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What is Universal Credit?

If you want to speak to someone about changes to benefits, you can phone the independent welfare changes helpline for free on 0808 802 0020 or contact your local Citizens Advice.

Universal Credit (UC) is a new benefit that from 2017 will gradually replace many existing benefits and tax credits. This page explains what UC is and how you may be affected by the changes if you're already getting benefits or tax credits.

What is Universal Credit?

Universal Credit (UC) is a single benefit that will be paid to you if your income falls below a certain level. UC is means tested, so payment will depend on other money your household has coming in. The higher your income is, the less UC you’ll get.

Universal Credit won't always stop when you start work or increase your hours. If you find a job but your income still falls below the level that the government thinks it's acceptable for you to live on, you'll still get UC payments to top up your income.

If you accept a job that only lasts a short time, your UC payments may decrease or stop but they'll start straightaway when the job ends. This is because you won't have to make a new claim for benefits like you do under the current system.

If you’re entitled to help with housing costs, Universal Credit will also contain a certain amount to pay your rent or mortgage. The housing cost element can be paid directly to your landlord.

To begin with, only people who are making new claims for benefits will get UC. If you're already getting certain benefits or tax credits, you’ll eventually be transferred to UC - but you do not need to do anything until the Social Security Agency gets in touch with you.

New conditions for getting Universal Credit

There will be conditions attached to getting UC. For example, if you aren't already working, you may have to show you're taking steps to prepare yourself for work.  If you’re working part-time, you may have to show you’re trying to increase your working hours.

These are called work-related conditions and are part of the claimant commitment you'll have to sign before you can get UC. If you don't do these things, you may lose some or all of your benefit.

Who will get Universal Credit?

You can get UC if you're aged between 18 and the age below which you qualify for Pension Credit. You must also be living in the UK and have the  right to reside here.  

You will qualify if you’re:

  • working, either employed or self-employed
  • unemployed
  • sick or disabled
  • caring for children or someone who’s disabled.

If you're self-employed

You can claim UC if you're self-employed. However, it will be assumed that you earn a minimum amount for the hours you work, regardless of whether you actually earn that amount from your business. This won't apply if you're still within the period allowed for business start-ups.

If you have a partner

You'll both have to make a joint claim for UC, unless they don’t meet the conditions for claiming. Any savings or income you both have will be taken into account even if only one of you makes the claim.

If you’re aged between 16 and 17

If you’re aged between 16 and 17, you’ll only be able to get UC if you:

  • have dependent children
  • are sick and have done a Work Capability Assessment (WCA) or are waiting to have one
  • are caring for a severely disabled person
  • are pregnant and it's at least 11 weeks before the date the baby is due.or you've had a baby within the last 15 weeks
  • don’t have parental support.

If you’re in education

You’ll only be able to claim UC if you:

  • have dependent children
  • are a foster parent
  • are a disabled student and meet certain requirements
  • have a partner who’s entitled to UC
  • are over the qualifying age for pension credit and have a partner who’s entitled to UC
  • are in non-advanced education and are aged 21 or under at the end of the academic year and have no parental support

How often will Universal Credit be paid?

UC will normally be paid twice a month directly into your bank account. If you don't have bank account you may be able to use Simple Payment. This is a card issued by the SSA that allows you to withdraw your money at PayPoint outlets, such as convenience stores and post offices. 

Will you be worse off under Universal Credit?

If you’re already getting one or more of the benefits to be replaced by UC, your claim will eventually be transferred to UC.  If the amount of UC will be less than you’re getting now in existing benefits, you’ll get more UC to make up the difference, unless your circumstances have changed. This is called transitional protection.

However, depending on your circumstances you may be affected by the Benefit Cap. This limits the weekly amount of income from benefits to £257.69 for a single person, and £384.62 for a couple with or without children and single parents. 

Do you need to do anything?

If you're already getting benefits, you don't need to do anything now. You’ll get a letter when it’s time to transfer your claim to UC.

Next steps

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