Some benefits and tax credits you might be getting now are being replaced by Universal Credit. What this means for you depends on how and when you’re moving from existing benefits. This page tells you the different ways you could switch onto Universal Credit and the effect this could have on your payments.
To find out more about how Universal Credit works and how to make a new claim for it read our guide Universal Credit explained.
Which benefits are affected by Universal Credit?
Universal Credit is replacing these benefits:
- Working Tax Credit
- Child Tax Credit
- income-based Jobseeker’s Allowance
- Income Support
- income-related Employment and Support Allowance
- Housing Benefit.
The Department for Work and Pensions (DWP) calls them legacy benefits.
You can no longer make a new claim for legacy benefits.
If you’re currently claiming legacy benefits, how and when you move to Universal Credit depends on whether:
- you have to make a new claim because of a change in circumstances
- nothing changes and the DWP asks you to start claiming Universal Credit.
Moving to Universal Credit because of a change in circumstances
Help to Claim
If you’re claiming Universal Credit for the first time, Citizens Advice has a dedicated service to help you. Call 0800 144 8444 in England or 0800 024 1220 in Wales.
For more information and to find your local Citizens Advice go to their website
In Scotland, call 0800 023 2581, via webchat on the Citizens Advice website or contact your local branch directly during their usual business hours.
If certain circumstances change in your life, you might be asked to make a new claim for Universal Credit, for example a change in your:
- employment status, such as starting a new job, or increasing or decreasing your hours
- family circumstances, such as new baby, child starting school, or partner moving in or out
- housing, such as moving to a new local authority area.
Your circumstances might also change if you start or stop:
- being a carer
- a claim based on disability.
You might also be asked to claim Universal Credit if your income has reduced due to the coronavirus outbreak, or if you can’t work because you’re sick, self-isolating or shielding as a result of coronavirus and you don’t qualify for Statutory Sick Pay.
When you claim Universal Credit, your existing benefits will stop. However, if you get Housing Benefit, this will be paid for an extra two weeks after you make your claim, to avoid the risk of rent arrears while waiting for your first payment.
It’s important to understand that you could get either more or less money than you do now when you move from legacy benefits to Universal Credit. For this reason, it’s best to check in advance how your income will be affected. In some circumstances delaying your claim for Universal Credit could make sense.
If you are getting legacy benefits and your circumstances don’t change
If you’re currently claiming the benefits being replaced by Universal Credit, the Department for Work and Pensions (DWP) will ask you at some point to make a claim for Universal Credit.
Unless there is a change in your circumstances, you don’t need to do anything until you are contacted by DWP.
Moving to Universal Credit from Child Tax 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.
If there is a significant change in your circumstance, you will be asked to move from Child Tax Credit to Universal Credit.
This might happen if you:
- start work
- have a child
- move in with your partner
You could get more or less money on Universal Credit than you are currently getting in Child Tax Credit and other benefits.
If you have one or two children you can claim for children until they reach 19 (or 20 in some cases) if they are in full time approved education or training, but not at university.
If your children were born before 6 April 2017, you will be able to claim for them all.
If one or more of your children were born on or after 6 April 2017, you will only be able to claim for the first two unless you had a multiple birth or have adopted.
The first child premium will no longer be paid under Universal Credit.
Your monthly Universal Credit payment will include the following elements and 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.
If you’re on Universal Credit there are 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
||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 work a maximum of 16 hours a week (or spend 16 hours looking for work) this might include some training and work-focused interviews
|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
Moving to Universal Credit from Working Tax Credit
If you have a change of circumstances you might be asked to switch to Universal Credit from Working Tax Credit if you:
- start working less than 16 hours a week
- were on Working Tax Credit and become sick.
- have a child
- start renting a property, certainly if it’s in a new local authority area.
The amount of Universal Credit you are paid could be more or less than the benefits you get now.
Your Universal Credit payment will also adjust month by month if the amount you earn goes up or down.
This should make it easier for you to accept short-term work or take on more hours.
If you earn less during one month your Universal Credit should go up to make up for the shortfall in earnings.
There’s also no limits to the amount of hours you have to work as there are with Working Tax Credit.
If your working hours are not the same from month to month, it can mean you might need to budget more carefully now.
For the DWP to work out how much Universal Credit you should get, they need to know how much you’ve earned in the past month.
Either you or your employer need to tell the DWP how much you’ve earned so you don’t get too much or too little Universal Credit.
||What you have to do in return for your Universal Credit payment
|You are working full-time
||If you are not earning at least the equivalent of 35 hours at the minimum hourly wage you will be expected to look for better paid work (depending on your ability to work and any caring commitments you have)
|You are working part-time
||You will normally be expected to look for more work until you are earning at least the equivalent of 35 hours at 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 the equivalent of 35 hours at the minimum hourly wage each week (depending on your ability to work and any caring commitments you have)
*The minimum income floor has been temporarily abolished during the coronavirus outbreak, until 31 July 2021. The minimum income floor will gradually come back from August. However, if your income is still affected by coronavirus, then your work coach will have the option not to apply the minimum income floor. This is on an individual case-by-case basis so talk to your work coach in good time if you’re worried.
