Universal Credit

Universal Credit is a new type of benefit designed to support people who are on a low income or out of work. It will replace six existing benefits and is currently being rolled out across the UK. The new system is based on a single monthly payment, transferred directly into a bank account. At present Universal Credit only affects newly unemployed people in certain areas of the country.

What is Universal Credit?

Universal Credit is a single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that you might be getting now.

It will replace:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credit
  • Working Tax Credit
  • Housing Benefit

What you need to know about Universal Credit

Universal Credit payments

Universal Credit is paid in the following ways:

It will be paid monthly into a bank account of your choice.

If you get help with your rent, this will be included in your monthly payment – you’ll then pay your landlord directly.

If you live with your partner and you are both eligible, you will get one monthly joint payment.

It can take several weeks after you make your claim to get your first payment.

Universal Credit and waiting days

If you make a new claim for Universal Credit you will not be paid for the first seven days. These days are known as waiting days. However, you should not let this delay your claim and apply as soon as you are eligible to do so.

The seven days’ waiting period won’t apply if you are in certain circumstances, for example if you’re terminally ill or vulnerable, have previously claimed Universal Credit, are splitting up from or moving in with a Universal Credit claimant, or are moving on to it from another benefit.

If you are worried about how you will manage for money until you get paid, please get in touch with our Money Advice team.

Working and claiming Universal Credit

There are no limits on how many hours a week you can work if you’re claiming Universal Credit. Instead, the amount you get will gradually reduce as you earn more, so you won’t lose all your benefits at once.

Get an estimate of how much Universal Credit you’ll be entitled to you can work it out using the Universal Benefit Calculator or use a benefits calculator at gov.uk to estimate all your entitlements including Universal Credit.

What happens to your Universal Credit when you start work or work more hours? Watch this video on YouTube to find out.

When does Universal Credit start and who does it affect?

Universal Credit is being introduced in stages. Most people won’t be affected to start with. At the moment, Universal Credit mainly affects newly unemployed people in specific areas of the country.

If you’re already claiming one or more of the benefits being phased out, you should carry on claiming as normal. You’ll be told when you need to do anything differently. However, if your circumstances change, you may be asked to claim Universal Credit instead.

Who is affected by Universal Credit?

At gov.uk you can see a summary of who is eligible to claim Universal Credit.

If you’re newly unemployed.

If you’ve recently become unemployed you might be asked to claim Universal Credit rather than Jobseeker’s Allowance.

Universal Credit is now available to single jobseekers in all Jobcentres. In some areas it is also available to couples and families too.

How to get ready for Universal Credit?

Even if you’re not likely to be affected straight away, there are some things you can do now to make sure you’re prepared for Universal Credit. Have a look at this video by the Money Advice Service to find out more.

How to claim Universal Credit

If you are eligible for Universal Credit, you are expected to make your claim online at gov.uk's UC application section.

You can find a list of the information you’ll need to provide on Making a Universal Credit claim.

If you and your partner are making a joint claim, only one of you will need to complete the online claim form, but that person will need to enter details for both of you.

If you want to ask any questions on Universal credit then please contact our Money Advice team on 01495 745910 or moneyadvice@melinhomes.co.uk