Universal Credit is a new means-tested benefit for people of working age. It is currently being phased in across the UK.
Universal Credit will replace 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 will replace the following means-tested benefits:
- Housing Benefit
- Income-related Employment and Support Allowance (ESA)
- Income-based Jobseeker’s Allowance
- Income Support
- Working Tax Credit and Child Tax Credit
Universal Credit is being introduced into additional Jobcentre Plus areas (the geographical regions served by each Jobcentre) each month. The government aims to complete this process by December 2018 – after which time Universal Credit will apply across the UK.
Once Universal Credit has been introduced into an area, anyone making a new claim for a working-age means-tested benefit in that area (with a small number of exceptions) will need to claim Universal Credit rather than the older benefits listed above.
You can check whether you are eligible to claim Universal Credit in your area using the universalcreditinfo.net postcode checker.
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 aged 16 or 17 in certain cases)
- be under Pension Credit qualifying age (this will rise to 65 by November 2018 and will then rise in line with State Pension age to reach 66 by 2020)
- live in Great Britain and not be subject to immigration control
- not be in education (unless you are claiming a disability benefit, see 'Claiming when in education' below)
- have accepted a claimant commitment (see 'What conditions do I have to meet?', below)
In addition, you must meet the financial conditions.
- You (and your partner, if you are making a joint claim) must not have capital of more than £16,000.
- Your earnings or other income (and that of your partner, if you are making a joint claim) must not be too high for Universal Credit to be payable.
If you live with a partner, you will 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.
Claiming when in education
You can still qualify for Universal Credit when you are in full-time education if you get a disability benefit such as Disability Living Allowance or Personal Independence Payment (PIP) and you have been assessed as having a limited capability for work.
How do I claim Universal Credit?
You must normally apply for Universal Credit online.
If you are unable to apply online or need help making a claim online, contact the Universal Credit Helpline on 0800 328 9344 (textphone 0800 328 1344).
You should have the following information ready when you begin your claim:
- your postcode
- your (and your partner’s) National Insurance number
- details of your bank or building society account (if you have one)
- any rent 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 you (or your partner) receive
- if you have children, their Child Benefit reference numbers
The initial interview
Once you have made your claim, you will need to attend an interview at your local Jobcentre Plus office. This is to confirm the information you gave when you made the claim and to discuss what you will need to do in order to receive the benefit.
You should be given a phone number to call to arrange the interview when you submit your claim online. If you haven’t been given a number, contact the Universal Credit Helpline on 0800 328 9344 (textphone 0800 328 1344).
If you have a disability or health condition that means you will 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.
You may also want to take someone with you to the interview for support or assistance, such as a friend, relative or a professional.
At this interview you will see an adviser called a work coach. The work coach will discuss your work prospects and the support you need to help you find work.
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?’, below).
The Work Capability Assessment
If you have a health condition or disability that prevents you from working, or limits the amount of work you can do, you may be able to get Universal Credit without needing to meet the work-related requirements. You may also be eligible for an extra amount of money in your benefit.
Your eligibility will be assessed under the ‘Work Capability Assessment’. You will need to provide details of your health condition or disability when you apply online and you may need to complete a ‘capability for work’ questionnaire (UC50).
The Department for Work and Pensions decision maker will use this to assess whether you:
- Have a ‘limited capability for work’ – in this case you won’t be expected to search for work, but you may have to fulfil some work-related requirements to do with getting ready for work
- Have a ‘limited capability for work-related activity’ – in this case you won’t have to meet any work-related requirements and you will be eligible for the ‘limited capability for work-related activity’ amount of Universal Credit.
For more details about the points system used to make this assessment, including advice on completing the capability for work questionnaire, read our supplementary guidance on the Work Capability Assessment (PDF, 98KB).
What conditions do I have to meet?
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 (see above). Your benefit is likely to be reduced (‘sanctioned’) if you fail to meet a work-related requirement.
The tasks you agree will depend on your personal situation. In some circumstances, none of the work-related requirements will apply to you. This will be the case if you:
- are responsible for a child under the age of 1
- have regular and substantial caring responsibilities for a severely disabled person
- have a limited capability for work-related activity. This is tested under the Work Capability Assessment (see above).
If work-related requirements do apply, there are 4 different types of requirement that may be included in your claimant commitment, depending on your circumstances. 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 one 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 are 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
Here you are required to take reasonable action to get paid work (or more work if you are already working part-time). This can include:
- searching for work
- applying for jobs
- creating and maintaining an online job profile
- registering with employment agencies
- seeking references
You will be expected to search for work for a minimum amount of time each week – usually set at 35 hours. The work you are searching for must also amount to at least 35 hours a week.
In each case, the Department for Work and Pensions may agree to a reduced time if you have caring responsibilities or a physical or mental impairment.
The work-availability requirement
You are normally required to be able and willing to take up paid work (or more work if you are already working part-time) immediately. You must also be able and willing to attend a job interview immediately.
If you are 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 cannot be expected to be available for such work or in such a place.
How much is Universal Credit?
The amount of Universal Credit you are paid depends on your circumstances. It is worked out on a monthly basis by comparing your financial needs with your financial resources.
Set amounts for different financial needs are added together to give you a ‘maximum amount’. This is 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’. 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 is always included in your maximum amount. The amount you are entitled to depends on your age and whether you are claiming as a single person or with a partner:
- single claimant aged under 25: £251.77 a month
- single claimant aged 25 or over: £317.82 a month
- joint claimants both aged under 25: £395.20 a month
- joint claimants where either is aged 25 or over: £498.89 a month
These are paid to cover different needs. Any amounts you are 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 £318.76 a month if you are unable to work because of a disability or health condition (such as Parkinson’s). It is tested under the Work Capability Assessment (see above).
- The carer amount – an amount of £151.89 a month is included in your award 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. An additional amount is included for each 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 are single or a couple. If you have savings or capital over £16,000, you cannot get Universal Credit.
If you have savings or capital under £6,000, this is disregarded.
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 are employed, your Universal Credit Payment reduces gradually as you earn more. This is known as the taper. For every pound that you earn (after tax and any deductions such as National Insurance or pension contributions) your Universal Credit payment reduces by 63 pence in the pound.
In some circumstances you are 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 a child.
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 disregarded in full, for example Disability Living Allowance, Attendance Allowance and Personal Independence Payment.
How is Universal Credit paid?
Your Universal Credit will be paid every calendar month in arrears. In Scotland you can choose to have it paid twice a month, if you prefer.
If you have a partner, you can choose who receives the payment. Alternative payment arrangements, such as bi-monthly payments, would only be made if the Department for Work and Pensions thought that you could not manage with a single monthly payment. Such arrangements would usually only be made for a temporary period.
It should normally take around five weeks to get your first payment of Universal Credit once you have made the claim. If you have difficulty budgeting at the beginning of your claim, you can ask for an advance payment, which you will have to repay. To apply for a Universal Credit advance, call 0800 328 5644 (textphone 0800 328 1344).