Universal Credit FAQ

| posted in: FAQ, Universal Credit | 134 Comments
[vc_row][vc_column][vc_tta_accordion active_section=”1″ collapsible_all=”true”][vc_tta_section title=”What is Universal Credit?” tab_id=”1524486610571-afa8fdf7-f69e”][vc_column_text]Universal Credit is a single monthly payment for households on low to middle incomes whether they are in-work or out-of-work, as long as capital is less than £16,000.

Universal Credit replaces the following 6 current benefits:

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

The combination of in-work and out-of-work benefits means that Universal Credit will be available to households with a wide range of incomes.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Why is Universal Credit being introduced?” tab_id=”1524486610645-7f002a3a-fb9d”][vc_column_text]Universal Credit is being introduced to address some problems with the current benefit system, namely making things simpler for claimants by rolling multiple benefits into one single application and one single payment. Because there are no hours rules to claiming, and in-work benefits and out-of-work benefits are combined, it makes it easier for people as they move between jobs or their situation changes. It also enables claimants to retain more of their earned income so they will always be better off as earnings rise.

The DWP states that Universal Credit aims to make work pay, makes it easier for people to move in and out of work, makes the system easier to understand, reduces fraud and error, and save taxpayer money.[/vc_column_text][/vc_tta_section][vc_tta_section title=”When will Universal Credit go into effect?” tab_id=”1524486715279-2026a19b-e192″][vc_column_text]Universal Credit is being introduced gradually throughout the UK with roll-out by JCP areas and is expected to be in all areas by December 2018.


Where Universal Credit has been introduced, all new claims must be for Universal Credit rather than legacy benefits. Households that are currently in receipt of other in-work and out-of-work benefits will move to Universal Credit if they have a significant change of circumstances. The exception to this is households with 3 or more children who will remain in receipt of legacy benefits until 1st February 2019. Changes of circumstances that would trigger a move to Universal Credit include:

  • A change in employment status
  • Partner joining or leaving the household
  • Someone becoming, or no longer being, a carer
  • Moving from contributory ESA to income-based ESA
  • Failing the work capability assessment
  • Moving home to another local authority

Any households remaining in receipt of legacy benefits in July 2019 will be moved to Universal Credit at some point between July 2019 and March 2022 under managed migration.[/vc_column_text][/vc_tta_section][vc_tta_section title=”How is Universal Credit Calculated?” tab_id=”1524486775766-8922bb88-d600″][vc_column_text]Universal Credit is made up of a standard allowance per household (which is dependant on household circumstances) plus additional elements for housing, being a carer, childcare, incapacity for work, and child disability. The sum of the allowance and elements is the maximum Universal Credit.

The Universal Credit award will be the maximum amount if you have no other income and you have savings or capital of £6,000 or less. If you have income or savings, deductions are made from this maximum. The maximum award is reduced by:

  • The amount of non-earned income (e.g. contributory ESA)
  • 63p for every pound of net earned income
  • Notional income derived from savings over £6,000

Not all income is taken into account. Some types of non-earned income are ignored (such as disability benefits or Child Benefit) and earned income may be subject to a work allowance – this is the amount that can be earned before maximum Universal Credit is reduced. A work allowance is applied if you have children or have limited capability for work because of illness or disability.

Employer-paid benefits, such as Statutory Maternity, Paternity, Adoption and Sick Pay are treated in the same way as earnings.

Unearned income that will be taken into account includes Carers Allowance, New style Jobseeker’s Allowance (JSA), New style Employment and Support Allowance (ESA), and income from pensions.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What if I have savings over £16,000, capital or investments?” tab_id=”1524486838243-cea1a598-d23d”][vc_column_text]You cannot claim Universal Credit if you have savings, capital or investments over £16,000. This does not include the house you live in but does include any other property or capital you may own. You can deduct 10% of the costs of any capital if there would be a cost associated with realising that capital (e.g. if you had to sell an investment or property). If you currently receive tax credits and have savings, capital or investment over £16,000 you will no longer receive any support under Universal Credit.[/vc_column_text][/vc_tta_section][vc_tta_section title=”How do I claim Universal Credit?” tab_id=”1524486871356-4af491c9-00e5″][vc_column_text]Universal Credit must be claimed online. You can apply here. Application takes about 40 minutes and you will need to ensure all your documentation (your National Insurance number, bank details, employer details, immigration status etc) are at hand.

If you have difficulty applying online, you can call the Universal Credit helpline who can guide you through the process or tell you where other help may be available.

