What is Universal Credit? Everything you need to know including how to apply
THOSE on low incomes are entitled to claim the government benefit Universal Credit.
The cash sum is paid monthly and is designed to help you with your living costs.
It's paid to those who are not currently in work, and it also helps to top up your income if you're employed.
Here, we explain everything you need to know about the benefit.
What is Universal Credit?
Universal Credit is a welfare scheme which was designed to combine several of the old "legacy benefits" into a single monthly payment.
The old legacy benefits it replaced are:
- Child Tax Credit
- Housing Benefit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Working Tax Credit
What elements does Universal Credit include?
Instead of receiving smaller amounts of different benefits, you will receive one monthly payment under Universal Credit - or twice monthly for some people in Scotland.
Almost all new claims for benefits will automatically be put onto Universal Credit.
Those getting Severe Disability Premium (SDP) under the old system can now be moved on to Universal Credit and may be entitled to the transitional SDP element.
If you already receive any of the six benefits Universal Credit is replacing, you can not claim Universal Credit at the same time.
You will need to move over to the new system and start making a claim for Universal Credit instead of these older benefits.
However, everyone will be moved over by late 2026.
You can also be moved over when you have a change of circumstances that ends one of the old benefits.
If your circumstances change, like if you get a pay rise or move in with a partner, you should inform the Department for Work and Pension (DWP).
Who is eligible for Universal Credit?
Whether you are eligible will depend on your specific circumstances.
You may be eligible if you meet all of the following criteria:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
Your partner’s income and savings will be taken into account, even if they are not eligible for Universal Credit.
There are other factors that might make you eligible for a claim, for instance, if you care for a disabled person, you're in further education or you've recently had a child.
You can read the full eligibility criteria on the government's website.
How to apply for Universal Credit
Applying for Universal Credit should be relatively easy.
You have to go online and create an account, then there are further steps to take.
Creating an account
Once you've created an account you must make a claim within 28 days otherwise you'll have to start the process again.
If you live with your partner, you'll both have to create accounts and you'll join them together when you claim.
If you're struggling to claim online you can use the Universal Credit helpline which is 0800 328 5644.
What you'll need
To apply online you'll need your bank, building society or credit union account details.
On top of this, you'll need an email address and access to a phone.
If you don't have these things, you can call the Universal Credit helpline or go to a job centre.
To find your nearest job centre, you can use its website.
After you've offered your bank details, you will have to provide your driving licence, passport, debit or credit card and payslip of P60.
In addition, you'll need to prove how much rent you pay, your earnings, any disability or health condition that affects your work, how much you pay for childcare and your savings and any investments, such as shares or a property you rent out.
LATEST ON UNIVERSAL CREDIT
How much is Universal Credit?
Universal Credit payments are made up of a standard allowance and then various additional payments that depend on your circumstances. Since last April, the sum has risen in line with the consumer price index (CPI) level of inflation for September 2023.
Everyone who is accepted on Universal Credit is entitled to a Standard Allowance:
- Single and aged under 25: £311.68 per month
- Single and aged 25 or over: £393.45 per month
- Joint claimants both aged under 25: £489.23 per month
- Joint claimants where one is aged 25 or over: £617.60
You may get additional payments, for instance, if you:
- have children
- have a disability or health condition which prevents you from working
- need help paying your rent
It's worth bearing in mind that Universal Credit payments are typically increased every April to keep up with inflation - known as "uprating".
This is done so that payments can keep up with the rising cost of food, clothes and other goods, which gradually rise over time.
Through Universal Credit, you can also get money to help pay your housing costs.
How much you are entitled to depends on your age and circumstances.
You can use a benefits calculator to see how much you're likely to get in total.
You are assessed every month and if things change, it might affect how much you are paid for the whole assessment period.
If you start earning more from work, you'll get a reduction in payments due to something called the taper rate.
As your income increases, your payment will reduce until you’re earning enough to no longer claim Universal Credit - then your payments will be stopped.
If your earnings change from month to month, you may find you need to keep reapplying for Universal Credit.
You can find out exactly how much you can earn without reducing your payments or losing them altogether with our step-by-step guide.