Universal Credit explained

This guide will help you understand the basics of Universal Credit and how to make the most of your money. 

To talk to someone about your own situation, including help claiming, try these free organisations:

• Citizens Advice Help to Claim for help with Universal Credit questions and claims, until you receive your first payment.

• Advicelocal for help and support with benefits,Opens in a new window including confidential advice on whether you should claim Universal Credit.

Universal Credit is a monthly benefit you can claim if you’re on a low income and need extra support with living and housing costs. It can help if you’re:

• looking for work

• unable to work due to an illness or disability, working or self-employed on a low income

• have caring responsibilities.  

Universal Credit is means tested. This means your household income and savings are counted in your claim. If you earn too much or have savings over £16,000 you won’t be able to claim. 

If you have a partner and live together, their income and savings will be taken into account and you’ll need to apply together. If they’re already receiving benefits, some of those might stop.

Our Benefits calculator will quickly give you an estimate of what you could get. It’s worth checking even if you don’t think you qualify, so you don’t miss out on vital income you’re eligible for.  

If you’re making a new claim for benefits, it’s likely you’ll need to apply for Universal Credit. This is because it’s replacing these six ‘legacy’ benefits:

• Housing Benefit

• Child Tax Credit

• Income Support 

• Working Tax Credit

• Income-based Jobseeker’s Allowance

• Income-related Employment and Support Allowance.

If you claim legacy benefits and your circumstances stay the same, you'll continue getting them until you’re sent a Migration Notice. This has a three-month deadline to claim Universal Credit by.  

You can see when you’re likely to get your letter on GOV.UKOpens in a new window or, in Northern Ireland, when you will be asked to move to Universal Credit on nidirectOpens in a new window

Always act before the deadline as your old benefits will stop and you could be left without income to live on. It’s best to apply for Universal Credit in good time to continue getting payments. 

If any of your circumstances change – like having a child, moving in or out with a partner or being diagnosed with a disability – you’ll need to tell the office that pays your benefits. This often means you’ll need to apply for Universal Credit instead.  

For full information and help, see our guide Moving to Universal Credit from other benefits.  

Use our free Benefits calculator to see if you qualify for Universal Credit and find out how much you could get. It will also show you if you can claim other help and grants, like Child Benefit and money towards your heating bills.  

To be eligible for Universal Credit, you usually need to: 

• be 18 or over  

• be under State Pension age

• live in the UK 

• have under £16,000 in savings and investments

• earn less than a certain amount each month. 

There are exceptions, like being able to claim from age 16 if you have a disability, are leaving care or are responsible for a child.   

Use our quick and easy Benefits calculator to find out how much Universal Credit you could get. 

This is because Universal Credit is made up of different allowances and elements depending on your personal circumstances.

Universal Credit is calculated based on the allowances you qualify for and how much is then taken off due to things like your other income. Here’s how it works.

You’ll get a standard Universal Credit allowance (based on your age and if you live with a partner) and usually one or more additional elements if you: 

• live with children you are responsible for
• pay for childcare   
• are an unpaid carer for at least 35 hours a week 
• rent your home
• have a long-term illness or disability and are unable to work.

For more information, see our guide How much is Universal Credit? and GOV.UK – Universal Credit: What you’ll getOpens in a new window

You can earn other money while claiming Universal Credit, your monthly payments might just go down the more you get. This includes income from: 

• work

• a pension

• certain benefits (benefits such as Child Benefit and Disability Living Allowance don’t count). 

There might also be other deductions, including if:

• you’re using your payment to repay any debts to the DWP, such as advance payments or tax credit overpayments

• you have savings and investments worth over £6,000

• you’ve been given a sanction (a penalty for not meeting the conditions of claiming, like missing appointments)  

If you are unsure about a deduction you can find more information in our guide Repaying benefit debts and overpayments. 

You might get a different amount of Universal Credit if your income or circumstances change in the month before. 

This is called your assessment period and it usually begins and ends on the same dates each month. For example, 2 January to 1 February. The start date is the date you first applied for Universal Credit.  

For example, you might get more if you:

• now qualify for another element, such as having a baby 

• earned less than normal, so your Universal Credit payment has a lower deduction.

You could get less (or nothing) if you:

• received a lump sum like a redundancy payment or inheritance that takes your savings over £16,000

• no longer qualify for one or more of your additional elements, such as children moving out of your home 

• earned more than normal or receive your wages in the same assessment period, like being paid early before Christmas

• have a change in circumstances and your partner moves into your home, so your payment is based on both of your income.