As part of the claim process you will need to verify your identity. This is done with reference to other accounts you may hold (such as bank accounts). Sometimes it is not possible to verify your identity online. In which case, you will need to do this at your local JCP. You will be told if this is the case when you make your claim.

Your claim will start from the day you complete your online application.

After you have completed your application you will need to make an appointment within 7 days at your local JCP to discuss your situation and your job search (if you are expected to look for work). Details of how to book an appointment at your local JCP are shown at the end of the claim process. If you are disabled and cannot get to your local JCP, a visit can be arranged.

If you have any questions about making a claim you can call The Universal Credit helpline, or visit your local Jobcentre.

Universal Credit helpline

Telephone: 0800 328 9344

Textphone: 0800 328 1344

Monday to Friday, 8am to 6pm

[/vc_column_text][/vc_tta_section][vc_tta_section title=”How will Universal Credit be paid?” tab_id=”1524486920318-547e11b7-09bf”][vc_column_text]In general, Universal Credit will be paid in one monthly payment to the bank account of a designated person for the whole household. Payment will arrive in the bank account up to 7 days after the end of the assessment period. Universal Credit will be paid in arrears which means that a successful claimant will receive their first Universal Credit payment 1 month and 7 days after they’ve made their claim..

If you need money before the payment is made you can request a payment in advance. The DWP will need to know why this is required. If you receive a payment in advance your Universal Credit will be reduced for 12 months whilst this is paid back.

The DWP can make different arrangements for payment if there is a good reason. For example, if you need your benefit paid more frequently, or you need the payment split between you and your partner, or you don’t have a bank account. You would need to discuss your reasons with the DWP.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Does Universal Credit include support towards rent costs?” tab_id=”1524486961388-b8b09717-2c72″][vc_column_text]For most tenants, Universal Credit will include a rent element. This may not the same as the amount of rent you have to pay. You will need to make your own arrangements to pay your full rent to your landlord.

For some local authority or Housing Association tenants the rent element can be paid directly to your landlord. If you would like this to happen, you will need to explain the reason to the DWP. If you have rent arrears above a certain level, your landlord can request direct payment. Where payment is made directly to your landlord it may not cover all your rent and you may still have to pay some of your rent from your Universal Credit.

If you live in temporary accommodation because of previous homelessness, or your housing contains an element of support (eg you live in a hostel) your rent will be met through Housing Benefit which is administered by the local authority. You will still receive Universal Credit for your personal allowance.[/vc_column_text][/vc_tta_section][vc_tta_section title=”What will happen when I move, start, or end work?” tab_id=”1524486998794-49ae2f75-4240″][vc_column_text]Universal Credit is designed to make the transition in and out of work, and between jobs, easier. Under Universal Credit you will always be able to keep a proportion of your earned income. This means you will be better off if you earn more. To find out how your Universal Credit entitlement would be affected by moving into work, try our free Universal Credit calculator.[/vc_column_text][/vc_tta_section][vc_tta_section title=”I appear to be worse off under Universal Credit” tab_id=”1524487034901-8625ac08-5e6d”][vc_column_text]Any change of benefit scheme will have implications for claimants; there will always be some that lose support and some that gain support.

If you move to Universal Credit before July 2019 you will not be eligible for any transitional protection.  This is because you made a new claim or had a change of circumstances. Any households moved to Universal Credit after July 2019will receive transitional protection to ensure that they do not lose any benefit support. This protection will last until they have a significant change of circumstances or make a new claim.

If you are self-employed and move to Universal Credit after July 2019 transitional protection may not make up all the loss in support.[/vc_column_text][/vc_tta_section][vc_tta_section title=”I am in work, but earn less than 35 hours a week at the national minimum wage. Will my eligibility for Universal Credit be affected if I don’t seek more hours?” tab_id=”1524487071692-06a46d3a-205a”][vc_column_text]Households earning below a certain threshold will be asked if they can take reasonable steps to increase their earnings. For claimants without any caring responsibilities, fully able to seek work, this will mean earnings of at least 35 hours x the national minimum wage.

