What is Universal Credit?
Universal Credit is the main benefit for people on a low income of working age (below state pension age – but see below if you are a couple and only one of you is over state pension age). It is usually a single monthly payment to help with your living costs.
It has replaced six existing benefits and Tax Credits, which are now known as legacy benefits. These are:
- Income Support
- Income-related Employment and Support Allowance
- Income-based Jobseeker’s Allowance
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
If you try to make a new claim for any of the above benefits you will be asked to claim Universal Credit instead. However, there are some very limited circumstances where you can make a new claim for Housing Benefit. See GOV.UK for more information.
If I’m on Tax Credits or one of the other legacy benefits do I have to claim Universal Credit?
The government are in the process of moving people on Tax Credits and other legacy benefits over to the Universal Credit system. This process is known the Move to UC or you might hear it being called ‘managed migration’. It is expected to be complete by 2024.
The government will write to you when it is your turn, to let you know that your existing benefits and Tax Credits are ending and that you will need to make a claim for Universal Credit to continue getting financial support. You WILL NOT be automatically switched over to Universal Credit. You MUST make a claim. The letter will tell you what date you need to claim by. If you don’t make a claim for Universal Credit your existing benefits and Tax Credits will stop and you will not get any extra financial support.
If you are on Tax Credits and have savings or capital of more than £16,000, you cannot usually claim Universal Credit. However, if you are moved over to Universal Credit as part of the managed migration process, there are special rules that apply for the first 12 months of your claim which mean you may still be able to get Universal Credit.
Will I be worse off on Universal Credit?
If you are moved over to Universal Credit as part of the Move to UC managed migration process, you will not be worse off than you were on your previous benefits and Tax Credits. If Universal Credit is less than what you were previously getting you will get an extra amount of Universal Credit known as a ‘transitional protection’ to top-up your Universal Credit.
If you have to move over to Universal Credit because of a change in your circumstances or you voluntarily choose to move over, prior to receiving your official letter telling you that your existing benefits and Tax Credit are ending, you could be worse off on Universal Credit. You DO NOT get ‘transitional protection’ under these circumstances, unless you were in receipt of a severe disability premium in your previous benefits immediately prior to claiming Universal Credit. Even if you are worse off you cannot go back onto your previous benefits.
Some people on Tax Credits or other legacy benefits may be better off on Universal Credit. You can use a benefits calculator to work out whether you would be better off. If you think you would be better off you can choose to voluntarily move over to Universal Credit whenever you want. You don’t have to wait until you receive a letter from the government. However, even if you are better off financially, Universal Credit is very different from legacy benefits, and you may have work requirements that you didn’t have on your previous benefits. You should always try to get further advice if you are considering voluntarily moving on to Universal Credit.
Does a change in my circumstances mean I have to claim Universal Credit?
Some changes in your circumstances may mean that you cannot remain on your existing benefits or Tax Credits and you will have to claim Universal Credit instead. Not all changes of circumstances will end your existing benefits. The general rule is that if a change means that you would have to make a new claim for your existing benefits or Tax Credits, you will have to claim Universal Credit.
For example, if you are on Child Tax Credit and start working enough hours to qualify for Working Tax Credit, this does not require a new claim, so you can add Working Tax Credit to your existing Child Tax Credit claim.
On the other hand, if you are claiming Tax Credits as a couple, and you separate, this would require you to make a new single person claim for Tax Credits. As it’s no longer possible to make a new Tax Credits claim you would have to claim Universal Credit instead.
It can be quite complicated to try and work out whether a change in your circumstances means you need to claim Universal Credit. There is a helpful table of examples showing when you have a choice about remaining on your existing benefits and when you have to claim Universal Credit here.
If you are unsure whether a change in your circumstances means you have to claim Universal Credit you should try to get further advice. You could end up worse off on Universal Credit and you will not be able to go back onto your previous benefits.
Who can claim Universal Credit?
Universal Credit can be claimed by people in lots of different circumstances. Whether you are entitled depends on your circumstances and whether you are on a low income. You can claim it if you are unemployed, or working and on a low income, if you are caring for a disabled person, or if you are unable to work due to ill health or disability.
