06 Apr 2024

What is Universal Credit?

Find out what Universal Credit benefit is, who is eligible to apply, what you'll get and how your payments are calculated

Josh WilsonSenior researcher & writer

In this article

What is Universal Credit?
Universal Credit eligibility
How much in Universal Credit will I get?
How to apply for Universal Credit
Universal Credit payment
Universal Credit budgeting advance
How your earnings affect Universal Credit payments
Universal Credit in Scotland and Northern Ireland

What is Universal Credit?

Universal Credit is a government benefit scheme for those who are out of work or on a low income.

The scheme is replacing six older types of benefits and tax credits, and has gradually been rolled out across the UK. The government plans to move all households claiming those older benefits across to Universal Credit by the end of 2024.

The amount you'll be paid from Universal Credit depends on your circumstances, such as how much you earn, whether you have any savings, whether you have children or other dependents, are disabled or have a health condition, care for a disabled person or need help with housing payments.

You can claim whether you're working or unemployed, and you'll usually receive one payment each month.

Migration from legacy benefits

Universal Credit is replacing housing benefit, income-related employment and support allowance, income-based jobseeker's allowance, child tax credit, working tax credit, and income support.

If you receive any of these, you'll need to apply for Universal Credit when your circumstances change - for example if you move to a new council area or split up with your partner.

Some people will be moved automatically to Universal Credit, even if their situations don't change, through a process called 'managed migration'. These people may receive a 'transitional top-up' payment to make sure they're not worse off than they were under the old system. The top-up should continue until any changes in circumstances mean you're entitled to less - such as if your child moves out of the home, for example.

Find out more: whether you are making a new claim or moving over from existing benefits, the Money Helper Money Manager for Universal Credit claimants tool can offer personalised advice on budgeting for a single payment, the best ways to pay your rent and where to get help if you're struggling.

Universal Credit eligibility

Universal Credit is for those who are living in the UK, and need help with their living costs. You can claim it if you're working - including those who are self-employed or working part-time - and on a low income.

The main eligibility criteria are:

you must be aged 18 or over (although there are some exceptions for 16 and 17-year-olds)
be under state pension age
live in the UK
have £16,000 or less collectively in money, savings and investments.

If you live with your partner, you'll need to make a joint Universal Credit claim for your household, even if your partner is not eligible to claim. What you'll get will depend on your partner's income and savings, as well as your own.

If, say, your partner has reached state pension age, you might both be able to claim Universal Credit as a couple, but payments will stop once you're both over state pension age.

You can only claim Universal Credit while you're in full-time education in certain circumstances, which include:

if you live with your partner, and they are eligible for Universal Credit
if you're responsible for a child, either alone or as part of a couple
if you've reached state pension age and live with a partner who is below state pension age
if you're 21 or under, studying up to A Level or equivalent qualifications and don't have parental support
if you're studying part-time or doing a course where no student loan or finance is available.

If you have a disability or health condition and are in full-time education, you can claim Universal Credit if you're entitled to any of the following:

Personal Independence Payment (PIP)
Disability Living Allowance (DLA)
Child Disability Payment in Scotland (CDP)
Attendance Allowance
Armed Forces Independent Payment.

You might be asked to provide evidence of the course you're doing.

While Universal Credit is generally just for those over the age of 18, you can claim it if you need help with living costs when you're younger, but at least one of the following must apply:

you have a health condition or disability, and have medical evidence for it
you're caring for a severely disabled person
you're responsible for a child
you live with your partner - who is eligible for Universal Credit - and you're responsible for a child
you're pregnant and expecting your baby in the next 11 weeks
you've had a baby in the past 15 weeks
you do not have parental support - ie you don't live with your parents and you're not under the care of a local authority.

How much in Universal Credit will I get?

If you're eligible to receive Universal Credit, you'll qualify for the standard allowance.

