How will moving to Universal Credit affect me?

If certain circumstances change in your life, you might be asked to make a new claim for Universal Credit. For example, you might have a change in your:

• employment status, such as starting a new job, or increasing or decreasing your hours
• family circumstances, such as a new baby, child starting school, or partner moving in or out
• housing, such as moving to a new local authority area.

Your circumstances might also change if you start or stop:

• being a carer
• a claim based on disability.

When you claim Universal Credit, if you are getting tax credits, the payments will stop immediately.

However, if you get Housing Benefit, Income Support, or income-related Employment and Support Allowance they will be paid for an extra two weeks after you make your claim. This is to help you manage while waiting for your first Universal Credit payment.

It’s important to understand that you could get either more or less money than you do now when you move from legacy benefits to Universal Credit.

For this reason, it’s best to check in advance how your income will be affected. In some circumstances, delaying your claim for Universal Credit could make sense.

Find out more about changes that might mean you have to start a Universal Credit claim at entitledtoOpens in a new window

Check if you would be better or worse off switching to Universal Credit using our calculator.

If you’re claiming the benefits being replaced by Universal Credit, the Department for Work and Pensions (DWP) will ask you at some point to make a claim for Universal Credit. Unless there’s a change in your circumstances, you don’t need to do anything until the DWP contact you. The DWP expect all households claiming legacy benefits and tax credits to have moved across to Universal Credit by September 2024.

If there’s a significant change in your life, you’ll be asked to move from Child Tax Credit to Universal Credit.

This might happen if you:

• start work
• have a child
• move in with your partner or they move out.

You could get more or less money on Universal Credit than you’re currently getting in Child Tax Credit and other benefits. The way savings are counted are different than the rules for tax credits. If you have savings of more than £16,000 and you need to move to Universal Credit because of a change of circumstances you won't qualify. And if you have savings of over £6,000 the amount you get could be affected. It's important to get specialist benefits advice before you claim Universal Credit if you think this will affect you.

If you have one or two children, you can claim for children until they reach 19 – or 20 in some cases – if they’re in full-time approved education or training, but not at university. If your children were born before 6 April 2017, you’ll be able to claim for them all. If one or more of your children were born on or after 6 April 2017, you’ll only be able to claim for the first two – unless you had a multiple birth or have adopted. The first child premium will no longer be paid under Universal Credit.

Your monthly Universal Credit payment will include the elements and additions listed below, which will replace the help you currently get from tax credits:

• Child element – this helps with the costs of bringing up a child.
• Disabled child addition – this helps with the extra costs of bringing up a disabled child. It will be paid at either a lower or higher rate, depending on the child’s needs.
• Childcare costs element – lets you claim back up to 85% of your monthly registered childcare costs up to a capped limit of £646 for one child and £1,108 for two or more children (for 2023-24) while you’re working.

If you’re on Universal Credit, there are different rules about what you have to do in return for receiving your payment.

You won't be moved to Universal Credit automatically. You'll receive a Migration Notice letter asking you to claim Universal Credit within three months from the date on the letter. If you move over to Universal Credit from tax credits because you’ve received a Migration Notice, any savings over £16,000 won't affect your eligibility for Universal Credit for 12 assessment periods (about 12 months).

After then, the normal Universal Credit savings rules will apply.

If your circumstances change, you might be asked to switch to Universal Credit from Working Tax Credit. For example, if you:

• start working less than 16 hours a week

• were on Working Tax Credit and become sick

• have a child 

• start renting a property, especially if it’s in a new local authority area.

The amount of Universal Credit you are paid could be more or less than the benefits you get now. The way savings are counted are different than the rules for tax credits. If you have savings of more than £16,000 you won't qualify for Universal Credit. And if you have savings of over £6,000 the amount you get could be affected.

It's important to get specialist benefits advice before you claim Universal Credit if you think this will affect you.

Your Universal Credit payment will also adjust month by month if the amount you earn goes up or down. This should make it easier for you to accept short-term work or take on more hours. If you earn less during one month, your Universal Credit should go up to make up for the shortfall in earnings. There are also no limits to the number of hours you have to work, as there are with Working Tax Credit. If your working hours aren’t the same from month to month, it can mean you might need to budget more carefully now.

For the DWP to work out how much Universal Credit you should get, they need to know how much you’ve earned in the past month. Either you or your employer need to tell the DWP how much you’ve earned. This is so you don’t get too much or too little Universal Credit.

From April 2023, if you’re getting tax credits only, DWP may ask you to claim Universal Credit as part of its 'Move to UC’ programme to move everyone on legacy benefits to Universal Credit.

If you're asked to move, you shouldn't initially be worse off on Universal Credit. If the amount you’re entitled to is less on Universal Credit than your old benefits, your payment will be topped up under Transitional Protection to make sure you don't lose out.  

You will need to claim Universal Credit even if you have recently renewed your tax credits claim.

You won't be moved to Universal Credit automatically.  You'll receive a Migration Notice letter asking you to claim Universal Credit within three months from the date on the letter. You will need to make the claim online (but there is lots of support available if you will struggle to do this). 

