Universal Credit

Universal Credit is a new means-tested benefit for people of working age. It replaces 6 existing benefits with a single payment for those who are out of work or on a low income.

What is Universal Credit?

Universal Credit is a new means-tested benefit for people of working age. It replaces 6 existing benefits with a single payment for those who are out of work or on a low income.

Universal Credit is currently being phased in across the UK. It will replace the following benefits:

Since January 2019, anyone making a new claim for a working-age means-tested benefit will usually claim Universal Credit rather than the older benefits listed above.

People on these benefits are now beginning to be transferred to Universal Credit under 'managed migration'. If you already get paid income-related Employment and Support Allowance you're unlikely to move across to Universal Credit until 2028.

Who can claim Universal Credit?

To claim Universal Credit, you need to meet the following basic conditions. You must:

  • be aged 18 or over (or 16 to 17 in certain cases)
  • be under Pension Credit qualifying age (now State Pension age). Couples where 1 is below pension age and the other over pension age will claim Universal Credit
  • be in Great Britain and not be subject to immigration control
  • not be in education (unless you're claiming a disability benefit, see below), and
  • have accepted a claimant commitment (see 'Your responsibilities' section below).

In addition, you must meet the financial conditions:

  • You (and your partner, if you're making a joint claim) must not have combined capital of more than £16,000, and
  • Your earnings or other income (and that of your partner, if making a joint claim) must not be too high for Universal Credit to be payable (see section 'How much is Universal Credit?').

Joint claims

If you live with a partner, you'll need to make a joint claim for Universal Credit. In a joint claim, you and your partner must usually meet all the basic conditions above.

In education

You can still qualify for Universal Credit when you're in full-time education if you get a disability benefit such as Disability Living Allowance or Personal Independence Payment, and before you make your claim you have been assessed as having a limited capability for work. This is tested under the Work Capability Assessment (see below).

How do I claim Universal Credit?

You should normally claim Universal Credit online.

If you're unable to apply online or need help, contact the Universal Credit Helpline on 0800 328 5644 (textphone 0800 328 1344).

You should have the following information available when you begin your claim:

  • your postcode
  • your (and your partner's) National Insurance number
  • details of your bank or building society account
  • any rental agreement you may have
  • details of your (and your partner's) income, savings and capital
  • details of your (and your partner's) earnings
  • details of any other benefits that you (or your partner) receive
  • if you have children, their Child Benefit reference.

The initial interview

Once you've made your claim, you'll need to participate in an interview. This is to confirm the information you gave when you made the claim and to discuss what you'll need to do to receive the benefit.

If you have a disability or health condition that means you'll find it hard to attend or take part in the interview, you can ask the Jobcentre to make 'reasonable adjustments'.

For example, it may be possible to hold the interview somewhere you can get to more easily, or do the interview over the phone.

You may also want someone with you at the interview for support or assistance, such as a friend, relative or professional.

At the interview, a work coach will discuss your work prospects with you, and the support you may need to help you find work, or agree an exemption from looking for a job.

The work coach will draw up a 'claimant commitment' outlining the responsibilities and work-related requirements that you must meet to keep getting the benefit in full (see 'What conditions do I have to meet?' section below).

If you can't show good reason for not fulfilling your claimant commitment then you'll be sanctioned.

How much is Universal Credit?

The amount of Universal Credit you're paid depends on your circumstances. It's worked out on a monthly basis by comparing your financial needs with financial resources.

Set amounts for different needs are added together to give a 'maximum amount' – the basic amount the law says you need to live on each month.

Your maximum amount is made up of a 'standard allowance' and different 'amounts' (see below). From this figure, deductions are made for any earnings and other income you receive – the resulting figure will be your Universal Credit for that month.

The standard allowance

This is the basic allowance that's always included in your maximum amount. The amount you're entitled to depends on your age, status and whether you're claiming as a single person or with a partner.