You will need to discuss how many hours you are able to work when you have your interview at the start of your claim. If you need to look for work, or increase the hours you work, this will be recorded in your claimant commitment together with the steps you agree to take to make this happen. If you do not fulfil your claimant commitment you could be sanctioned.[/vc_column_text][/vc_tta_section][vc_tta_section title=”Under Universal Credit, who will be entitled to mortgage support?” tab_id=”1524487110762-4a741a57-74b5″][vc_column_text]If you own your home or you are in a shared ownership properties you may be able to claim mortgage support under Universal Credit if both you and your partner (if relevant) are out of work. If you or your partner have any earned income you will not be able to claim mortgage support. If you are eligible, then you can claim mortgage support 9 months after you first claimed Universal Credit. Mortgage support is in the form of a loan at low interest rates. You will need to repay this loan when you sell your house.[/vc_column_text][/vc_tta_section][/vc_tta_accordion][/vc_column][/vc_row]

134 Responses

  1. Hi,
    Struggling to see if my student loans will affect us when we move over in 2019. Please can you help?
    I am a full time student, also work a day a week on my day off( term time only). My husband works full time. We currently only receive child tax credit. Will any grants/ loans applied for next year be taken into consideration for us? We’ve been told as we don’t get help for rent it won’t but everything I read looks like it will.

    • Deven Ghelani

      Hi Sam, You can use our benefits calculator at https://www.betteroffcalculator.co.uk/#/calculator/new/step1 to see if you will be eligible for any benefits. In general, most grants or loans (whether you take them or not) are counted as income and taken into account to see if you qualify for any means-tested benefits. Certain loans/grants are excluded and these are shown in the calculator. Given that you have a child you are certainly eligible to apply for means-tested benefits – whether you qualify will depend on your husband’s income and your student income. If your husband is working full time you should consider applying for Working Tax Credit (from HMRC), Housing Benefit (from your local council – if you rent your home) and Council Tax Support (from your local council)

  2. Universal Credit has been an absolute nightmare for me, leaving me over £400 short per month than the old JSA which was bad enough and left me with only £3 per week for total expenses after rent payments.

    I am self-employed and recently started a new business. Not only was my UC application (in June) severely delayed with the first payment only made to me three months after application date (August). My housing application was only processed in September, four months late. Last month DWP suddenly started deducting 65% of my estimated take-home pay on zero reported earnings meaning I received a total of £417.97 per month to cover rent, bills and food in Central London.
    Although my self-employment is new I was forced to report MIF which apparently should not be applicable to me. I am also given no clear breakdown and explanation how this useless system works that 65% can be deducted at all from the minimum income floor if a person is on zero earnings.

    I am infuriated at the nonchalant treatment I have received and the refusal for DWP to answer my questions each time I want a clarification. They also do not process complaints although I have asked for a review to the deductions for many weeks now. I face daily eviction notices due to all these errors. There should be a class action lawsuit against this horrible system and the people who created it. It’s unacceptable treatment of people.

    • Zoe Charlesworth

      Hi AJ, I hope this has been sorted for you by now. There were certainly some issues with backlogs and staff training in some of the benefit centres but I have heard that these are now improving. It does sound like the Minimum Income Floor should not be applied in your case as your business is new. If you started your business within 12 months of applying for Universal Credit you should have 12 months when the MIF does not apply. If you started your business whilst on Universal Credit you should have 12 months from the start of the business. If this has not been sorted out yet you could see if your local council could help with payments towards your rent whilst you wait for it to be sorted. They have discretionary funding (Discretionary Housing Payments) to assist tenants. It may also be worth seeing if your local MP or Councillor can put pressure on UC on your behalf – this sometimes produces results.

      • @ZoeCharlesworth

        I am sorry but you must be living in some form of fairytale land that the rest of us have no access to.

        You appear to assume there is a functioning system out there, always available to give some form of emergency help to people. I actually laughed when you suggested that the council will step in and provide Discretionary Housing Payments! Clearly you have little first hand experience how the system works or you get some form of special treatment. This option exists only on paper at my local council, which is supposedly the wealthiest in the country. It does NOT exist in real life. If it’s this bad here I cannot imagine how it functions with other councils.
        Our local council doesn’t even respond to DHP applications and never do they grant them. In the past five years I have made four DHP applications in emergency cases. Not even one was responded to by the council (who always pretend they ‘never received’ the applications even if they are filed right in front of them). Not even one was granted after I made further efforts to file the application and wait for the response right there since they otherwise won’t process the application. They explained they do not take applications for DHP. Especially now with Universal Credit, they do not want to manage anything that has to do with housing benefits and refer you back to the Job Center. A response from them now takes one month. What will you live on for that one month? I am not surprised the Grenfield fire happened under the inept eye of very same council.

        The Job Center does not offer and does not provide any information for advance payments even when they know they have made errors. I’ve asked for advanced payments during the 24 weeks of errors committed to my Universal Credit application and the missing payments. Each time I was told that this is not being offered except in ‘exceptional cases’. Obviously extreme delays to payments was not exceptional enough.