To get Universal Credit you must:
- Be 18 years or older (although some 16-17 year olds can claim it)
- Be under state pension age (although see below if you are in a couple and only one of you is over state pension age)
- Live in the UK (there are extra rules if you are not a British citizen)
- Not be in education (although there are some exceptions)
- Have less than £16,000 in savings or other assets (this is known as capital and doesn’t include the home you live in)
If you live with a partner, you will have to make a joint claim as a couple and both of your income and capital will be taken into account. If one of you doesn’t meet the above conditions you will still need to make a joint claim, but the person who doesn’t meet the conditions will be ignored when calculating the maximum amount of Universal Credit you could receive. However, their income and capital will still be taken into account. If this situation applies to you, you should try to get further advice.
What if I live with a partner and only one of us is over state pension age?
Normally, if you are over state pension age you cannot claim Universal Credit but may be entitled to Pension Credit and/or Housing Benefit instead. However, if you live with a partner and only one of you is over state pension age you are what is known as a ‘mixed-age couple’ and you cannot claim Pension Credit or Housing Benefit and must claim Universal Credit instead.
Any state pension or other pensions received will be taken into account when working out how much Universal Credit you can get. The partner who is over state pension age will have no work requirements on Universal Credit, but the younger partner may be expected to work depending on their personal circumstances.
How do I claim Universal Credit?
Most Universal Credit claims are made online. The first thing you have to do is set up an online Universal Credit account. If you are claiming jointly with a partner, you will both have to set up your own individual accounts which you can then link together later on in the application process.
Once you’ve created an account you will have 28 days to complete it, otherwise you will have to start again. However, it is really important to note that the Universal Credit claim does not start from the date you create your account. It only usually starts from the date you fully complete the application and hit the ‘submit’ button.
Universal Credit claims can only be backdated by a maximum of one month and only in certain limited circumstances, so you should not delay claiming as you could miss out.
After you’ve created your Universal Credit account you will have to go through a list of questions about your circumstances to submit the claim. This includes information about your earnings, other income and capital, who else lives with you, how much your housing costs are, how much your childcare costs are if you are working, and whether you have a health condition or disability that limits your availability for work. You’ll also need to provide bank details and confirm your identity so that you can receive your Universal Credit payments.
What if I can’t claim online?
If you cannot claim online, because, for example, you do not have regular or reliable access to the internet, you do not know how to use a computer, or you have a health condition or disability which means you cannot make or manage an online claim you can apply for Universal Credit over the phone.
To make a telephone claim for Universal Credit you will need to call the Universal Credit helpline on 0800 328 5644 between Monday to Friday 8am to 6pm. There may be a long wait before your call is answered. You should explain why you cannot claim Universal Credit online and tell them you want to make a claim over the phone. If you have any difficulties trying to make a claim by phone the Citizens Advice Help to Claim service may be able to help you.
In some circumstances the DWP Visiting Team will visit you in your home to help you to make a claim. This only applies in exceptional circumstances, such as if you are disabled with complex needs or are a vulnerable person.
What if I need to claim on behalf of someone else?
You may need to claim Universal Credit on behalf of someone else if they are unable to make the claim themselves. For example, you may need to help your disabled child make a claim if they are over 19 (or over 16 and no longer in full-time education).
If you are claiming on behalf of someone else you can ask to become that person’s appointee, which means you can mange the claim on their behalf. The DWP will arrange a home visit to assess whether an appointee is needed and whether you are a suitable appointee. This might not be necessary if you are already named as their appointee on another benefit, for example DLA or PIP.
You can either complete the claim online on behalf of the person you are claiming for, or you can make a telephone claim. If you make the claim online the information you include should be about the person who you are claiming on behalf of, not yourself. Once the online claim has been submitted you can contact the DWP through the online account to let them know you have made the claim on behalf of somebody else and you would like to start the process of becoming their appointee.
How much Universal Credit will I get?
The amount of Universal Credit you will get depends on your own personal and family circumstances. Universal Credit is made up of different elements, depending on your circumstances, which are added together to give your maximum entitlement. Deductions are then made for any earnings, other income and capital you have. Other deductions, such as paying back an advance payment are then made and the benefit cap is applied, if applicable. The amount of Universal Credit left after all of these deductions is what you will be paid each month.
