Appendices
Appendices - Benefit Changes
Universal Credit

Introduction

Universal Credit (UC) is the new benefit that is now available across the whole of the UK and has replaced the following benefits for most people:
  • Child Tax Credit
  • Income-related Employment & Support Allowance (ESA)
  • Housing Benefit
  • Income Support
  • Income-based Job Seeker’s Allowance (JSA)
  • Working Tax Credit

You might be able to get Universal Credit if you’re not working or you’re on a low income.

Universal credit works differently from the old benefits system – and it’s important to know the differences. The biggest differences are:

  • you can get Universal Credit if you’re unemployed but also if you’re working
  • you’ll usually get a single payment each month, rather than weekly or fortnightly
  • instead of getting a separate housing benefit payment, your rent will usually be paid directly to you as part of your monthly Universal Credit payment

How Universal Credit works

You'll usually get one monthly payment to cover your living costs. If you claim Universal Credit as a couple, you and your partner will get one payment between the 2 of you. The payment is made up of a basic 'standard allowance' and extra payments that might apply to you depending on your circumstances.

You might be able to get extra payments if you:

  • look after one or more children
  • work and pay for childcare
  • need help with housing costs
  • are disabled or have a health condition
  • are a carer for a disabled person or you have a disabled child

Check if you can get Universal Credit

Universal Credit is a benefit you can claim if you’re on a low income or unemployed.

It might be worth claiming Universal Credit if:

  • you’re struggling to pay the bills
  • you’ve lost your job and have no income
  • your income has dropped but you’re still working
  • you have a disability or illness that stops you working
  • you have expensive childcare costs
  • you’re caring for someone

There’s no set level of income where you stop being eligible for Universal Credit - it depends on your situation.

Who can get Universal Credit

To get Universal Credit you must:

  • be 18 years old or over – or, in some cases, 16 or 17
  • be under State Pension age 
  • live in the UK (and there are extra rules if you are not a British Citizen)
  • have less than £16,000 in savings

If you live with a partner, their income and savings will be taken into account.

You can get Universal Credit if you’re living with other people but it might affect how much you get. For example, living with parents might mean you get less help with housing costs.

You can get Universal Credit if you’re self-employed - the application process is the same.

Whether you’ll be able to get Universal Credit depends on your situation - for example, if you’re single or living with partner, if you’re studying or training, or if you’re 16 or 17.

The Citizens Advice website has the most up-to-date information on Universal Credit – www.citizensadvice.org.uk/benefits/universal-credit/

If you need help about whether you can claim Universal Credit, you can get support and advice from your local Citizens Advice.

Starting your Universal Credit claim

If you’re eligible, you’ll usually have to apply for Universal Credit online on GOV.UK. You’ll then get an online account which you'll use to apply for Universal Credit and keep your claim up to date.

You’ll need an email address and a phone number to create an online account.

If you’re reapplying for Universal Credit, you might not have to go through the full application process again.

Check when to apply

Usually it’s best to apply for Universal Credit as soon as you can. That way you’ll get your first payment sooner.

If you’ve left your job
You should wait until the day after you get your final wages or any holiday pay from work.

If you get paid after you apply for Universal Credit, the money will count as income - this means you'll get less in your first Universal Credit payment.

You should apply as soon as you can if you’re only waiting for redundancy pay because it doesn’t count as income. Redundancy pay won’t affect how much you’ll get in your first Universal Credit payment unless it brings your total amount of savings to over £6,000.

If you’ve been waiting for your last payment from work and need money, it’s best to get support from your local Citizens Advice.

If you can’t apply online

You might be able to apply for Universal Credit over the phone or, in exceptional circumstances, arrange for someone to visit you at home.
You can only use these options in certain situations. You might be eligible if you:

  • don't have regular access to the internet
  • aren't confident using a computer or smartphone
  • have problems with your sight
  • have a long term physical disability or mental health condition which stops you from applying online
  • have a physical condition that stops you from using a computer or smartphone
  • can’t read or write

If you need help working out if you can claim by phone or have a home visit, you can get support from your local Citizens Advice.

To make a phone claim or arrange a home visit, you’ll then need to ring the Universal Credit helpline. Someone else can call for you. When you call, you’ll hear several options – choose ‘Universal Credit queries’.

If you need help with applying for Universal Credit, you should get support and advice from your local Citizens Advice.

Universal Credit helpline

Monday to Friday, 8am to 6pm
Telephone: 0800 328 5644
Welsh language: 0800 328 1744 
Textphone: 0800 328 1344
Calls to these numbers are free from mobiles and landlines.

Relay UK – if you cannot hear or speak on the phone): 18001 then 0800 328 5644. You can use Relay UK with an app or a textphone. There’s no extra charge to use it. The service is available Monday to Friday, 9am to 5pm. Find out how to use Relay UK on the Relay UK website.

Tell the person you speak to why you can’t apply online. They’ll ask you some questions to check you’re eligible before going through the next steps of the application with you.

Local Citizens Advice

You can find details of your local Citizens Advice in the Yellow Pages, or from these Citizens Advice websites:

Moving to Universal Credit from the previous benefits system

You might be better off claiming Universal Credit if either:

  • your situation changes
  • a benefit you're claiming ends

It depends what happened and which benefits you're still getting. Universal Credit is replacing 6 benefits called ‘legacy benefits’. These are:

  • Housing Benefit
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance (JSA)
  • Child Tax Credits (CTC)
  • Working Tax Credits (WTC)
  • Income Support

You can’t usually make a new claim for these benefits.

