What is Universal Credit?

If you’re looking to apply for Universal Credit or just want to learn more about it, take a look at our guide to Universal Credit, explained simply and easily.

Universal Credit was introduced in 2013 and is a monthly benefit payment to assist with living costs. Universal Credit is a single payment, which replaces a number of other benefits, including:

  1. Child Tax Credit
  2. Working Tax Credit
  3. Housing Benefit
  4. Income-based Jobseeker’s Allowance (JSA)
  5. Income Support
  6. Income-related Employment and Support Allowance (ESA)

To find out more about Universal Credit and to see if it is available in your area, take a look at the Government’s guide to Universal Credit.

Who can apply for Universal Credit?

To be able to apply for Universal Credit, you must meet certain eligibility criteria based on your personal circumstances. Factors that are taken into consideration include:

  1. Where you live
  2. Who you live with
  3. Your age
  4. If you have children
  5. If you’re in full-time study or training courses

To check if you’re eligible for Universal Credit, you can use the Citizens Advice benefits checker.

How does Universal Credit work?

Universal Credit was introduced as part of an overhaul of the benefits system. Introduced in 2013, it has been slowly rolling out across the country ever since.

Universal Credit replaces a number of other benefits and rolls them all into one single monthly payment. If both you and your partner claim benefits, one payment will be made for the household each month.

Additionally, if you receive help to pay your rent, this payment will now be paid to you rather than directly to your landlord. You’ll then need to make sure that you use this money to pay your landlord.

How much do you get for Universal Credit?

The amount you can receive from Universal Credit depends on a number of factors, including your savings, any work you carry out and whether your household has a benefits cap.

The maximum amount of Universal Credit you can receive depends on your age and if you’re claiming individually or as a couple. Take a look at the table below for more information:

Personal CircumstancesMaximum Monthly Universal Credit Payment
Single claimant, aged under 25£251.77
Single claimant, aged over 25£317.82
Joint claimants, aged under 25£395.20
Joint claimants, aged over 25£498.89


On top of this, you may be able to receive extra money for:

  1. Having children
  2. Childcare costs
  3. Having limited capability for work element (abolished for most new claimants from 3 April 2017)
  4. Having limited capability for work-related activity element (LCWRA element)
  5. Being a carer
  6. Housing costs

How do I claim and apply for Universal Credit?

To claim for Universal Credit, you must make an application online via the gov.uk website. If you live with your partner, even if you’re not married, you must apply as a couple.

Before you start your application, you’ll need to have important documents to hand. These include:

  1. Bank account details
  2. National Insurance number
  3. Information about your rent and housing details
  4. Wage details
  5. Information about any savings you have
  6. Details about any childcare costs you pay

Once you’ve completed your online application, you’ll need to make an appointment at a Jobcentre Plus within 7 days. Here, you’ll be given a work coach to help you get back on your feet. If you don’t attend this appointment, you will not receive any Universal Credit payments.

How long does it take to get paid after signing on?

Once your claim for Universal Credit has been approved, it can take up to six weeks to receive your first payment. The payment process can be broken down into 4 main steps:

  1. Making your Universal Credit application
  2. Waiting days
  3. Assessment date
  4. Payment

What are Universal Credit ‘waiting days’?

If you make a new claim for Universal Credit, you will not receive any payment for the first week after submitting your claim. This period is known as your ‘waiting days’.

What is my Universal Credit assessment date?

The assessment date is the first day that follows your waiting days. This is the date that you will receive payments on going forward. It’s worth noting that you will not receive a payment on your first assessment date as Universal Credit is paid one month in arrears.

How is Universal Credit paid?

You will receive your first Universal Credit payment 6 weeks after making a successful application. This allows time for one week of waiting days, one month of arrears following your assessment date, and up to one week for your payment to reach you.

You will receive your Universal Credit payment directly into your bank or building society account, or into your icount current account with prepaid MastercardⓇ, on the same day every month.

 

Find out more about the icount prepaid Mastercard® account here

Key Facts: Can I claim Universal Credit if I am working?

If you’re working, you may still be able to claim Universal Credit. Read on to find out more.

How does working affect my Universal Credit payments?

If you work, you may still be able to receive Universal Credit payments. To work out your payment amount, two factors are taken into account – earned income and unearned income. Both of these impact your Universal Credit payments to different extents.

What is earned income?

Earned income includes any income you make each month, such as from part-time or full-time employment.

Earned income has a taper rate of 63%, meaning that for every £1 that you earn, your Universal Credit is reduced by 63p. This is reviewed monthly, so if you change your hours or earnings, your Universal Credit payment will be altered.

Work allowance

You may have a work allowance, depending on your individual circumstances. This allows you to earn a certain amount of money each month that does not result in your Universal Credit payment being reduced.

If you are responsible for a child, or you have a limited capacity for work, you will be able to earn up to £397 per month before your Universal Credit payments are reduced.

As of January 2018, work allowance is set at:

  1. £192 per month if your Universal Credit includes housing support
  2. £397 per month if you do not receive housing support

What is unearned income?

Unearned income includes:

  1. Contributory Employment and Support Allowance
  2. Bereavement Allowance
  3. Widowed parent’s allowance
  4. Widowed mother’s allowance
  5. Widow’s pension
  6. Contribution based Jobseeker’s Allowance
  7. Maternity Allowance
  8. Industrial Injuries Benefit
  9. Carer’s Allowance

This is taken into account when working out your Universal Credit allowance. For every £1 you receive per month in unearned income, £1 will be taken off your monthly Universal Credit allowance.

Can savings affect Universal Credit?

If you have savings, this may impact your eligibility to claim for Universal Credit.

If you or your partner are :

  1. Under state pension age, and have £6,000 or less in savings OR
  2. Over state pension age, and have £10,000 or less in savings

You will still be eligible for Universal Credit.

However, should you or your partner have more than £16,000 in savings, you will not be eligible for Universal Credit.

If your savings are between £6,000 and £16,000, you will still be eligible for Universal Credit, but you’ll receive less than you otherwise would have done, depending on the exact amount of savings you have.

Will Universal Credit affect my credit rating?

Benefits are considered a source of income, so will not have any impact on your credit rating in the future. Despite this, future lenders may ask if you have received benefits, and may take this into consideration when deciding to lend to you.

If you’re planning on applying for credit in the future, it pays to make sure you have a strong credit record. You could improve your credit record with icount, using the Creditbuilder™ tool.

Can my new Universal Credit payment be paid into my icount current account?

Universal Credit is paid once per month, and can be paid directly into your icount account. Simply give the account number and sort code from your icount card when filling in your details for Universal Credit, and your payment will automatically be paid into your account each month.

Tip: Your sort code will be 08-71-99

If you’d like your Universal Credit payment to be made into your icount account, take a look at our account options and apply today.

Useful Universal Credit Resources

Universal Credit helpline
If you need help with your Universal Credit claim, you can call the claim helpline free on:

Telephone: 0800 328 9344

Textphone: 0800 328 1344

Lines are open between 8am – 6pm, Monday to Friday (closed on bank and public holidays).

Tell others:

shortlink