The Universal Credit Standard Allowance
Everybody who claims Universal Credit is entitled to a standard allowance. Your standard allowance depends on your age and whether you are claiming as a couple. You only receive one standard allowance per household.
The standard allowance rates (April 2023/24) are:
- Single claimant aged under 25: £292.11 per month
- Single claimant aged 25 or over: £368.74 per month
- Joint claimants both aged under 25: £458.51 per month between you
- Joint claimants either aged 25 or over: £578.82 per month between you
Additional Elements of Universal Credit
You may qualify for one or more additional elements of Universal Credit depending on your circumstances. These are added to your standard allowance to give your maximum Universal Credit entitlement (before the deductions mentioned above).
Child and Disabled Child Elements
You’ll get this if you are responsible for any children under 16, or under 20 if they are still in full time education or training. The amount of child element you’ll receive depends on the number of children you have and when they were born.
If you have 2 or more children, you will not receive a child element for a third or subsequent child if they were born on or after 6 April 2017, unless an exception applies. This is called the 2-child limit.
The child element rates (April 2023/24):
- Oldest or only child, if born before 6 April 2017: £315 per month
- Oldest or only child if born on or after 6 April 2017: £269.58 per month
- Second child, and each eligible child after that: £269.58 per month
If your child is disabled, you will also get an extra amount which is paid in addition to the usual child element. You can get the extra amount for a disabled child even if you can’t get the usual child element due to the 2-child limit.
The disabled child element rates (April 2023/24) are:
- If your child is in receipt of Disability Living Allowance, Child Disability Payment or Personal Independence Payment: £146.31 per month
- If your child is in receipt of the higher rate of the care component of Disability Living Allowance, the higher rate of the care component of Child Disability Payment, the enhanced rate of the daily living component of Personal Independence Payment, or if they are registered blind: £456.89 per month
Childcare Costs Element
If you are working, you can receive help with 85% of your childcare costs (subject to a monthly cap) through the childcare costs element of Universal Credit. You do not need to work a minimum number of hours to get help with childcare costs, but the childcare must be needed in order for you to work. If you are claiming jointly with a partner, you must both be working to get help with childcare costs, unless one of you is unable to work due to ill health or disability, caring for a disabled person, or temporarily absent from the household (e.g. they’re in prison, hospital or residential care).
The childcare costs element rates are:
- If you have one child, you will get 85% of your childcare costs up to a maximum of £950.92 per month (£646.35 prior to 28 June 2023)
- If you have two or more children, you will get 85% of your childcare costs up to a maximum of £1630.15 per month (£1108.04 prior to 28 June 2023)
We have more detailed information on help with childcare costs on Universal Credit on our website.
Housing Costs Element
If you’re paying rent or have service charges, you can receive help through the housing element of Universal Credit. The amount of help you can get depends on the size of your home, the number of bedrooms you are entitled to and whether you are renting social housing, through a council or housing association, or whether you are renting through a private landlord.
You cannot get help with mortgage payments through Universal Credit but you may be entitled to a loan to help with the interest charges on your mortgage called Support for Mortgage Interest.
If you live in a shared ownership scheme, you cannot get help with your mortgage through Universal Credit, although you might be eligible for Support for Mortgage Interest. But you can claim help with the rent you pay through the housing element of Universal Credit.
If you live in socially rented housing (e.g. council or housing association):
- You need to check how many bedrooms you are entitled to
- If you live in a home that has the same amount of bedrooms or less bedrooms than your entitlement, your housing element will cover all of your rent (but see below for when deductions are made for other people who live with you)
- If you live in a home that has one more bedroom than you are entitled to your housing element will be reduced by 14%
- If you live in a home that has two or more bedrooms than you are entitled to your housing element will be reduced by 25%
If you live in privately rented housing:
- You need to check how many bedrooms you are entitled to.
- You need to check your local housing allowance (LHA) rate. The LHA is the maximum amount of help you can get with your rent if you rent from a private landlord.
- If you live in a home where the rent is less than or the same as your LHA, your housing element will cover all of your rent (but see below for when deductions are made for other people who live with you).
- If you live in a home where the rent is more than your LHA your housing element won’t cover all of your rent and you’ll be paid your LHA rate. For example, if your LHA is £850 a month and your rent is £1000 a month, your housing element will be £850 which means you’ll have a shortfall of £150.
