What is Universal Credit
Universal Credit (UC) is the main benefit for people on a low income of working age (below state pension age). It is replacing six existing benefits and tax credits. The whole of the UK has now switched over to Universal Credit for new claims. However, there are some exceptions, where you will still have to make a claim under the old benefits system. You can find out more about the very limited circumstances where exceptions apply on GOV.UK. If you are already receiving benefits under the old system (such as Tax Credits, Housing Benefit, Income Support, income-related Employment and Support Allowance etc.) you will continue to receive these benefits unless you make a claim for UC. Nobody is being moved to UC by the DWP; this cannot happen unless you make a claim. The roll-out schedule to invite existing claimants to claim UC is not confirmed.
Universal Credit can include amounts for children, childcare and housing costs, but you can’t normally get extra Universal Credit for a third or subsequent child born on or after 6 April 2017.
Receiving Universal Credit means you may be able to claim other help depending on where you live and your other circumstances, for example a Sure Start Maternity Grant or Best Start Grant (Scotland only), free school meals, and Healthy Start vouchers or Best Start Foods (Scotland only).
If you are already claiming benefits, you should get advice before claiming Universal Credit if possible, as in most circumstances, you will not be able to return to benefits it replaces, and you could lose out. You do not necessarily have to claim Universal Credit just because there is a change of circumstances.
Only people who are moved onto Universal Credit at the invitation of the Department for Work and Pensions will receive transitional protection (an amount to make up the difference) if their previous benefits were higher, and this process is not happening at the moment. People who have to claim Universal Credit because of a change of circumstances, or who choose to do so now, do not receive transitional protection (apart from limited transitional amounts for some disabled claimants).
Which benefits are being replaced?
How much is Universal Credit?
Universal Credit includes an amount for you, and your partner if you live with one. It also includes amounts for children (but not usually a third or subsequent child born on or after 6 April 2017). UC also includes extra for disabled children (however, this may be less than you receive for disabled children in tax credits). It can include help with housing costs (rent and certain service charges, but not mortgage payments). If you are found to have limited capability for work-related activity then your Universal Credit will include an additional amount for this. It can include an amount for adults who care for a disabled person, and it can include an amount for childcare costs as long as you, and usually your partner, are working. Universal Credit is reduced depending on your income from work and any other income (such as other benefits, although some are disregarded). You can find more information on how Universal Credit is worked out on the Turn2Us website.
How is Universal Credit claimed and paid?
Most claims for Universal Credit are made online. Universal Credit is normally paid in one monthly payment, usually made to one person directly, and you have to pay any bills out of that money, including your rent. If any of these arrangements are 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). 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).
Claimants will need to agree a claimant commitment about what they will do whilst receiving benefit. Depending on your circumstances, you may have to look for work or more hours of work, or you may need to take part in activities and/or attend interviews.
More information about Universal Credit
There is a lot more information about Universal Credit on GOV.UK and on the Money Advice Service website. If you claim the benefits which are eventually going to be replaced by Universal Credit, you can prepare by making sure you have a bank account and thinking about how you would budget on a monthly basis from one payment. However, if you struggle, once you are on Universal Credit you can ask to be paid more frequently (for example, twice a month). In Scotland, you will be paid more frequently if you ask for it. In England and Wales it will depend on the decision of the DWP, so you need to explain how it would help you.
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.