Universal Credit Explained

 Universal Credit is a benefit that helps people with their living costs if they are on a low income, out of work, unable to work, or need additional financial support.

It replaces several older benefits and provides a single monthly payment to help with everyday expenses.

Universal Credit is a means-tested benefit administered by the Department for Work and Pensions (DWP).

It brings together several benefits that were previously claimed separately, including:

• Income-based Jobseeker's Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Income Support
• Housing Benefit (for most working-age people)
• Working Tax Credit
• Child Tax Credit

The amount you receive depends on your personal circumstances and financial situation.

You may be able to claim Universal Credit if you:

• Are aged 18 or over (some exceptions apply for 16 and 17 year olds).
• Are on a low income or out of work.
• Have savings and investments below certain limits.
• Live in the UK and meet residency requirements.

You can claim whether you are:

• Unemployed.
• Employed.
• Self-employed.
• Unable to work due to illness or disability.
• A parent or carer.

Universal Credit can include support towards:

• Everyday living costs.
• Housing costs, such as rent.
• Raising children.
• Childcare costs.
• Living with a disability or health condition.
• Caring responsibilities.

The amount you receive is made up of a standard allowance and any additional elements that apply to your circumstances.

The amount you receive depends on factors such as:

• Your income.
• Your savings.
• Whether you live alone or with a partner.
• Whether you have children.
• Housing costs.
• Health conditions or disabilities.
• Caring responsibilities.

If you are working, your Universal Credit payment may reduce as your earnings increase.

Universal Credit is usually paid:

• Monthly.
• Directly into your bank, building society or credit union account.

If you claim jointly with a partner, you normally receive a single payment between you.

Universal Credit is calculated over a monthly period known as an assessment period.

During each assessment period, the DWP looks at:

• Your earnings.
• Changes in your circumstances.
• Other income you may receive.

Your payment is then calculated based on the information for that period.

A new Universal Credit claim usually takes around five weeks before the first payment is received.

This includes:

• A one-month assessment period.
• Processing time for the payment.

If you need money sooner, you may be able to request a Universal Credit Advance.

An Advance:

• Provides money before your first payment arrives.
• Must be repaid.
  
• Is usually recovered through deductions from future Universal Credit payments.

It is important to consider whether you can afford the repayments before requesting an Advance.

You must tell Universal Credit about changes that may affect your claim, including:

• Starting or leaving work.
• Changes to your earnings.
• Moving home.
• Changes in rent.
• Changes to your household.
• Having a child.
• Changes to your health.
• Becoming a carer.

Failing to report changes could result in overpayments or incorrect payments.

Yes. Your payment may be reduced if:

• Your earnings increase.
• You receive certain other income.
• You have deductions for debts or advances.
• A sanction is applied.

If you do not understand a deduction, seek advice as soon as possible.

Changes in circumstances can increase or decrease your Universal Credit entitlement.

Some changes may:

• Increase your payment.
• Add additional support.
• Reduce your payment.
• End your entitlement altogether.

It is important to report changes promptly through your Universal Credit account.

If you believe a Universal Credit decision is incorrect, you have the right to challenge it.

The first step is usually to request a Mandatory Reconsideration, where the DWP reviews the decision.

If you still disagree after the review, you may be able to appeal to an independent tribunal.

Our advisors can help you:

• Check your entitlement to Universal Credit.
• Make a new claim.
• Understand your payments and deductions.
• Report changes in circumstances.
• Challenge decisions and sanctions.
• Access additional financial support.

Contact our team for free, confidential advice and support.