If you already get one of them, you’ll have to move onto Universal Credit by 2024. You can stay on them for now - unless your situation changes in certain ways. For example, you might need to claim Universal Credit if you’ve separated from a partner or moved to a different council area.

Budgeting advances on Universal Credit

You might be able to get a loan as part of your Universal Credit if you need to cover a specific expense – this is called a ‘budgeting advance’. If you get a budgeting advance, you’ll get reduced Universal Credit payments until you’ve paid off the amount you borrow. This will normally be over 12 months.

You can apply for a budgeting advance to cover things like:

  • a one-off item, e.g. replacing a broken fridge or getting a piece of furniture
  • unexpected expenses, e.g. a bill that’s higher than usual
  • expenses for starting a new job or keeping a job, e.g. uniforms, tools, etc.
  • repairs to your home, maintenance or security
  • travelling expenses
  • maternity expenses
  • funeral expenses
  • moving costs or rent deposit
  • clothes

If you’ve applied for Universal Credit but haven’t had your first payment yet, you need to get an advance payment instead of a budgeting advance. You should ask for an advance payment if you don’t think you’ll have enough money to live on between when you apply and when you get your first payment.

When you can get a budget advance

Unless you need the money for work-related costs, like train tickets to job interviews, you’ll need to have claimed any one of these benefits for 6 months or more:

  • Universal Credit
  • means-tested Jobseeker’s Allowance
  • means-tested Employment and Support Allowance
  • Income Support
  • Pension Credit

You’ll also need to have earned less than £2,600 in the 6 months before your application. This figure is £3,600 if you’re in a couple.

You can’t get a budgeting advance if you or your partner are still paying off a previous budgeting advance.

How much you can borrow for a budgeting advance

The smallest budgeting advance you can get is £100. The maximum depends on your circumstances. You can borrow up to:

  • £348 if you’re single without children
  • £464 if you’re in a couple without children
  • £812 if you have children

If you have more than £1,000 in capital, the Jobcentre will reduce your budgeting advance by the excess amount.

For example, if you have £1,250 in capital, the Jobcentre will reduce your budgeting advance by £250.

Applying for a budgeting advance

You’ll need to apply for your budgeting advance over the phone. To decide if you’re eligible, and how much you can get, an adviser will look at:

  • whether you can afford to pay the loan back – they’ll see if you have any debts and how much you owe to help work this out
  • how much you have in savings

You’ll normally get a decision on the same day.

Getting an advance payment of Universal Credit

You can ask for an advance payment of Universal Credit to help you get by while you’re waiting for your first payment. You can also ask for an advance payment if your circumstances have changed and you expect your Universal Credit payments to increase.

Without an advance payment you won’t get any money until at least 5 weeks after you apply for Universal Credit.

You should ask for an advance payment if you don’t think you’ll have enough money to live on between when you apply and when you get your first payment.

The advance payment is a loan – you’ll have to pay it back, but you won’t need to pay any interest.

You can ask for an advance payment by:

  • asking your work coach at the Jobcentre when you have your first Universal Credit interview
  • applying through your online account
  • calling the Universal Credit helpline

You can’t ask for an advance online or by calling the helpline unless you’ve had your first Universal Credit interview – find out how to book your Universal Credit interview.

The DWP will tell you if you can get an advance payment – you’ll usually find out on the same day you ask for it.

Once the DWP have agreed to an advance payment you should get the money in 3 working days. Tell the DWP if you need it sooner than this – they can pay you on the same day if you’d have no other money to live on.

The DWP will pay the advance into the same bank account you’re using for your Universal Credit claim.

You can ask for up to a month of your Universal Credit entitlement. You don’t have to ask for your full entitlement – you can ask for less. If you decide you need more, you can ask for a second payment but you’ll have to explain why you need it. The first and second payments added together can’t add up to more than your monthly entitlement.

Talk to your work coach about how much you can ask for. You’ll pay your advance back through monthly deductions from your Universal Credit. You should ask your work coach how much the deductions will be.

If you borrow a whole month’s payment make sure you keep some back to pay your rent. Rent is included in your Universal Credit payment – it isn’t usually paid straight to your landlord.

If you’ve already had your interview

You can phone the Universal Credit helpline to ask for an advance payment or apply through your online account. You can ask up to 1 month minus 3 working days after you apply for Universal Credit.

It’s best to ask as soon as possible. Once you claim Universal Credit it will take at least 5 weeks for you to get your first payment (sometimes more). So you’ll need to think about how much money you’ll need until your first payment.

Universal Credit helpline

Monday to Friday, 8am to 6pm
Telephone: 0800 328 5644
Welsh language: 0800 328 1744 
Textphone: 0800 328 1344
Calls to these numbers are free from mobiles and landlines.

Relay UK – if you cannot hear or speak on the phone): 18001 then 0800 328 5644. You can use Relay UK with an app or a textphone. There’s no extra charge to use it. The service is available Monday to Friday, 9am to 5pm.

Repaying the advance payment

The DWP will automatically take repayments from your Universal Credit until you’ve paid the advance back. You’ll need to agree with the DWP about how much the repayments will be and how long it will take to repay them.

If you applied for an advance on or after 12 April 2021, you can spend up to 24 months paying it back. If you applied before then, you can spend up to 12 months paying it back.

The DWP shouldn’t ask you to pay it back sooner if you can’t afford it – tell your work coach if the repayments will cause you hardship. You can ask to pay it back quicker if you want to.