The standard allowance per month is:

  • single claimant aged under 25 - £292.11
  • single claimant aged 25 or over - £368.74
  • joint claimants both aged under 25 - £458.51
  • joint claimants where either is 25 or over - £578.82

The 'amounts'

These are paid to cover different needs. Any amounts you're eligible for will be added to the standard allowance to make your maximum amount.

There are 5 types:

  • The limited capability for work-related activity amount - you may be eligible for an amount of £390.06 a month if you're unable to work because of a disability or health condition such as Parkinson's. This is tested under the Work Capability Assessment (see below).
  • The carer amount - an amount of £185.86 is included if you have regular and substantial caring responsibilities for a severely disabled person.
  • The housing costs amount - this may be included in your award if you pay rent. It can also cover certain service charge payments.
  • The child amount - this is included in your award for each child (or qualifying young person) who lives with you up to a maximum of 2 children (unless you're exempt from this restriction). An additional amount is included for every child who is disabled.
  • The childcare costs amount - this is included in your award if you pay for registered childcare in order to stay in work.

Capital and savings

The capital limit for Universal Credit is £16,000, whether you're single or a couple. If you have savings or capital over £16,000, you can't get Universal Credit.

If you have savings or capital under £6,000, this is disregarded (which means you can receive Universal Credit in full).

If your capital is between £6,000 and £16,000, it is treated as generating a monthly income of £4.35 for each £250 (or part of £250) above the lower limit of £6,000. For instance, if you have capital of £6,300, it is treated as generating a monthly income of £8.70.

Earnings and income

If you're employed, your Universal Credit reduces gradually as you earn more. For every pound you earn (after tax and any deductions such as National Insurance or pension contributions) your Universal Credit payment reduces by 55p.

In some situations, you're allowed to keep some of your earnings up to a certain limit before your Universal Credit is affected. This is known as the 'work allowance'.

You may be eligible for a work allowance if you have limited capability for work, or responsibility for children.

If you have income other than earnings, such as other benefits, these will usually be taken into account in full, so that your Universal Credit is reduced pound for pound.

Some benefits are completely ignored, for example, Disability Living Allowance, Attendance Allowance and Personal Independence Payment.

Help with heating costs in 2023

If you get Universal Credit, either type of Pension Credit, Income Support, Housing Benefit, Employment and Support Allowance, Jobseeker's Allowance (means tested) or either of the Tax Credit payments, you will be entitled to the £150 Warm Home Discount.

On top of the Warm Home Discount all claimants of means-tested benefits will receive £900 paid in 3 instalments between May 2023 and spring 2024. The first payment of £301 was paid in April/May 2023, the second of £300 is expected in the autumn and the last payment of £299 will be paid in spring 2024.

The 'Work Capability Assessment' is the test used by the Department for Work and Pensions to assess whether people applying for Universal Credit or Employment and Support Allowance have:

  • a limited capability for work
  • a limited capability for work-related activity

This will determine whether you're entitled to the 'limited capability for work-related activity' amount of Universal Credit, and what work-related requirements, if any, you must meet to keep receiving the benefit in full.

Some conditions trigger automatic entitlement to exemption from work search activities and entitlement to the 'limited capability for work-related activity' element.

You're exempt and entitled to the extra element if you're deemed to be at risk if not found to meet the criteria, terminally ill, in receipt or about to start or recovering from chemotherapy or radiotherapy, or pregnant.

Couples where 1 person is over pension age and the pensioner receives either Attendance Allowance or the highest rate of other disability benefits are also exempt.

For more details about the points system used to make this assessment, including advice on completing the capability for work questionnaire, read the appendices of our Universal Credit information booklet (PDF, 473KB)

To qualify for Universal Credit, you may need to meet certain work-related conditions. These are known as 'requirements' and are recorded in the claimant commitment drawn up by the work coach at your work search interview.

Your benefit is likely to be reduced ('sanctioned') if you fail to meet a requirement.

The tasks you agree will depend on your personal situation. In some circumstances, none of the work-related requirements will apply to you.

