Universal Credit – Everything You Need to Know

Universal Credit is a monthly payment designed to help with living costs for people who are on a low income, out of work, or unable to work.

This guide will walk you through the claim process, explain additional benefits you may be entitled to while claiming Universal Credit, and help you understand the difference between legacy benefits and Universal Credit.

Who Can Claim Universal Credit?

To claim Universal Credit, you must meet the following criteria:

  • Live in the United Kingdom
  • Be currently out of work or have a low income that cannot cover your living costs
  • Be aged 18 or above (care leavers under the age of 18 may still be eligible)
  • Have savings of £16,000 or less if you are living with a partner
  • Be working full-time or training full-time (dependent on your circumstances)
  • Be below State Pension Age or have a partner who is
  • Live with a partner who is eligible for Universal Credit
  • Support a child either as a single parent or a couple
  • Pursue further education without any support from your family
  • Have limited capability to work due to a disability

Universal Credit Guide

The Universal Credit & You guide, Your responsibilities & commitment.

Key Features of Universal Credit

  • Single payment: Universal Credit merges six benefits and tax credits (Child Tax Credit, Working Tax Credit, Income Support, income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, and Housing Benefit) into one monthly payment, making it easier for claimants to manage their finances.

  • Tailored to individual circumstances: The amount of Universal Credit a person receives depends on their specific circumstances, such as housing costs, childcare expenses, health conditions, and disabilities. This ensures that the support provided is tailored to the individual’s needs.

  • Adjusts to changes in income: Universal Credit is designed to adjust as a person’s income changes, gradually reducing the payment as their earnings increase. This provides a financial incentive for claimants to work more hours or find higher-paying jobs, as they will not lose all their benefits at once.

  • Work allowances: Claimants with disabilities or children may be eligible for a work allowance, which is the amount they can earn before their Universal Credit payment is reduced. This allows them to keep more of their earnings while still receiving financial support.

  • Conditionality and sanctions: Universal Credit claimants may be required to meet certain conditions, such as looking for work, attending training courses, or meeting with a work coach. Failing to meet these conditions can result in sanctions, which reduce or suspend the Universal Credit payment.

The Impact of Universal Credit

Universal Credit aims to simplify the benefits system, become more efficient, and better aligned with the labor market. Some of the intended impacts include:

  • Reducing poverty and worklessness: By providing a financial incentive to work and offering tailored support to help claimants find employment, Universal Credit aims to reduce poverty and worklessness in the UK.

  • Improving work incentives: Universal Credit is designed to ensure that work always pays more than benefits, encouraging claimants to increase their earnings and become more self-sufficient.

  • Simplifying the benefits system: By combining multiple benefits and tax credits into one payment, Universal Credit simplifies the system, making it easier for claimants to understand and manage their finances.

Upcoming Changes to Benefits

  • Child Tax Credit: Financial support for parents or guardians responsible for a child or young person.
  • Working Tax Credit: Financial support for low-income working individuals or couples.
  • Income Support: Financial assistance for people with low income and limited savings.
  • Income-based Jobseeker’s Allowance (JSA): Support for individuals actively seeking employment.
  • Income-related Employment and Support Allowance (ESA): Support for those unable to work due to illness or disability.
  • Housing Benefit: Assistance with rent payments for those on low incomes or claiming benefits.

You can no longer make a new claim for legacy benefits; instead, you will need to claim Universal Credit.

Working or Training Full-Time and Eligibility

In certain circumstances, you might still be eligible for Universal Credit even if you are working or training full-time.

For example, if you are a low-income worker, a single parent working part-time, or have a disability that limits your ability to work, you may qualify for additional financial support through Universal Credit.

Payment Schedule

Universal Credit is typically paid monthly. However, in some cases (such as in Scotland or Northern Ireland), payments may be made twice a month.

Transitioning to Universal Credit

If your benefits stop or change for any reason, you will be transferred to Universal Credit. This may result in you making a new claim, and you will also be required to attend the Job Centre for an interview.

You do not need to take any action unless you experience a change in your circumstances or receive a ‘Migration Notice‘ letter instructing you to claim Universal Credit.

Impact on Other Benefits

If you or your partner claims Universal Credit, you will stop receiving the other benefits and tax credits mentioned. However, this will not affect any other benefits you may be receiving.

Content Updated 27/04/2023