Who is affected by Universal Credit
Universal Credit is not just for people who are out of work. If you’re getting tax credits or help with your rent, then you’ll eventually be moved onto Universal Credit. It might even affect you if you’re retired and getting Pension Credit.
- Who is affected by Universal Credit?
- If you get Child Tax Credit or tax credits to help with childcare costs
- If you’re getting Working Tax Credit
- If you’re getting Housing Benefit
- If you’re on Pension Credit
- Young people and Universal Credit
- Check you’re ready for Universal Credit
Who is affected by Universal Credit?
Universal Credit is being introduced in stages. Whether you can claim depends on where you live and your personal circumstances. Right now Universal Credit mainly applies to people who are newly unemployed and living in certain areas of the country. However, eventually it will be brought in for everyone claiming the benefits and tax credits that are being replaced.
So you will be affected if you’re claiming any of the following benefits:
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
- Housing Benefit
If you’re already getting one or more of these benefits or tax credits, you should carry on claiming as normal. You’ll be told as soon as you need to do anything differently.
If you get Child Tax Credit or tax credits to help with childcare costs
Your monthly Universal Credit payment will include the following elements also called additions, which will replace the help you currently get from tax credits.
- Child element – this helps with the costs of bringing up a child.
- Disabled child addition – this helps with the extra costs of bringing up a disabled child and will be paid at either a lower or higher rate depending on the needs of your child.
- Childcare costs element – lets you claim back up to 85% of your monthly registered childcare costs up to a capped limit of £646 for one child and £1,108 for two or more children while you’re working.
From April 2017, if you are making a claim for Universal Credit, support will be limited to the first two children (unless you have a multiple birth) and the first child premium will no longer be available.
How Universal Credit is different from Child Tax Credits
Under Universal Credit there will be different rules about what you have to do in return for receiving your payment.
|Age of child||What you have to do in return for your Universal Credit payment|
|Under 1||You won’t be asked to work in return for your Universal Credit|
|Between 1 and 2||You will be asked to attend interviews with a work coach to discuss plans for a future move into work|
|Between 3 and 4||You will be expected to take active steps to prepare for work, such as training and interviews with a work coach|
|Between 5 and 12||You will be expected to look for work that fits in with your responsibilities – for example, during school hours|
|Age 13 and above||You will normally be expected to look for full-time work|
From April 2017, you will be expected to prepare for work when your youngest child turns two, and to look for work when your youngest child turns three, with support from Jobcentre Plus.
Download a leaflet on ‘Universal Credit and your family’ from the GOV.UK website.
If you’re getting Working Tax Credit
Your monthly Universal Credit payment will replace the help you currently get from tax credits.
It will adjust month by month as the amount you earn goes up and down.
- If you’re employed, your employer will normally report your earnings to the Department for Work and Pensions (DWP) so that your monthly payment can be calculated.
- If you’re self-employed, you will be responsible for reporting your monthly ‘cash-in’ and ‘cash-out’ figures to the DWP.
How Universal Credit is different from Working Tax Credit
|Your circumstances||What you have to do in return for your Universal Credit payment|
|You are not working||You can get Universal Credit even if you are not working but you will normally be expected to prepare for or look for work in return for your payments|
|You are working part-time||You will normally be expected to look for more work until you are earning at least 35 x the minimum hourly wage each week (depending on your ability to work and any caring commitments you have)|
|You are self-employed||You will probably have your payments calculated as if you were earning at least at least 35 x the minimum hourly wage each week (depending on your ability to work and any caring commitments you have)|
- Download a leaflet on ‘Universal Credit and work’ from the GOV.UK website
- Download a leaflet on ‘Universal Credit and self-employment’ from the GOV.UK website
- Download a leaflet on ‘Universal Credit and tax credits’ from the GOV.UK websiteopens in new window
If you’re getting Housing Benefit
Your monthly Universal Credit payment will include a ‘housing costs element’ which will replace the help you currently get from Housing Benefit.
If you have your rent paid directly to your landlord at the moment, this will change under Universal Credit.
The money for your rent will be paid to you as part of your monthly Universal Credit payment. You will be responsible for using this money to pay your landlord.
However, if you have significant support needs (for example, with budgeting) an Alternative Payment Arrangement maightbe offered. In these cases, the DWP would consider information from tenants and landlords before it is offered.
This alternative arrangement could involve money being paid directly to your landlord – payment being made weekly or fortnightly or payments split into two bank accounts.
Housing support for young people
From April 2017, if you are aged between 18 and 21 and are out of work you will not be automatically entitled to housing support if you make a claim for Universal Credit.
There will be some exceptions if you’re vulnerable or you were in work for at least six months before making a claim.
If you’re on Pension Credit
If you reach Pension Credit age and your partner is under Pension Credit age, you might not be able to claim Pension Credit – you both might have to claim Universal Credit instead. The exact date for this change has not yet been announced.
But if you are already claiming Pension Credit when the change comes in you won’t be affected (unless or until there is a break in your Pension Credit claim for some reason). You’ll be told about this change at the time you apply for Pension Credit.
Young people and Universal Credit
From April 2017, if you are aged between 18 and 21, in return for receiving your benefit you will be expected to take part in a Youth Obligation for the first six months after you make a claim for Universal Credit.
This will include intensive support to help you get the skills you need to move into work.
After six months, you will be expected to apply for an apprenticeship or trainee-ship, gain work-based skills or go on mandatory work placement.
Check you’re ready for Universal Credit
Even if you’re not likely to be affected by Universal Credit straightaway, there are things you can do beforehand to make sure you’re ready for it.
You should be aware that after you have made your claim, it can take several weeks before you get your first payment and if your income or savings or low you might have to manage with little money.
If you are newly unemployed and single (or if you’re in a couple and one of you is newly unemployed) you will not be paid for the first seven days of a new claim for Universal Credit. These days are known as waiting days.
However, you should still make your claim as soon as you’re eligible to do so.
The seven days’ waiting period won’t apply if you’re in certain circumstances, for example if you’re terminally ill or vulnerable, have previously claimed Universal Credit or are moving on to it from another benefit.
If you’re worried about how you’ll manage until you get your first Universal Credit payment, read our guide Support while waiting for benefit payments.