If your housing element doesn’t cover your full rent you might be entitled to a Discretionary Housing Payment. This is not part of Universal Credit. Contact your local council to find out more and apply.
If you live with other people, your housing element could be reduced by £85.73 per month (April 2023/24) for each person who is classed as a ‘non-dependant’. This is known as a non-dependant deduction. A non-dependant is someone who lives with you who is expected to pay their share of rent, and could include adult children, elderly parents or other relatives, or friends. Your partner does not count as a non-dependant. If you live in shared accommodation, the other people who live with you are not usually counted as non-dependants. There are also exceptions where a non-dependant deduction does not apply. Shelter has lots more information about non-dependant deductions on their website.
Limited capability for work element
If you have a health condition or disability which limits your ability to work, you might be entitled to extra Universal Credit. You may get extra if you have been found to have limited capability for work following a work capability assessment, but not everybody is entitled to an extra amount. There is lots more information on claiming Universal Credit if you’re sick or disabled on the Citizens Advice website.
The extra amount of Universal Credit you will get (for the year April 2023/24) is:
- You have limited capability for work which was assessed prior to 3 April 2017, you will get a limited capability for work element of £146.31 per month.
- You have limited capability for work which was assessed on or after 3 April 2017, you will not get a limited capability for work element (LCW). Your Universal Credit payments won’t increase.
- You have limited capability for work and work-related activity which was assessed any time either before or after 3 April 2017, you will get a limited capability for work and work-related activity element (LCWRA) of £390.06 per month
If you are caring for a disabled child or adult for at least 35 hours a week you might be entitled to a carer element of Universal Credit worth £185.86 per month (April 2023/24).
You’ll get the carer element if the person you care for gets one of the following benefits:
- The highest or middle rate of the care component of Disability Living Allowance or Child Disability Payment
- The daily living component of Personal Independence Payment or Adult Disability Payment
- Attendance Allowance
- Armed Forces Independence Payment
- Constant Attendance Allowance of £83.10 per week (April 2023/24) paid with Industrial Injuries Benefit or War Disablement Pension
You do not need to be getting Carer’s Allowance to get the carer element of Universal Credit.
You can get the carer element even if you are working, provided that the person you are caring for gets one of the above benefits and you provide at least 35 hours a week of care for them.
Only one person can be paid a carer element in respect of a disabled child or adult, even if more than one person provides care for them. For example, if you have a severely disabled child (who is getting one of the above benefits) and both you and your partner are each providing at least 35 hours a week of care for them, only one of you can qualify for the carer element.
It is really important to note that if the person you are caring for is on any benefits which include a Severe Disability Premium, they may lose their entitlement to the Severe Disability Premium if you claim the carer element of Universal Credit in respect of caring for them. Seek further advice if you are not sure.
How is Universal Credit paid?
Universal Credit is usually a single monthly payment into your bank account, and you have to pay any bills out of that money, including your rent. If this arrangement is problematic for you, you can ask for more frequent payments and/or a direct payment to your landlord (but be aware that the payment to your landlord may not be sent to them when your rent is due). This is known as an alternative payment arrangement.
In Scotland, you should get these arrangements if you ask for them. In England and Wales, the arrangements are up to the DWP so you should explain why you need to change (for example, because it’s difficult to budget or you have rent arrears or other debts).
If you do not have a bank account you may be able to receive your Universal Credit through the Payment Exception Service.
Universal Credit is based on a monthly assessment period (AP). At the end of each AP the DWP will look at your circumstances and base your Universal Credit payment on what your circumstances have been. If your circumstances fluctuate each month your Universal Credit will adjust to accommodate this.
If your circumstances change during an AP, Universal Credit usually treat the change as though it happened from the beginning of the AP. For example, if you have a new child or your rent increases part way through an AP, provided you report the change before the end of the AP, your Universal Credit payment will increase to include a child element or additional housing element (if applicable) from the start of the AP. It is important to report changes of circumstances promptly and within the AP they occur wherever possible.
How long does it take to get my first Universal Credit payment?
It usually takes around 5 weeks to receive your first Universal Credit payment. This is because there is a one month assessment period (AP). At the end of the AP the DWP will decide whether you are entitled to Universal Credit and how much. It then takes 7 days for the payment to reach your bank account.
