What is Universal Credit? We explain all

Universal Credit is the new benefit which is being introduced nationwide. It’s part of the Government’s overhaul of the welfare system.

The six credits that Universal Credit is replacing are:

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

How much?

The benefits calculator on the GOV.UK website estimates what benefit contributions you are entitled to.

And here’s our summary of how Universal Credit will affect claimants:

Income-based Jobseeker’s Allowance

The first payment is made after seven days. A Claimant Commitment will detail the tasks you will need to complete to remain eligible for payments. And you will have to attend regular appointments at the Jobcentre.

Income-related Employment and Support Allowance

With Universal Credit, claimants no longer have a cap on the number of hours you can work.

Universal Credit payments will be reduced in relation to the level of your income increase. Universal Credits are reduced gradually and if you are not earning enough you are entitled to top-up contributions.

New rules for young adults aged 18 to 21

From April 2017 Universal Credit claimants in this category will have to attend a Youth Obligation programme for six months. Following this they will be expected to apply for apprenticeships, traineeships or work placements.

Income Support

Universal Credit will eventually replace this benefit.

Working Tax Credits

If you become unemployed and begin claiming Universal Credit your working tax credits will stop. Also, if you begin living with a partner who receives Universal Credit your tax credits will stop as you become joint claimants.

Child Tax Credits

Universal Credits will replace Child Tax Credits, Tax Credits contributing towards childcare plus any additional payments. The additional payments cover contributions you receive towards childcare if you’re working, these can be up to 70% of registered childcare costs.

Housing Benefit

If you rent, your Universal Credit will be paid into your bank account. It will then be your responsibility to pay your landlord. If you receive contributions towards your mortgage repayments the money will paid directly to your mortgage lender.

Also note that once you or your partner starts earning, mortgage contributions will not be included in your Universal Credit.

Information for the self-employed

Universal Credit is not available to the self-employed. But if you are on Universal Credit and then choose to become self-employed you will be supported until your business grows.

The other benefits combined & how it’s worked out

The amount of money you get is calculated through a comparison of your basic financial needs to what you need to live on with your financial resources. These resources include the support you receive towards housing, children, childcare, if you have a disability, or if you are a carer.

Also note that cohabiting partners who are both eligible for Universal Credit will receive one joint, monthly payment.

How to apply

To be eligible you must be a resident in Great Britain, aged 18 years or over and no longer in education. But in exceptional cases you can claim Universal Credit if you are 16 or 17 years old with no parental support.

Claimants must be below Pension Credit age. But if in a couple and one of you is over Pension Credit age, you’ll both need to claim Universal Credit as a couple until you both reach Pension Credit age.

Find a local adviser to receive support and advice from.

When
Here’s a map of when and where Universal Credit is being rolled out.

Where
And here’s a link to create a secure digital identity to claim Universal Credit (limited service).