Universal Credit is a new means-tested benefit for people of working age. It's 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
Since 2019, anyone making a new claim for a working-age means-tested benefit will need to claim Universal Credit rather than the older benefits listed above.
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 reached 65 on November 2018 and will then rise to 66 by 2020, in line with State Pension age)
- live in Great Britain and not be subject to immigration control
- not be in education (unless you're claiming a disability benefit, see 'Claiming when in education' below)
- have accepted a claimant commitment (see 'What conditions do I have to meet?').
In addition, you must meet the financial conditions.
- You (and your partner, if you're 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're making a joint claim) must not be too high for Universal Credit to be payable.
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.
Claiming when 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 (PIP) and you've been assessed as having a limited capability for work.
For those who receive the Severe Disability Premium as part of your existing means-tested benefits, the law currently does not allow you to make a Universal Credit claim, instead you remain on your existing benefit(s). For more information on this rule please contact our Helpline on 0808 800 0303.
How do I claim Universal Credit?
You must normally apply for Universal Credit online.
If you're unable to apply online or need help making a claim online, contact the Universal Credit Helpline on 0800 328 5644 (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've made your claim, you'll 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'll 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'll see a work coach, who will discuss your work prospects with you, 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 stops you from working, or limits the amount of work you can do, you might be able to get Universal Credit without needing to meet the work-related requirements. You might also be eligible for an extra amount of money in your benefit.
Your eligibility will be assessed using the ‘Work Capability Assessment’. You'll 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'll 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 might 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. You're exempt 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)
- 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 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'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
Here you are 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 job profile
- registering with employment agencies
- seeking references.
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 a reduced time 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) straight away. 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 can't be expected to be available for such work or in such a place.
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 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 amount, deductions are made for any earnings and other income you receive. The resulting amount 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 and whether you're 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'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 £336.20 a month if you're unable to work because of a disability or health condition (such as Parkinson’s). It's tested under the Work Capability Assessment (see above).
- The carer amount – an amount of £160.20 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're 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're 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 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 might 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 completely, for example Disability Living Allowance, Attendance Allowance and Personal Independence Payment.
How is Universal Credit paid?
Universal Credit will automatically be 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.
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 short amount of time.
It should normally take around 5 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'll have to repay later. To apply for a Universal Credit advance, call 0800 328 5644 (textphone 0800 328 1344).
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