You can check your payment statements at the end of each AP through your online Universal Credit account. If you have a telephone claim you should receive your payment statements through the post.
Can I get financial help while I am waiting for my first payment?
If you will find it difficult to wait 5 weeks for your first Universal Credit payment, you may be able to get an Advanced Payment. An Advanced Payment is a loan that you will have to repay through ongoing deductions from your monthly Universal Credit payments.
The amount of Advance Payment you can receive is based on your estimated Universal Credit entitlement taken from the information you provided when you made the claim. You can borrow up to 100% of your estimated monthly Universal Credit entitlement. You don’t have to borrow 100%, you can choose to take a smaller Advance Payment.
You can apply for an Advance Payment online through your Universal Credit account, by speaking to your work coach at the Jobcentre, or by calling the Universal Credit helpline. When you apply you will be told how much you can borrow, the monthly repayment amounts and when the first repayment is due.
How do earnings affect Universal Credit?
If you are working, your earnings may reduce your Universal Credit. Your maximum Universal Credit is reduced by 55p of every £1 that you earn. This is known as the taper rate. However, some people who are on Universal Credit get a work allowance. This is an amount you can earn before your Universal Credit is reduced.
You get a work allowance if you are responsible for a child or if you have been assessed as having limited capability for work due to ill health or disability.
The amount of the work allowance depends on whether you are claiming help with housing costs on Universal Credit. The work allowance (April 2023/24) is:
• £379 per month if you are claiming help with housing costs
• £631 if you are not claiming help with housing costs
The work allowance is per household, not per individual. For example, if you are claiming jointly with a partner and are both working you do not get a work allowance each, the work allowance is what you can earn between you.
If you get a work allowance the first £379/£631 of your earnings are ignored. For every £1 you earn over your work allowance 55p is deducted from your maximum Universal Credit.
What if I’m off sick or on maternity, paternity, shared parental or adoption leave and receiving statutory pay?
Any statutory pay you receive is treated as earnings by Universal Credit and is deducted in the same way as normal earnings. So, 55p of every £1 of statutory pay you receive is deducted from your maximum Universal Credit. The work allowance applies to statutory pay in the same way as normal pay.
Statutory pay that is treated as earnings by Universal Credit includes Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Shared Parental Pay, Statutory Adoption Pay and Statutory Parental Bereavement Pay.
What if I’m getting occupational sickness, maternity, paternity or adoption pay?
Any occupational sickness, maternity, paternity, or adoption pay you receive is not differentiated from normal earnings by Universal Credit. This means it is treated as earning income in the usual way.
What if I’m getting Maternity Allowance?
Maternity Allowance is not treated as earned income by Universal Credit. Instead, it is classed as unearned income which means it is treated differently to Statutory Maternity Pay. The work allowance and taper rate don’t apply to Maternity Allowance.
All of your Maternity Allowance is taken into account and deducted from your maximum Universal Credit entitlement. Universal Credit work out the deduction based on your monthly amount of Maternity Allowance. They do this by multiplying the weekly amount by 39 weeks which gives your total Maternity Allowance entitlement over 9 months. They then divide this figure by 9 to get the monthly amount to deduct from your Universal Credit.
For example, if you are receiving the flat rate of £172.48 a week Maternity Allowance (April 2023/24), Universal Credit will multiply £172.48 by 39 weeks which gives a total of £6726.72. This is then divided by 9 months to give the monthly amount which gives a total of £747.41. So, your Universal Credit is reduced by £747.41 a month as this is how much Maternity Allowance you receive each month.
I’m paid 4-weekly, how does that affect my Universal Credit?
If you are paid 4-weekly by your employer there will be an assessment period (AP) once every year where you receive 2 wages in one AP. Depending on how much you are paid, this could mean that you do not receive any Universal Credit for the AP in which you have received 2 wages.
Unfortunately, you cannot challenge this decision. The Court of Appeal ruled in October 2021 that it is fair that Universal Credit is assessed on the actual income you have received in each AP. There is no basis to attribute one of the wage payments to a different AP.
The best thing that you can do is be prepared for the fact that there will be an AP once a year in which you will be paid 2 wages. If possible, you should try to work out which AP will be affected and try to budget for this in advance.
