Universal Credit glossary

Universal Credit comes with its fair share of terminology and jargon. Here’s a list of some of the terms you might come across and what they mean.

Universal Credit definitions

Alternative Payment Arrangements

When the Jobcentre Plus decides to either:

  • pay someone more frequently than monthly, perhaps because they are struggling with budgeting
  • split a Universal Credit payment between someone and their partner rather than giving them a joint payment (for example because of financial abuse), or
  • pay a landlord direct if the customer can’t manage their own rent payments

Appeal

If a customer is unhappy with a decision made about their Universal Credit by the Department for Work and Pensions, they can ask for it to be reconsidered and, in some cases, appeal to the courts to have it looked at again.

Budgeting Advance

An advance payment of Universal Credit to help someone buy essential furniture or household equipment, for example.

Budgeting Loan

Being replaced by the Budgeting Advance, a Budgeting Loan is an advance payment of benefit to help someone with essential expenses.

Capital

A customer’s financial assets. Someone’s capital must be below a certain level to qualify for Universal Credit. Savings and things like property count as capital.

Carer element

An extra amount of Universal Credit awarded to someone who is the main carer for a severely disabled person.

Child element

An amount of Universal Credit awarded to someone who is responsible for children.

There is an extra amount called the ‘disabled child addition’ that is paid for each disabled child.

Childcare costs element

An extra amount of Universal Credit awarded to someone who pays for registered childcare when they go to work.

Claimant commitment

A personalised document which sets out everything someone needs to do in return for receiving their Universal Credit payment. For most people this means activities to prepare for and look for work.

The customer must sign the document as part of the claims process. If a couple are making a claim to Universal Credit both have to sign a separate claimant commitment.

Deduction

An amount of money taken off someone’s Universal Credit payment. For example, a deduction from Universal Credit to repay an overpayment or to pay off rent arrears.

Department for Work and Pensions (DWP)

The government department managing the introduction of Universal Credit.

Direct payment

When help with housing costs (or Housing Benefit) is paid directly to tenants, rather than their landlords.

Discretionary Housing Payment

Financial help for people who are having trouble paying their rent as a result of cuts to their Housing Benefit. Discretionary Housing Payments are awarded by the local authority.

Earned income

Earnings from employment or self-employment.

Employment and Support Allowance (ESA)

A benefit paid to people who have limited capability for work because of illness or disability. Income-related ESA is being phased out and replaced by Universal Credit.

Housing Benefit

Help with rent for people who are on a low income. It is being phased out and replaced by the housing costs element of Universal Credit.

Housing costs element

An extra amount of Universal Credit that goes towards someone’s housing costs if they pay rent or have a mortgage.

Income Support

Financial support for people with no income or a low income. It’s for people who don’t have to sign on as unemployed, for example, because they are a carer. It is being phased out and replaced by Universal Credit.

Jobcentre Plus

Part of the Department for Work and Pensions which provides services to jobseekers.

Jobseeker’s Allowance (JSA)

A benefit paid to people who are out of work, or working less than 16 hours per week, and looking for work. Income-based JSA is being phased out and replaced by Universal Credit.

Joint claim

If a couple are eligible for Universal Credit they will need to make a joint claim and will get one payment for their household.

Limited capability for work

When someone has a health condition or disability that affects their ability to work.

Limited capability for work element

If someone is classed as having limited capability for work they will be awarded an extra amount of Universal Credit.

Managed Payments

When a tenant has accrued arrears to the value of one month or more, DWP can make managed payments directly to the landlord.

Means-tested

Some benefits are means-tested. In other words, the amount of income and capital a customer has can affect their eligibility.

Overpayment

When someone has been paid more Universal Credit than they should get. See Deduction.

Post Office Card Account (POCA)

An account provided by the Post Office that is designed for people who can’t access a bank account to receive benefits and pensions from government departments.

No other payments can be made into this account (eg wages) and it is a non-transactional account so it can’t be used to make automated payments such as Direct Debits or standing orders.

Sanction

If someone is sanctioned it means their Universal Credit is cut because they have failed to meet one or more of the requirements in their claimant commitment, for example they have not turned up to an interview.

Short term advance of benefit

A short term advance of benefit for someone who is in financial need who has made a new claim for a benefit and is waiting for your first payment, or who has had a significant change in circumstances that means their benefit will go up by a large amount and they can’t wait until the next payment

It will normally be paid back out of future benefit payments.

Split payments

See Alternative Payment Arrangements

Suspension

When someone’s Universal Credit is stopped because there is a doubt about their entitlement.

Tax credits

Tax credits are payments from the government.

  • If someone is responsible for at least one child they might qualify for Child Tax Credit.
  • If they work, but they’re on a low income, they might qualify for Working Tax Credit.
  • All tax credits are being phased out and replaced by Universal Credit.

Third-party deductions

These are deductions from someone’s Universal Credit to pay things like fuel bill arrears, or rent arrears.

Unearned income

Income from things like pensions and certain types of benefits.

Universal Jobmatch

An online service that can be used to match people who are looking for work with employers who have jobs available.

Work Capability Assessment (WCA)

The process of gathering information and evidence – sometimes including a medical assessment – to decide whether someone is capable of work.

Work coach

A trained adviser – usually in a Jobcentre - who gives someone help and advice with job searching, etc.

Work Programme

Extra support for people who need more help with finding and staying in work.

Everyone who claims Universal Credit is assigned to a work-related group that determines what they have to do to find or prepare for work.

These are the things someone has to do to help them get back into work, or to find more or better paid work. They are listed in the claimant commitment.