        Furthermore, your statement about MIF contradicts what the Job Center is telling me. The Job Center told me that even if MIF is ‘recommended’ after the 12 months they can demand MIF at any time and start cutting the benefits if self-employed people don’t meet their expected targets sooner, according to the training they have received. This decision can be made by the Job Center which I find astonishing.

        As if this is not bad enough it gets no better with housing benefits. The Job Center has informed me that the new system require housing paid for any form of temporary housing – common in London where there is a housing crisis (even if that housing is on long-term basis) – to be re-applied MONTHLY as a “change in cicumstances”. This is just another failed feature in the new system. Why should “changes of circumstances” have to be re-applied each month if there are no changes to circumstances? It gives the wrong impression in the system that I keep constantly reporting changes to circumstances while I am told I have to do it. The explanation given is that “some” temporary housing is on a daily rate and payments change if people don’t stay in them regularly. Why should those circumstances be mixed with others where long-term arrangements are made and letter proof provided to prove so?

        The benefit system does not function properly. It’s been put together by ignorant and insensitive people. It victimizes people which is why many are pushed over the edge and commit suicides over it.

        I have been put over £3,000 in debt from high-interest loans to cover my rent for months when errors to my application was made and payments were outstanding. The interest keeps accumulating. The sheer stress caused me serious medical conditions which I am now having to deal with. I have been offered nothing but a paltry £50 in compensation! It’s a disgrace.

        Those responsible should be taken to court in a class-action lawsuit. No government must be allowed to play Russian Roulette with people’s lives in this manner. Europeans never go through this volume of nightmares with their social support system.

        • Zoe Charlesworth

          Hi AJ, I am sorry that you have faced these responses. Your council is given a sum of money which they MUST use for DHPs but this can be used at their discretion. This is for claimants receiving Housing Benefit AND the housing element of Universal Credit. Could you let me know which council this is so I can have a look at their policy?

          Short Term benefit Advances must be considered if you can prove financial hardship (ie you are having difficulty paying rent or affording food). It seems that this was not followed in your case.

          Regarding MIF, this is not discretionary. You can find the guidance at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/661668/admh4.pdf. The relevant part are:

          H4100 A start-up period is a period of 12 months. It applies from the beginning of the assessment period in which the Secretary of State determines that a claimant is, for the purposes of UC, in gainful self-employment where the claimant 1. has commenced their self-employment as their main employment in the 12 months before the beginning of that assessment period and 2. is taking active steps to increase their S/E earnings to the level of their individual threshold .
          H4101 Where a claimant is determined to be in a start-up period then the minimum income floor cannot apply . However, the actual earnings from S/E have to be taken into account

          It does appear that a number of things have gone wrong with your claim – I wish you luck in sorting it out

          • My local council is Kensington & Chelsea. They have NEVER honoured DHP in extreme duress even when CAB referred me to them. Not even one of my applications over the years received a response. My emails were ignored.
            STBA has never been offered to me although I went through absolutely maddening hardship with only £417 paid to me to cover two months and had to beg to not lose my housing. I continue to be in debt solely due to six months of errors made to my UC application and faulty cuts to my payments. The 12-month start-up period does not seem to be authentic because they still insist that I may be cut from it at any moment and I continue to have to report MIF. Due to the errors they made to my application and the debts they put me in forcing me to take loans, my start-up period was severely delayed and restricted and only started last month. I have been denied a new starting date for my start-up period so I can catch up. I demanded a new starting period since my application has been in error for six months.

            This system makes conditions worse for people, and no one wants to actually help resolve anything. They have no remorse at all for creating massive problems for me which I did not have until they created a mess out of my application.

  3. What happens when there are 5 weeks in the month, do we miss a weeks payment on universal credit?

    • Zoe Charlesworth

      Hi Lorraine, if you receive 5 weekly payments of earnings or another benefit (such as Carers Allowance or contribution-based ESA or JSA) this will increase your income in that calendar month so your UC will reduce accordingly. If you receive 2 lots of four-weekly payments in a month (e.g. if you work in retail you are likely to be paid every four weeks) the difference may be enough to take your UC to zero. If this happens you will need to remember to re-start your claim the following month.

  4. I am a single parent with a child under 2. I am in receipt of ESA (support group) £188 per week. I also receive PIP daily living allowance standard rate of £222.70 per 4 weekly. I also get child tax credits £248.60 per 4 weekly and child benefit £82.40 per 4 weekly. I get full housing benefit at the moment. I have recently been offered a 2 bedroom house through the social, and I have been told the area I am moving into, have all moved over to universal credit, meaning I cannot claim housing benefit – I will need to make a new claim for Universal Credit. I am wondering what I will lose? My workings out were around £244 worse off per calendar month. I’m guessing a move in address is a change in circumstances – enough for me to lose out on The transitional payment protection top-up. Help please!