The savings rules are different for Universal Credit and usually you don’t qualify to get it if you have £16,000 or more in savings or capital. 

However, if you move over to Universal Credit from tax credits because you’ve received a Migration Notice, your savings won't affect your eligibility for Universal Credit for 12 assessment periods (about 12 months).

After then, if you still have £16,000 or more in savings your Universal Credit payments will stop 

If you still have between £6,000 and £16,000, your Universal Credit payments will be reduced by £4.35 for every £250 of savings you have.

If you have any questions about moving to Universal Credit, call the helpline number given in your Migration Notice.

If you live in England, Wales or Scotland you can contact a Citizens Advice Help to Claim Service on:

• England, 0800 144 8 444
• Scotland, 0800 023 2581
• Wales, 08000 241 220

If you’ve been running your business for 12 months or longer when you claim Universal Credit, the DWP will work out your payment based on the minimum income floor.

Find out more in our guide Universal Credit if you’re self-employed.

Download a leaflet on 'Universal Credit and work'Opens in a new window at GOV.UK

Download a leaflet on ‘Universal Credit and self-employment’Opens in a new window at GOV.UK

Download a leaflet on ‘Universal Credit and tax credits’Opens in a new window at GOV.UK

Your employer might be able to report your earnings automatically through the government’s Real Time Information system (RTI). You’ll need to find out if your employer has access to the RTI system.

Ask for your employer’s PAYE scheme number and tell your work coach. You can do this through your online account, or call the Universal Credit helpline:

Telephone: 0800 328 5644

Textphone: 0800 328 1344

Find more contact details at GOV.UK

If you have more than one employer, you’ll need to get a PAYE scheme number for each job.

When the PAYE scheme number is recorded on your claim, your earnings information should be sent automatically each month to DWP and you won’t have to report it.

You’ll need to provide:

• your PAYE reference
• your gross taxable pay
• your employer’s name
• the date you were paid
• how much tax you paid
• how much National Insurance you paid
• details of any contributions made to a pension scheme – and whether they are paid from your gross or net salary or into a personal pension
• you’ll also have to report any earnings your employer won’t know about.

If you move from Income Support to Universal Credit, you won’t be limited to working a maximum of 16 hours a week. So you might be able to increase your hours of work and still get Universal Credit. If you have children and you move on to Universal Credit, you’ll be expected to discuss future plans for work when your youngest child turns one. You need to prepare for work when they turn three, with support from Jobcentre Plus. Your Income Support will be paid for a further two weeks after you make your claim for Universal Credit before it will stop. You won't have to pay this money back.

You might be asked to move from Income Support to Universal Credit if you:

• stop full-time education
• start renting a new property, especially if it’s in a new local authority area
• stop being a carer
• are a single parent and your youngest child turns five
• start working enough hours to meet Working Tax Credit conditions.

You could get more or less in Universal Credit than you get now. Your Universal Credit payment will include a housing costs element which will replace the help you currently get from Housing Benefit. Your Housing Benefit will be paid for a further two weeks after you make your claim for Universal Credit before it will stop. This should mean you don't miss a rent payment while you're waiting for your first Universal Credit payment.

If you have your rent paid directly to your landlord at the moment, this will change under Universal Credit. The money for your rent will be paid to you as part of your monthly Universal Credit payment. You’ll be responsible for using this money to pay your landlord. However, if you have significant support needs – for example, with budgeting – either you or your landlord could ask for an Alternative Payment Arrangement until you get back on your feet.

This means your rent could be:

• paid directly to your landlord
• paid to you weekly or fortnightly.

If you’re claiming Universal Credit in Northern Ireland, your housing costs will automatically be paid to your landlord. But you can choose to pay your landlord yourself.

You’ll have to pay your landlord directly, but you can choose to have your housing costs paid directly to your landlord.

If you’re aged between 18 and 21, in return for getting your benefit you’ll be expected to take part in the Youth offer. This will include intensive support to help you get the skills you need to move into work.

After six months, you’ll be expected to:

• apply for an apprenticeship or traineeship
• gain work-based skills, or
• go on mandatory work placement.

If you’re aged between 18 and 21 and are out of work, you’ll be automatically entitled to housing support if you make a claim for Universal Credit.

If you’re in a couple and either you or your partner reach Pension Credit age, you’ll now have to claim Universal Credit if you have a change in circumstances. This might mean you will get less money.

Find out how much Universal Credit you might get by using the Benefit and Budgeting CalculatorOpens in a new window at Policy in Practice

You’ll have to wait up to five weeks for your first Universal Credit payment from the date of your claim.

When you’ve made your claim for Universal Credit and you're getting one or more of these benefits:

• Housing Benefit
• Income Support
• income-related Employment and Support Allowance 
• income-based Jobseeker's Allowance.

They will continue to be paid for an extra two weeks before they stop. You won't have to pay this money back. Tax credits will stop straightaway after you make your claim. It’s important to think about how you’ll cope while waiting for your first Universal Credit payment, especially if your budgeting is based on the dates your old benefit payments come into your bank account. If you think you’ll struggle to make ends meet, you can apply for an advance payment. But be aware that you’ll need to repay it within 12 months.