If you do not receive any Universal Credit because you’ve received 2 wages in an AP, you will have to reapply for Universal Credit the following month. The Citizens Advice website has information on what you need to do to reapply.
I’m self-employed, how does Universal Credit work for me?
If you’re self-employed you will need to report your income and expenses at the end of each assessment period. You can do this online through your Universal Credit account, or by calling the Universal Credit helpline if you have a telephone claim.
You may have to prove that you are gainfully self-employed which means showing that self-employment is your main income, you get regular work, the work is organised and you expect to make a profit.
If you’re self-employed your Universal Credit payment may be worked out on an assumed level of earnings, rather than what you actually earn. This is known as the Minimum Income Floor (MIF) and is based on what somebody in similar circumstances to you would expect to make earning minimum wage.
If you earn more than your MIF, your Universal Credit will be worked out on your actual earnings.
If you earn less than your MIF your Universal Credit will be worked out as if you had earned your MIF, not what you have actually earned. For example, if your MIF is based on what you would earn working 35 hours a week at minimum wage, this would be £364.70 a week (April 2023/24 – less if you’re under 23). If you only earned £250 a week, your Universal Credit would be worked out as if you had earned your MIF of £364.70 a week.
If you earn less than your MIF you may have to look for additional work to top up your income.
The MIF does not apply for 12 months if you are new to claiming Universal Credit. It also does not apply if you have been on Universal Credit a while and you are newly self-employed. If you are not considered to be gainfully self-employed the MIF doesn’t apply, however, you may have to look for additional work.
How does other income affect Universal Credit?
If you have income other than earnings or statutory pay it may be taken into account when calculating your Universal Credit entitlement. Whether it is taken into account depends on what type of income it is.
Generally speaking, your Universal Credit will be reduced by the same amount of any the following types of income you receive:
- Pensions (including occupational, personal and state pension)
- Insurance payments
- Maintenance payments (but not including child maintenance)
- Student income
- Some benefits including Carer’s Allowance, New-Style Jobseeker’s Allowance and New-Style Employment and Support Allowance and Maternity Allowance (this is not a full list)
The rules on what counts as income for Universal Credit are complex. If you are not sure whether income you receive should be taken into account when working out your Universal Credit payments you should try to get further advice.
The following benefits are ignored by Universal Credit:
- Child Benefit
- Scottish Child Payment
- Disability Living Allowance (or Child Disability Payment in Scotland)
- Personal Independence Payment (or Adult Disability Payment in Scotland)
- Attendance Allowance
- The Sure Start Maternity Grant (or Best Start Grant in Scotland)
- The Healthy Start Scheme (or Best Start Foods in Scotland)
I’m getting Carer’s Allowance, but it all gets taken off my Universal Credit. Is that right?
You can receive Universal Credit at the same time as Carer’s Allowance, however, your Universal Credit will be reduced by the amount of Carer’s Allowance you receive. Universal Credit calculate your Carer’s Allowance on a monthly basis and deduct this from your maximum Universal Credit entitlement.
For example, if you get £76.75 a week Carer’s Allowance (April 2023/24), Universal Credit multiply this by 52 weeks to give your annual amount which is £3,991 a year. This is then divided by 12 to give a monthly amount of £332.58. So, your Universal Credit will be reduced by £332.58 each month that you receive Carer’s Allowance.
However, Universal Credit also includes a carer element which you should receive automatically if you are getting Carer’s Allowance. So, even though your Universal Credit is reduced by the amount of Carer’s Allowance you receive, you will get an extra carer element included in your Universal Credit payment.
Should I claim Carer’s Allowance and Universal Credit together?
If you haven’t already claimed Carer’s Allowance, you have a choice whether to claim it alongside Universal Credit or not. You don’t have to be receiving Carer’s Allowance to get the carer element of Universal Credit. If you choose not to claim Carer’s Allowance alongside Universal Credit you won’t be worse off, unless your monthly Universal Credit entitlement is less than what you would receive from Carer’s Allowance. I.e. your monthly Universal Credit entitlement is less than £332.58 (April 2023/24). If this situation applies to you, you should get further advice as claiming Carer’s Allowance could mean you get £0 Universal Credit which means you may lose out on some passported benefits.