  5. Due to my own lack of research, I ommitted to declare a 1 hour a week for which I consider casual work . when I notify UC, what will happen? The earnings were under £20, which I thought you could earn without declaring

    • Zoe Charlesworth

      Hi Amber, the amount of earnings that is disregarded under UC is different to under the old benefits. If you have a child or are disabled or ill, there is a work allowance so this will make no difference to your claim if it is your only earnings (although you will still need to inform DWP). If you do not fit in either of these categories then all your earnings is taken into account. You need to inform the DWP as soon as possible and they will recover any over payment from ongoing benefit.

  6. I have moved over from ctc & wtc to universal currently having an on going issue of my son who under ctc i was entiltled to continue to claim until his 20th birthday (He’s in full time education) or as long as I was still claiming child benefit for him which I am! However UTC maintain I am not entitled to claim for him as he is 19 and classed as a non dependant which is a complete contradiction to child benefit and ctc how can 2 government funded benefits have 2 different rules

    • Jethro Martin

      Hi Beccy.

      Thanks for your comment.

      Your son may not necessarily be classified as a non-dependant just yet but would be very soon, and may even be able to claim Universal Credit himself after he finishes with the full-time education he is currently enrolled in.
      Universal Credit was designed to make things simpler for claimants by rolling multiple benefits into one single application and one single payment, and therefore includes the child element.

      The upper limits on the eligibility criteria for the child element under Universal Credit, which replaces child tax credits, differs slightly to the existing criteria under child tax credits. Under Universal Credit, you may receive child element until the end of August (after his 19th birthday) if he is in eligible education. On the other hand, child tax credits can be claimed till he turns 20 and in eligible education, provided he was enrolled before he turned 19. You will still continue to receive Child Benefit until he is eligible as they are administered separately.

      If you have another question please post here.

  7. Hi this is a reply for Jay- remember that little thing called privacy, well whilst on UC you no longer have it. Basically the UC credit team aka big bro get to see what ever changes are attached to your Nat Insurance account, ie earnings, and yes holiday pay and yes tax rebates, so if you receive anything like the aforementioned, your UC will be lowered or none at all given and magically you won’t need to actually ‘inform them’, the uc team- so no worries there. just best getting off it for good really as it will get worse.

    • Jethro Martin

      Hi Jacqui.

      Thanks for your comment.

      Most employers are required to use the government’s Real Time Information (RTI) system to report certain information, which is then used in your Universal Credit (UC) calculation. The advantage of this system is that you don’t have to worry about reporting your income, which is especially useful if it changes frequently. This automation can also help prevent fraudulent claims being made.

      If you have any questions please post here.

  8. Hi

    I was under the impression that transitional protection would apply to those who had capital in excess of £16000? Is this not the case?

    • Jethro Martin

      Hi Jennifer.

      Thank you for your question.

      Those with capital (savings) of more than £16,000 are usually not entitled to Universal Credit (UC), however you may get transitional protection if you are moved from tax credits to UC by HMRC or DWP, which may mean your entitlement continues if you have savings of more than £16,000. This transitional protection only applies to people who are ‘managed migrated’ (moved by HMRC or DWP to UC) and not to anyone who has a change of circumstances that causes their tax credits to end and need make a new benefits claim to UC. You can find more information on that here.

      If you have any other questions please post here.

  9. Miss Shipman

    I had a 4 week gap in employment last year and had to change from WTC to UC. I know that there were changes to Council Tax Reduction at the same time but my earnings are only slightly higher than they were in my previous job and yet I am pretty much paying full council tax. When I questioned why, I was told that the Housing element of my UC is included in my income thus on paper my weekly income is double what I actually earn. I am struggling to keep myself afloat financially and have even been singed off work with stress (first time ever) and it’s all down to my financial situation. I am actually better off not working, surely that’s not right?

    • Jethro Martin

      Hi Miss Shipman.

      Thank you for your question.

      Sorry to hear that you’ve been signed off work because of stress. It can’t be an easy time for you.

      In 2013 local authorities started managing the Council Tax Reduction scheme, so in each area of the country the scheme is different. It is very rare for your housing element of UC to be included in your income. Which local authority is responsible for your area?

      Being out of work may affect your Council Tax Support. As your earnings are lower you will receive more support, though the amount depends on your council tax band and the Council Tax Reduction scheme in your area.

      If you have any other questions please post here.

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