How much you get depends on your age and circumstances, as shown in the table below:

Your circumstances	Universal Credit monthly standard allowance 2024-25
Single, aged under 25	£311.68
Single, aged 25 and over	£393.45
In a couple, both aged under 25	£489.23
In a couple, one or both aged 25 and over	£617.60

You may also qualify for additional elements. These will be paid on top of the standard allowance if they apply to you.

Universal Credit additional elements	Extra monthly amount
Child element - if you have one child (if born before 6 April 2017)	£333.33
Child element - second child / also first child if born on or after 6 April 2017	£287.92
Disabled child element	£156.11
Severely disabled child element	£487.58
Childcare element	£1,014 for one child; £1,739.37 for two or more children
Limited capability for work and work-related activity element	£416.19
Limited capability for work and started health-related Universal Credit and Employment Support Allowance claim before 3 April 2017	£156.11

To get an idea of how much you'll receive, you need to add up the maximum elements you're entitled to, then make reductions for your income, savings and other benefits.

An online calculator can help - those from Entitledto, Turn2us, Money Helper and Policy in Practice all work for Universal Credit and older benefits, and are government-recommended. Note that these calculators won't give accurate results for those under 18, students, prisoners, people living outside of the UK, those who are not a British or Irish citizen, or people living permanently in a residential care or nursing home.

If you receive several types of benefits, you might hit the 'benefits cap' - this is the maximum amount of benefits a household can receive in one year.

Throughout most of England, in 2024-25 the benefits cap is £22,020 for couples and families, and £14,753 for single people without children. In London, it's £25,323 for couples and families or £16,967 for single people without children.

How to apply for Universal Credit

You can apply for Universal Credit online on the gov.uk website. If you don't have a computer, you might be able to use one at your local job centre, library or local council.

Alternatively, you can apply over the phone on the Universal Credit helpline on 0800 328 5644.

Once you've started your claim, you'll usually be asked to go to an interview at your local job centre.

You'll need to explain your circumstances and show documents such as bank statements and payslips. You'll also be told what you need to do in order to continue claiming Universal Credit payments, such as showing proof that you're looking for work - this is known as your claimant commitment.

You'll be assigned a work coach, who will make sure you're doing the things outlined in your claimant commitment. If you don't do these things, you may face Universal Credit sanctions.

When to apply

If you think you're eligible to claim Universal Credit in your area, you should make a claim as soon as possible.

It will take several weeks to set you up on the system, and you won't receive your first payment for at least five weeks after the date you make the application.

Universal Credit payment

You usually receive Universal Credit payments once a month, paid into your bank, building society or credit union account. If you're claiming as part of a couple, you'll get one payment each month for your household, so you'll have to choose one account to receive the payment.

If you don't have a bank account and can't set one up, a different way of getting paid can be arranged through the Universal Credit helpline on 0800 328 5644

If you receive monthly payments, you'll be paid on the same day every month. If this date falls at the weekend or on a bank holiday, you'll be paid on the working day before. So, if your usual pay date is on a bank holiday Monday, you'll be paid on the Friday before.

Universal Credit budgeting advance

A Universal Credit advance is for those who can't afford to pay for essentials during the initial five-week waiting period.

You can apply online via your Universal Credit account, by speaking to your job coach, or by calling the Universal Credit helpline.

If you qualify, you'll be given a loan of up to 100% of your estimated entitlement before your regular Universal Credit payments kick in.

As this cash is classed as a loan, you'll have to pay it back. This is usually done by reducing your Universal Credit payments over the following year.

How your earnings affect Universal Credit payments

Your Universal Credit payments can be affected by how often your employer pays your wages, due to the Universal Credit assessment periods.

The assessment period runs for a full month, so could be 28, 30 or 31 days long depending on how many days are in the month.

This means that if you're paid every four weeks, every two weeks, or every week, there will be some instances where you get an 'extra' payment within the monthly assessment period.