For some people it is advantageous to claim both Carer’s Allowance and Universal Credit at the same time. This is because you receive class 1 National Insurance credits through Carer’s Allowance which can help you qualify for state pension, contribution-based benefits and some bereavement benefits. You receive class 3 National Insurance credits through Universal Credit, which helps you qualify for state pension but not contribution-based benefits. So, if you are only concerned about not having gaps in your National Insurance record for your state pension you don’t need to claim both Universal Credit and Carer’s Allowance; you can claim Universal Credit on its own. If you are unsure, we recommend you seek further advice.
There are other advantages to claiming both Carer’s Allowance and Universal Credit together, such as receiving more frequent benefit payments (although this is only likely to help if you are used to budgeting weekly or fortnightly rather than monthly) and you’ll also receive a small £10 Christmas bonus if you claim Carer’s Allowance, which should be disregarded by Universal Credit. It also means if there is a problem with one of your benefit payments, you should still receive a payment from the other benefit, so you are not left without any financial support until the issue is resolved.
If you live in Scotland it it worth claiming both Carer’s Allowance and Universal Credit together as it will mean you are also entitled to a Carer’s Allowance Supplement. This is an extra payment for people in Scotland who claim Carer’s Allowance. You won’t get a Carer’s Allowance Supplement if you are only claiming the carer element of Universal Credit. You must be in receipt of Carer’s Allowance to qualify.
How do savings and other assets affect Universal Credit?
Savings and other assets are known as capital by Universal Credit and may affect your Universal Credit entitlement.
The home you live in does not count as capital, however, if you own a home you do not live in any equity in the property will count as capital unless an exception applies.
The rules on what counts as capital and when the value of capital can be ignored are complex. If you are not sure whether you have capital or whether your capital should be taken into account when working out your Universal Credit entitlement you should try to get further advice.
In general, you cannot claim Universal Credit if you have capital of over £16,000. However, if you are moved to Universal Credit from Tax Credits under the managed migration process, there are special rules that apply for the first 12 months of your claim which mean you may still be able to get Universal Credit.
If you have capital between £6000 and £16,000 you will be treated as having a monthly income of £4.35 for every £250 (or part of £250) of capital above £6000. For example, if you have capital of £6001 you will be treated as having a monthly income of £4.35 from it as £1 is a part of £250.
If your capital is less than £6000 it is ignored by Universal Credit.
What is the benefit cap and how will it affect my Universal Credit?
The benefit cap is a limit on the total amount of benefits you can receive. It applies to Universal Credit (but also applies to other benefits too).
The amount of the benefit cap depends on your circumstances and whether you live in London.
If you live outside of London the benefit cap (April 2023/24) is:
- £423.46 per week (£22,020 a year) if you’re in a couple
- £423.46 per week (£22,020 a year) if you’re a single parent and your children live with you
- £283.71 per week (£14,753 a year) if you’re a single adult
If you live inside of London the benefit cap is:
- £486.98 per week (£25,323 a year) if you’re in a couple
- £486.98 per week (£25,323 a year) if you’re a single parent and your children live with you
- £326.29 per week (£16,967 a year) if you’re a single adult
Some people are not affected by the benefit cap. If you’re on Universal Credit you will not be affected by the benefit cap if:
- You (and your partner if you have a joint claim) earn £658 a month after tax and National Insurance
- You have been assessed as having limited capability for work following a work capability assessment
- You are caring for a disabled person
You are also not affected by the benefit cap if you, your partner or any of your children get certain benefits including Disability Living Allowance, Scottish Child Payment, Personal Independence Payment or Adult Disability Payment (this is not a full list)
This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details.
If you have further questions and would like to contact our advice team please use our advice contact form below or call us.
Have you heard about your right to request flexible working? Watch our film to find out more.
The information on the law contained on this site is provided free of charge and does not, and is not intended to, amount to legal advice to any person on a specific case or matter. If you are not a solicitor, you are advised to obtain specific legal advice about your case or matter and not to rely solely on this information. Law and guidance is changing regularly in this area.
We cannot provide advice on employment rights in Northern Ireland as the law is different. You can visit the Labour Relations Agency or call their helpline Workplace Information Service on 03300 555 300.