Our guide Help managing your money if you receive benefits has budgeting help and ways to make your money go further.  

You can work as many hours as you like and still claim Universal Credit. Your payment is designed to top up your earnings if you have a low income. 

Any amount you earn usually reduces your Universal Credit payment by 55p for every £1 you earn. So, as your earnings increase, your Universal Credit will gradually decrease until it reaches zero. 

If this happens, your Universal Credit claim will stay open for six months in case your income drops and you qualify again, so you don’t have to reapply. This can make it easier to accept temporary or seasonal work.

Some people can earn a certain amount before their Universal Credit starts to reduce. This is called a work allowance. You’ll qualify for a work allowance if you or your partner are:

• responsible for a child, or

• unable to work many hours due to an illness or disability.

This means your Universal Credit payment will only reduce by 55p for every £1 you earn over your allowance. See our guide How much is Universal Credit? for more information. 

After you apply, it can take up to five weeks to get your first Universal Credit payment. This includes:

• a four-week assessment period to work out how much you’ll get, and

• up to seven days for you to get the money. 

You can ask to be paid early (called an advance) if you’ll struggle while waiting for your first Universal Credit payment. 

This can be up to the full amount of your standard Universal Credit allowance and you might be paid the same day as you apply. It’s a loan, so your future payments will be lower until it’s fully repaid.  

Think carefully before asking for an advance. If you’ve already missed a payment or are worried you might, use our Debt advice locator to find free debt help near you, online or on the phone. 

For more help and information, see our guides:

• Universal Credit advance payments

• Help managing your money while waiting for your first Universal Credit payment  

• Help if you’re struggling with debt.

Universal Credit is usually paid:

• once a month in England and Wales

• once a month in Scotland, but you can ask for twice a month

• twice a month in Northern Ireland, but you can ask for once a month.

After you’ve received your first Universal Credit payment, it’s paid on the same dates. If this falls on a bank holiday, you’ll usually get the money the working day before.  

If you (or your partner if you’re a couple) are struggling for money, you can ask for an interest-free loan called a Budgeting Advance – usually after you’ve claimed Universal Credit for at least six months in a row.

See our guides for more help:

• Help managing your money if you receive benefits

• Budgeting Advances and Budgeting loans

• Help if you’re struggling with debt

If you qualify for help with your housing costs, how it’s paid to you depends on where you live:

• In England and Wales it’s included in your monthly payment. This means you’ll need to arrange to pay your rent or service charges to your landlord yourself. If you’ll find it hard to do this, you can ask your work coach for an alternative payment arrangement.  

• In Scotland and Northern Ireland, you can choose to have the money paid to you as part of your Universal Credit payment, or paid directly to your landlord.

For more information, see our guides:

• How to apply for Universal Credit in Scotland

• How to apply for Universal Credit in Northern Ireland 

If you have a mortgage and claim Universal Credit, you may be able to get a Support for Mortgage Interest loan, which helps pay the interest on your mortgage.  

As well as the extra income from your Universal Credit payment, you’ll usually become eligible for other help including:

• a discount on your Council Tax or Rates

• help paying your heating bills, including the Warm Home Discount

• cheaper bills by applying for discounted social tariffs, including: 

  • gas and electricity
  • water
  • broadband and mobile phone

• claiming back 85% of your childcare costs 

• free school meals

• help paying for school uniform and travel

• access to a savings account with a free bonus worth up to £1,200.

For more information, see our guide Help managing your money if you receive benefits. 

For help with your application, speak to a free Citizens Advice Help to Claim adviser

If you live with your partner as a couple, both of you must apply separately, even if only one of you qualifies for Universal Credit. 

This is because the amount you get is based on your household income and savings, so your partner needs to provide their details too. 

For more information, see our guide Joint Universal Credit claims for couples.

While you wait for your first Universal Credit payment, there are things you can do, including: 

• checking if you qualify for other payments or grants

• creating or amending a budget.

See our guide Help managing your money while waiting for your first Universal Credit payment.

After you’ve had your first Universal Credit payment, make sure you:

• change any payment dates for bills or rent to the day after you’re paid

• check if you now qualify for discounts or special deals

• report if anything in your life changes

• consider opening a Help to Save account for a free bonus worth up to £1,200 

• plan ahead for expensive months of the year, like birthdays and Christmas.   

For more details, see our guide Help managing your money if you receive benefits.  

If you need help applying, you can speak to a free Universal Credit adviser  for support completing the application form.