Reporting your earnings if you’re employed
Your employer might be able to report your earnings automatically through the government’s Real Time Information system (RTI).
You’ll need to find out if your employer has access to the RTI system.
If your employer has access to the RTI system
Ask for your employer’s PAYE scheme number and tell your work coach, through your online account, or phone the Universal Credit helpline.
If you have more than one employer, you’ll need to get a PAYE scheme number for each job.
Once the PAYE scheme number is recorded on your claim, your earnings information should be sent automatically each month to DWP and you won’t have to report it.
If your employer doesn’t have access to the RTI system
What’s my assessment period?
Universal Credit is paid in arrears. Each month’s payment is worked out by looking at how much you earned in the previous month. This is called the assessment period. The start date of each assessment period will be the date of the month when your claim began.
You’ll have to report how much you’ve earned each month by the last day of your assessment period to your work coach or the Universal Credit helpline.
You will need to provide:
- your PAYE reference
- your gross taxable pay
- your employer’s name
- the date you were paid
- how much tax you paid
- how much National Insurance you paid
- details of any contributions made to a pension scheme (and whether they are paid from your gross or net salary or into a personal pension).
You’ll also have to report any earnings your employer won’t know about.
Find out more about claiming Universal Credit and reporting your earnings on the entitledto website
Reporting your earnings if you’re self-employed
If you’re getting a self-employed income support grant, this will need to be reported as income when it is paid.
Historically, Universal Credit payments for the self-employed have been worked out based on an assumed level of income called ‘the minimum income floor’ rather than your actual earnings.
However, as a temporary measure for everyone during the coronavirus outbreak, the amount of Universal Credit you’ll receive will be based on the actual income you earn each week. You report this through your online account and it is included alongside everything else when working out your overall Universal Credit payment.
The minimum income floor will gradually come back from August. However, if your income is still affected by coronavirus, your work coach will have the option not to apply the minimum income floor. This is on an individual case-by-case basis so talk to your work coach in good time if you’re worried.
Moving to Universal Credit from Income Support
If you move from Income Support to Universal Credit, you won’t be limited to working a maximum of 16 hours a week so you might be able to increase your hours of work and still get Universal Credit.
If you have children and you move on to Universal Credit, you’ll be expected to discuss future plans for work when your youngest child turns one, and to prepare for work when they turn three, with support from Jobcentre Plus.
If your circumstances change
You might be asked to move from Income Support to Universal Credit if you:
- stop full-time education
- start renting a new property, certainly if it’s in a new local authority area
- stop being a carer
- are a loan parent and your youngest child turns five
- start working enough hours to meet Working Tax Credit conditions.
Moving to Universal Credit from ESA
If you’re currently getting Employment and Support Allowance (ESA) read our guide Universal Credit for sick and disabled people.
Moving to Universal Credit from Housing Benefit
Did you know?
If you’re moving from Housing Benefit to Universal Credit (UC), you will continue to get Housing Benefit for two weeks after your UC claim starts to reduce the risk of rent arrears.
If your circumstances change
You might have to move from Housing Benefit to Universal Credit if you:
- are claiming Child Tax Credit and start work
- have your first child
- move home, certainly if it’s in a new local authority area.
You could get more or less in Universal Credit than you get now.
Your Universal Credit payment will include a housing costs element which will replace the help you currently get from Housing Benefit.
Rent payments in England and Wales
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) either you or your landlord could ask for an Alternative Payment Arrangement (APA) until you get back on your feet.
This means your rent could be:
- paid directly to your landlord
- paid to you weekly or fortnightly.
In Northern Ireland
If you’re claiming Universal Credit in Northern Ireland, your housing costs will automatically be paid to your landlord. You can choose to pay your landlord yourself.
You will have to pay your landlord directly, but you can choose to have your housing costs paid directly to your landlord.
Young people and Universal Credit
If you are aged between 18 and 21, in return for receiving your benefit you’ll 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 traineeship, gain work-based skills or go on mandatory work placement.
Housing support for young people
If you are aged between 18 and 21 and are out of work you will be automatically entitled to housing support if you make a claim for Universal Credit.
If you’re on Pension Credit
If you are in a couple and either you or your partner reach Pension Credit age, you will now have to claim Universal Credit if you have a change in circumstances until you both reach Pension Credit age. This might mean you will get less money.
Managing for money until your first Universal Credit payment
Once you’ve made your claim for Universal Credit your existing benefits payments will stop.
You will then have to wait up to five weeks for your first Universal Credit payment.
However, if you’re already getting any of these benefits:
- Housing Benefit
- Income Support
- Income-related Employment and Support Allowance
- Income-based Jobseeker’s Allowance
You will continue to receive payments for two weeks after you have made your Universal Credit claim to tide you over the five-week wait for your first payment of Universal Credit.
If you’re getting tax credits, they will stop immediately after you send in your claim for Universal Credit.
It’s important to think about how you’ll cope while waiting for your first Universal Credit payment, especially if your budgeting is set around the dates your old benefit payments come into your bank account.
If you think you will struggle to make ends meet you can apply for an advance which you will need to repay within 13 months.