You're exempt from all work-related conditions if you:

  • are responsible for a child under the age of 1
  • have regular and substantial caring responsibilities of 35 hours a week or more for a severely disabled person, or
  • have a limited capability for work-related activity. This is tested under the Work Capability Assessment (see above)
  • are a carer, not necessarily in receipt of Carer's Allowance, but entitled to the Carer's Element in the calculation
  • are a couple where 1 is over pension age. The person over pension age will be exempt from all the 'work-related requirements'
  • fit the student exemption criteria
  • have been threatened with or experienced domestic violence in the last 6 months
  • can show exceptional circumstances.

If work-related requirements do apply, there are 4 different types of requirement that may be included in your claimant commitment, depending on your situation.

These are:

  • the work-focused interview requirement
  • the work-preparation requirement
  • the work-search requirement
  • the work-availability requirement.

The work-focused interview requirement

Here you need to take part in 1 or more work-focused interviews. These are designed to assess your prospects and help or encourage you to move into, or stay in, work.

The work-preparation requirement

Here you're expected to take action to improve your chances of getting work. This can include taking part in training, an employment programme or work experience.

The work-search requirement

You're required to take reasonable action to get paid work (or more work if you're already working part-time). This can include searching for work, applying for jobs, creating and maintaining an online profile or registering with employment agencies.

You'll be expected to search for work for a minimum amount of time each week, usually set at 35 hours. The work you're searching for must also amount to at least 35 hours a week.

In each case, the Department for Work and Pensions may agree to less than 35 hours if you have caring responsibilities or a physical or mental impairment.

The work-availability requirement

You're normally required to be able and willing to take up paid work (or more work if you're already working part-time) immediately. You must also be able and willing to attend a job interview immediately.

If you're caring for a child or someone with a physical or mental impairment, the Department for Work and Pensions can allow you up to 1 month to take up paid work, and up to 48 hours to attend a job interview, so that you can make alternative care arrangements.

If you have a 'physical or mental impairment that has a substantial adverse effect' on your ability to carry out work of a particular nature or in a particular place, you're not expected to be available for such work or in such a place.

Universal Credit is automatically paid monthly in arrears, however you can ask for it to be paid more frequently. In Scotland and Northern Ireland you have an automatic right to be paid bi-monthly.

If you have a partner, you can choose who receives the payment.

It should normally take around 5 weeks to get your first payment of Universal Credit once you have completed your claim.

If you have difficulty budgeting at the beginning of your claim, you can ask for an advance payment, which you'll have to repay. To apply for a Universal Credit advance, call 0800 328 5644 (textphone 0800 328 1344), or speak to your job coach.

Starting in Bolton and Medway in May 2022 and slowly covering all the UK over the next few years, people on old legacy means-tested benefits will receive a 'Migration Notice' letter. The notice will tell you that your existing means-tested benefit will be ending soon and provide information about how to make a new claim for Universal Credit.

You will have 3 months (with an additional 1 month extension if needed) to make the new claim. After that your old existing benefit(s) will stop. If you're entitled to less money on Universal Credit you'll receive transitional financial protection where you’ll receive the same amount of money as you did on your old means-tested benefit(s).

Managed migration is different from natural and voluntary migration where your circumstances change or you choose to make a claim for Universal Credit. When your existing means-tested benefit ends due to your circumstances changing (for example, you lose your job) and you need financial help, then you'll claim Universal Credit (natural migration).

There is no transitional financial protection if you claim Universal Credit voluntarily or if changes in your circumstances mean you have to claim Universal Credit.

Some people are better off on Universal Credit than on their old legacy means-tested benefits so they can voluntarily choose to claim Universal Credit.

If you need help to understand the change or help to make this new claim call our helpline on 0808 800 0303.

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Universal Credit (PDF, 473KB)

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Last updated July 2023. If you'd like to find out more about how we put our information together, including references and the sources of evidence we use, please contact us at [email protected]