Universal Credit is a new benefit which will replace six existing benefits and tax credits over the next few years. It is currently predicted that all parts of the UK will have switched over to Universal Credit for new claims by December 2018, however if you have three or more children or you are receiving pension credit you will still have to make a claim under the old benefits system even if you live in a Universal Credit area. If you are already receiving benefits under the old system (such as Tax Credits, Housing Benefit, Income Support, Employment and Support Allowance etc.) you will continue to receive these benefits until some time in 2019 when existing claims will be transitioned over to Universal Credit. To see if your area is one where new claims must be for Universal Credit you can check your postcode online.
Universal Credit can include amounts for children, childcare and housing costs, but you can’t normally get extra Universal Credit for a third or subsequent child born on or after 6 April 2017. Universal Credit will also allow you to claim the Sure Start Maternity Grant (usually if you do not have other children living with you) or free school lunches. You can claim Healthy Start vouchers if you are on Universal Credit and you are pregnant or have a young child, as long as you have earnings of £408 or less per month after tax and national insurance (this includes your partner’s earnings, if you live with a partner).
If you are already claiming benefits, and you never have to make a new claim, you will be moved onto Universal Credit eventually, but not until 2019. People who are moved onto Universal Credit by the Department for Work and Pensions will receive transitional protection if their previous benefits were higher. People who have to claim UC because of a change of circumstances will not receive transitional protection.
The benefits being replaced are:
- Income Support
- Income-related Employment and Support Allowance
- Income-based Jobseeker’s Allowance
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
People already on these benefits may be moved onto Universal Credit when their circumstances change or, from 2019, as part of a phased move to the new benefit. It will take several years to move everyone over to Universal Credit.
How much is Universal Credit?
Universal Credit includes an amount for you, and your partner if you live with one. It also includes amounts for children (but not usually a third or subsequent child born on or after 6 April 2017). UC also includes extra for disabled children (however, this may be less then you receive for disabled children in tax credits). It can include help with housing costs (rent, and in some cases, mortgage interest). If you are found to have limited capability for work-related activity then your Universal Credit will include an additional amount for this. It can include an amount for adults who care for a disabled person, and it can include an amount for childcare costs as long as you, and usually your partner, are working. Universal Credit is reduced depending on your income from work and any other income (such as other benefits, although some are disregarded). You can find more information on how Universal Credit is worked out on the Turn2Us website.
Most claims for Universal Credit will be made online. Universal Credit will normally be paid in one monthly payment, usually made to one person directly, and you will have to pay any bills out of that money, including your rent. If any of these arrangements are problematic for you, you can discuss exceptions with your personal adviser or work coach. Claimants will need to agree a claimant commitment about what they will do whilst receiving benefit. Depending on your circumstances, you may have to look for work or more hours of work, or you may need to take part in activities and/or attend interviews.
There is a lot more information about Universal Credit on GOV.UK and on the Money Advice Service website. If you are already claiming benefits, you can prepare for Universal Credit by making sure you have a bank account and thinking about how you would budget on a monthly basis from one payment.
This advice applies in England, Wales and Scotland. If you live in another part of the UK, the law may differ. Please call our helpline for more details.