See the table below for how this works:

How often you're paid by your employer	The impact
Every four weeks	Once a year, you'll get two sets of wages in one assessment period (rather than one)
Every two weeks	Twice a year, you'll get three sets of wages in one assessment period (rather than two)
Every week	Four times a year, you'll get five sets of wages in one assessment period (rather than four)

In the assessment periods where you're paid more than usual, it could mean you receive too much money to be eligible for Universal Credit.

You'll be told if your earnings are too high and whether you'll need to reapply.

Universal Credit in Scotland and Northern Ireland

The rules we've described in this guide apply to England and Wales. There are a few differences to be aware of if you want to claim Universal Credit in Scotland or Northern Ireland.

Scotland

Universal Credit claimants in Scotland can choose to receive payments twice a month.

If you're eligible to receive the housing payment, you can also choose whether you want this to be paid into your bank account, or directly to your landlord.

You'll be given these choices through your online Universal Credit account once you've received your first payment. If you change your mind, you can also make requests to have your payments changed through your online journal.

Northern Ireland

In Northern Ireland, Universal Credit is usually paid twice a month, but you can request to have a monthly payment.

If you're eligible for the housing payment this will be paid directly to your landlord.

Changes in circumstances with Universal Credit

As Universal Credit is paid based on your circumstances, any changes could affect your payments and you should report them to the DWP.

If you have other changes that aren't on the list, it's always best to report them just in case.

Changes that should be reported include:

leaving a job or getting a new one - even if you're doing voluntary work and don't get paid.
changing your bank details
claiming any new benefits, even if they're not paid yet
if you stop getting a benefit
getting a one-off payment, such as inheritance or compensation
getting new income that isn't from work
your rent going up or down
someone moving out of or into your home, or someone in your household going to prison
if you move home
moving in or splitting up with your partner
any of your children leaving full-time education, leaving home, going into local authority care, are disabled, having a child of their own, or becoming responsible for another child
you or your partner reaching Pension Credit age
you get ill or injured
the death of someone close to you, such as your partner, child, someone you were caring for, or anyone over the age of 18 who was living with you
any changes to your immigration status.

How to report a change in circumstances

If you have an online Universal Credit account, you can report a change by sending a message to your work coach.

You can also call the Universal Credit helpline on 0800 328 5644.

It's best to call from the phone number you supplied when you set up your Universal Credit account, as you'll have a shorter wait to get through and should be able to talk to the same person who handled your previous calls.

You should report a change as soon as you can. If you end up being paid too much because you failed to report sooner, your future Universal Credit payments may be reduced to recoup what you owe.

Universal Credit sanctions

A Universal Credit sanction is when you receive a cut in your benefits after failing to meet your claimant commitment without a good reason.

There are different levels of sanctions, depending on what you failed to do, and how many times you failed to do it. At most, a sanction could last for up to three years.

If you claim as a couple and one of you doesn't meet their responsibilities, your joint claim may be stopped.

If you're struggling with money while under a sanction, you can apply for a hardship payment. This is an emergency payout for things such as bills and food, but only certain people are eligible and it's usually given as a loan, so you'll have to pay it back once your sanction ends.

If you think you've been wrongly given a sanction, you may be able to ask the Department for Work and Pensions (DWP) to change its decision.

What if your Universal Credit payment isn't enough?

There are forms of financial support available if you're still struggling to afford essentials with your Universal Credit payments.

Alternative Payment Arrangements

If you're behind on your rent, you or your landlord can apply for an Alternative Payment Arrangement (APA), although it's best to speak to your work coach first.

An APA could get your rent paid directly to your landlord, make it so you're paid more frequently or allow you to receive split payments if you're part of a couple.

Local council help with housing costs

Your local council may be able to reduce your council tax payments and may grant you Discretionary Housing Payments if your Universal Credit payments aren't enough to cover your rent.

Other financial support

There are several other benefits and extra schemes that Universal Credit claimants might be able to receive - but it depends on where you live and your individual circumstances. These include: