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Universal Credit Explained


Universal Credit is a welfare benefit introduced in the United Kingdom in 2013 to replace six means-tested benefits and tax credits: income based Jobseeker's Allowance,

Housing Benefit, Working Tax Credit, Child Tax Credit, income based Employment and Support Allowance and Income Support.

Whether you can claim depends on where you live and your personal circumstances. Right now Universal Credit mainly applies to people who are newly unemployed and living in certain areas of the country. However, eventually it will be brought in for everyone claiming the benefits and tax credits that are being replaced.

You may be able to claim Universal Credit if you’re on a low income or out of work. You don’t need to do anything if you’re already claiming other benefits. There’s no limit to the number of hours you can work a week if you get Universal Credit. Your payment will reduce gradually as you earn more. You won’t lose all your benefits at once if you’re on a low income. Universal Credit is paid differently from other benefits. It’ll be paid once a month, usually into your bank, building society or credit union account.

If you live with your partner and you both claim Universal Credit, you’ll receive a single payment that covers you both. Contact the Money Advice Service to get help budgeting and planning for Universal Credit.

You can get help with housing costs. It’ll be paid to you as part of your monthly Universal Credit payment. You’ll have to arrange to start paying your own rent if you used to get Housing Benefit and don’t do this already.

The amount of Universal Credit you can get depends on your circumstances and income. Your Universal Credit payment is made up of a basic ‘standard allowance’ and any extra amounts that apply to you.

Your circumstances                                 Monthly standard allowance
Single and under 25                                                 £251.77
Single and 25 or over                                               £317.82
In a couple and you’re both under 25                  £395.20
In a couple and either of you are 25 or over       £498.89
Extra amounts
You may get more money on top of your standard allowance if you’re eligible.

Extra monthly amount

For your first child                                                    £277.08
For your second and other children                     £231.67 per child
If you need help with childcare costs                  85% of your costs (up to £646.35 for one child and £1,108.04 for 2                                                                                                                     or more children)
If you have a disabled or severely disabled child             £357.78 to £645
If you’re disabled or have a health condition                   £126.11 to £315.60
If you care for a disabled person                                       £150.39

You can get more money to help pay your housing costs. How much you get depends on your circumstances.

It can cover:
mortgage interest
some service charges
interest on a loan secured against your home
Work allowance

Your Universal Credit payment will reduce gradually as you earn more. For every £1 you earn your Universal Credit payment will be reduced by 65p.

You can earn a certain amount before your Universal Credit is reduced if you or your partner either:

are responsible for a child or young person
have a disability or health condition that affects your ability to work
This is called a ‘work allowance’.

Your work allowance will be lower if you get help with housing costs.

Your circumstances                                         Monthly work allowance
You get help with housing costs                                   £192
You don’t get help with housing costs                         £397

The benefit cap may limit the total amount of benefit you can get.


You can currently claim Universal Credit if you’re either:

a single person anywhere in England, Wales and Scotland
a couple or family living in certain areas

To get Universal Credit you must:

be 18 or over
be under State Pension age
not be in full time education or training
not have savings over £16,000

You’ll get less Universal Credit if you have savings over £6,000 or earn enough money to cover your basic living costs.

If you live with your partner you’ll need to make a joint claim as a couple. Your partner’s income and savings will be taken into account, even if they aren’t eligible for Universal Credit.

If you want to claim a benefit without your savings, your partner’s savings or their income being taken into account, you can apply for either:

‘new style’ Jobseeker’s Allowance (JSA)
‘new style’ Employment and Support Allowance (ESA)
You can apply for these if you’re entitled to apply for Universal Credit.

You can’t claim Universal Credit if you already get:

Income Support
income-based Jobseeker’s Allowance
income-related Employment and Support Allowance
income-related Incapacity Benefit

You may be able to claim other benefits if you don’t live in a qualifying area or you’re not eligible to claim Universal Credit.
Single jobseekers can claim Universal Credit in any jobcentre in Great Britain.

Universal Credit is being introduced in stages. If you live with your partner, or have children, you will only be able to claim Universal Credit in some areas. For Jobcentre areas where couples and families can claim Universal Credit click on Universal Credit map this will give you all the areas for the job centre plus near you to make a claim.

Further jobcentre areas will be added as Universal Credit expands.

If you're claiming other benefits Universal Credit will replace the following:

income-based Jobseeker’s Allowance (JSA)
Housing Benefit
Working Tax Credit
Child Tax Credit
income-related Employment and Support Allowance (ESA)
Income Support

If you’re already claiming benefits, your local Jobcentre Plus or Tax Credits office will tell you when you have to move to Universal Credit.

Once you’ve claimed Universal Credit, any benefits that it replaces will stop. You’ll start getting Universal Credit instead. Your benefits may end before your Universal Credit starts. If you won’t have enough money to live on before it starts, call the helpline to ask for an advance payment. You’ll repay it through your regular Universal Credit payments - they’ll be lower until you pay it back.

You’ll be told by HM Revenue and Customs (HMRC) that your tax credits will stop. You then need to end your claim. If you have any tax credits overpayments, you still need to pay them back.

Universal Credit may include money towards your housing costs. You’ll have to arrange with your landlord to start paying your own rent, if you don’t do this already. Talk to your landlord or Jobcentre Plus work coach if you think you’ll have problems paying your own rent.

If you move in with your partner who’s on Universal Credit you’ll have to end your other benefits claims. Your partner’s Universal Credit will become a joint claim and you’ll both have to sign new Claimant Commitments.

Your Universal Credit may be stopped or reduced if you don’t report changes in your circumstances straight away.

Changes can include:
finding or finishing a job
a change to your address
a change to your banking details
your rent going up or down
becoming too ill to work or meet your work coach

You don’t need to report any changes to your income unless you’re self-employed.

If you’ve been paid too much you’ll have to repay the money if you:

didn’t report a change straight away
gave wrong information
were overpaid by mistake
You could be prosecuted or fined if you give wrong or incomplete information, or you don’t report changes straight away.

You can report changes in your circumstances by:

using your Universal Credit online account - you’ll only have an account in some Jobcentre areas (ie Bath, Bridgwater, Frome, Minehead, Taunton, Wells)
calling the helpline
Universal Credit helpline
Telephone: 0345 600 0723 (landlines up to 9p, from mobiles 3p to 55p, all approximate)
Textphone: 0345 600 0743
Monday to Friday, 8am to 6pm

If you’re left without enough money to live on
Call the Universal Credit helpline to ask for an advance if your change in circumstances means you won’t have enough money to live on before your next payment.