit key facts

Did you know?

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

  • 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’re not in a full service area, you will continue to claim existing benefits until you’re invited to claim UC.
  • 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 five 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.

Don’t delay making your claim for Universal Credit and apply as soon as you are entitled to do so as it can take up to five weeks for your first payment to reach your account.

The date you submit your claim is the date of the month your Universal Credit payment will be paid. This is called your assessment date.

Universal Credit is paid monthly in arrears, so you’ll have to wait one calendar month from the date you submitted your application 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 five weeks before you get your first payment.

Example

  • Ben has lost his job and makes a new claim for Universal Credit on 22 July.
  • This makes his assessment date 22 July. It means he will be paid on the 22 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.
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.
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?

Help to Save

If you’re working and on Universal Credit, find out if you qualify for the Help to Save account which gives you up to a 50% bonus from the government on your savings.

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.

Employer-paid benefits, such as Statutory Maternity, Paternity, Adoption and Sick Pay are treated at earnings and will be affected by the taper.

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:

  • New style Jobseeker’s Allowance (JSA)
  • New style Employment and Support Allowance (ESA)
  • Pension Income
  • 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.

Find our more about how your savings will affect your benefit payment.

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 Online Centres Network.

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.

Help with an online application for Universal Credit

If you’re worried about using a computer to make your claim, it’s important you get help. This is because your claim will not start until you have sent your online form.

If you don’t have access to a computer at home, you might be able to use one for free at your local Jobcentre, library, Citizens Advice or council.

You might also be able to get help filling in the application at one of these centres. Not all will be able to offer this service, so check before you go. However, you could get a friend or family member to help you.

If you’re new to computers or haven’t felt confident about using them in the past, now is a good time to learn or get up to speed.

You can find free digital skills support in your area from the National Careers Service on 0800 100 900.

Visit the Online Centres Network to find your nearest training centre and LearnMyWay.comopens in new window offers free online course to help beginners develop digital skills.

Advance payment on Universal Credit

Top Tip

You will have to repay the advance from your future Universal Credit payments, so only ask for what you need.

If you will have little or no money until your first payment, you can request an advance payment from your work coach or by calling the free Universal Credit helpline.

You can request up to a full month’s payment as an advance.

You don’t have to claim a full month’s payment and you should only claim as much as you need to get you through to the first full payment.

If you only claim a part payment but find you need more money, you can make a further claim for the remainder of your first full payment.

Once the first assessment period is over, you can’t claim another advance payment.

You will have to repay this from your future Universal Credit payments over 12 months.

To request an advance, you will need to talk to your work coach, or call the Universal Credit helpline. This can be done when:

  • you make your claim for Universal Credit
  • while you’re waiting for your first payment
  • when you’re reporting a change in circumstances.

You will be asked to explain why you need the advance, provide your bank details and have your identity checked.

You should get a decision the same day and any advance agreed should be paid into your bank in five working days.

If you’ve been claiming benefits for six months, you might be able to claim a Budgeting Advance to cover essential costs.

Repaying the advance

If the advance is agreed, your work coach or helpline adviser will explain how much you will get, how much you’ll have to pay back each month and the date when the first payment is due.

The repayments come out of your future monthly Universal Credit payment over 12 months and the first repayment will come out of your first full payment.

Under exceptional circumstances, for example if you can’t afford the repayments or will fall into debt, repayments can be delayed for up to three months.

Why would you be refused an advance?

An advance might be refused if you (or both of you if you’re claiming as a couple):

  • have enough money to last until your next payment
  • live with parents, relatives or friends
  • have any final earnings, redundancy payments or accessible savings.

You can ask for a decision to be reconsidered, but you don’t have a right to appeal.

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

If you already have an online account and journal you should call the Universal Credit full service helpline on:

Telephone: 0800 328 5644
Textphone: 0800 328 1344

8am - 6pm, Monday to Friday (closed on bank and public holidays). Calls are free.

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