What is Universal Credit?
Universal Credit is the name of a benefit payment that can be paid to UK residents who may be working or currently unemployed. First introduced in 2010 and rolled out from 2013, it replaces six previously-separate benefits:
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Working Tax Credit
• Child Tax Credit
• Housing Benefit
• Income Support
These six benefits are now referred to as legacy benefits by the Department of Work and Pensions (DWP).
Who’s entitled to claim Universal Credit?
There are a number of criteria that impact your eligibility for Universal Credit. You may be eligible if:
• You’re a resident of the UK
• You’re either unemployed or on a low income
• You’re aged 18 or over, and you’re under State Pension age
• You have less than £16,000 in savings between you and your partner
There are some exceptions if you’re aged 16 or 17 – if any of the following apply, you can make a claim:
• You have limited capability to work, or you’re waiting for a Work Capability Assessment (and you have medical evidence to show why you’re waiting for the assessment)
• You’re responsible for a child or you’re caring for a severely disabled person
• You’re pregnant and your child is due in 11 weeks or fewer
• You don’t have parental support, and you’re not already under local authority care
You can also sometimes apply if you’re a student too. However, for all the above circumstances, it’s worth bearing in mind that if you live with a partner, their income and savings will be taken into account when you apply, even if they don’t apply themselves.
How to apply
You’ll apply for Universal Credit online on the government’s official website. You’ll need an email address and the details of your bank account, along with the information on your finances such as payslips, rent details, how much you have in savings and any childcare costs you pay.
You’ll also need a form of ID to verify your identity online. This could be your driving licence, passport or a credit or debit card.
If you’re living with your partner and both of you want to claim Universal Credit, you’ll need to make a joint application, even if you aren’t married.
The faster you complete your application online, the sooner you’ll get paid. That’s why it’s really important to make sure you seek help immediately if there’s anything stopping you from completing your application online, such as a disability or if you’re simply unsure of how to fill in a section of the claim form.
When is Universal Credit paid?
Universal Credit is paid every month, although in Scotland you can request for it to be paid fortnightly if you prefer. If you live in Northern Ireland, the default payment is fortnightly but you can switch it to monthly if that suits you better.
The day of the month that you apply for Universal Credit will become your payment date going forward. So if you apply on the 1st of the month, then you’ll be paid on the 1st in the following months, although be aware that it can take up to seven days for money to then reach your account, so you may not get the payment until the 8th.
Universal Credit is paid in arrears, so it can take up to five weeks to be paid from the date you apply. If this leaves you in hardship you can apply for an advance, but this will be repaid from your first 12 months of Universal Credit payments.
How much will you get?
The amount of Universal Credit you’ll receive will depend entirely on your circumstances, and these are assessed every month. There’s a standard allowance for eligible people that varies depending on whether you’re single or a couple, and whether you’re under 25 years old or whether you’re older. This ranges from £342.72 up to £594.04, and then it can be topped up by extra amounts if you have children, need support with housing, have a disability or if you care for a disabled person.
Can you work when being paid Universal Credit?
You are allowed to work while you’re being paid Universal Credit, but your income will impact how much benefit you receive. Every £1 you earn in income reduces your benefit payment by 63p. If you’re responsible for a child or you’re living with a disability or condition that impacts your ability to work, you’ll have a work allowance – an amount you can earn before your benefit payment is impacted. This is £292 per month if you get housing cost help, and £512 if you don’t.
Do savings have an impact?
Yes – if you (and your partner) have any savings then it may impact how much you get paid. If your combined savings are more than £6,000 you’ll receive a lower benefit payment, and if you’ve got over £16,000 in savings between you then you won’t be eligible at all for Universal Credit.