Who can claim & what you can get
Universal credit is a controversial new benefit designed to simplify the welfare system. It combines six benefits into one single payment, but the roll-out has been plagued by delays to payments, which have left tens of thousands of vulnerable people in rental arrears and some even dependent on food banks.
Universal credit is now available in all areas, but until July 2019, you'll only automatically be moved onto universal credit if you're a new claimant or if your circumstances change. After that, everyone on 'legacy benefits' will gradually start being moved across. You may be better off on universal credit - use our Universal Credit and Benefits Calculator to see how much you can get.
In this guide
What is universal credit and why is it so controversial?
Universal credit is a new monthly benefit for people who are out of work or on low incomes. It is replacing six means-tested benefits, sometimes called the 'legacy benefits':
It was designed to help people into work and out of the benefit trap. That's why it allows you to work and still receive support. The amount you get is adjusted in line with your (and your partner's, if you have one) earnings. To encourage working, some people receive a work allowance. In the Budget, the Government promised to increase this by £1,000/year from April 2019. See How much will I get? for more info.Why's universal credit controversial and what's being done about it
- Five week waits before first payment put claimants in debt. There's help you can get.
- Childcare paid in arrears forces claimants to pay £100s upfront. Government has promised to give more help to claimants starting work.
- Lower payments for many compared with legacy benefits. Use our Universal Credit and Benefits Calculator.
- Monthly payments cause budgeting headaches for some Government pledges to make frequent payments more available.
- Private tenants struggle to rent. Government promises to pay landlords direct.
Universal credit has been fully rolled out across the UK, so in most instances, new applicants or people with changed circumstances will go on it rather than the 'legacy benefits'.
In effect, this means there are two systems running at once. However, all of those on 'legacy benefits' will start to be moved over to universal credit from July 2019 until around 2023. See 'When will everyone be migrated onto universal credit' for more info.
Only the above six benefits have been/will be replacing universal credit. Many others will not be affected including:
- Child benefit
- State pension
- Disability living allowance
- Personal independence payment
- Statutory maternity pay
To work out if you're eligible, use our free Universal Credit and Benefits Calculator.
Who's eligible for universal credit?
If you make a new benefits claim, you'll need to apply for universal credit as the roll-out has now completed across the UK. If you're still receiving 'legacy benefits' you will continue to do so until you've a change of circumstance and need to make a new claim.
If you're on 'legacy benefits' and will be better off on universal credit, you can switch early - just make a claim.
Right now and until July 2019 at the earliest when managed migration begins, the following applies...
To get universal credit, you must be making a new claim or reporting a change in your circumstances.
How do I know if I'm eligible?
In order to be eligible for universal credit, you must:
- be aged 18 or over.
- be under pension credit age. That means men and women born after September 1953.
- not have savings over £16,000.
- not be in full-time education or training.
In certain circumstances other criteria applies – see below.
If I make a new claim or a change will I be moved onto it?
Yes, in most instances you'll need to apply for universal credit instead. If you've three or more children, you can apply for universal credit from 1 Feb 2019.
What happens from July 2019?
From July 2019, the Government will gradually move people on the old system over to universal credit in what's called 'managed migration'. This will take until 2023. Managed migration will begin in Harrogate.
In January, the Government promised not to rush the migration. It has pledged to learn from the 10,000 it migrates this summer before it moves everyone else over and to only do this in phases.
You will get a 'transitional top-up' if you are going to get less than you did under the old system (see point 3 below).
If you're claiming a legacy benefit and have a change in circumstances – eg, you've moved in with a partner – you may get moved onto universal credit.
If you don't have a change of circumstance, you will stay on the legacy benefit until you're moved over as part of the 'managed migration'. Do NOT try to beat the system – you have to report changes straight away or you risk losing your benefits altogether.
In some cases, you can apply when you're 16 or 17 – for example, if you have a child, you can't work or you're caring for a severely disabled person.
From 1 Feb 2019, you can make a new universal credit claim regardless of how many children you have. How many you'll get support for depends on when your children were born. See the child element section for more info.
Universal credit's a means-tested benefit. This means that the amount of income and savings you have will affect your eligibility and how much you might be entitled to, eg, you'll get less universal credit if you have savings over £6,000 or earn enough money to cover your basic living costs. If you've savings of £16,000 or over, you won't be eligible for universal credit.
If you live with your partner, you must make a joint claim as a couple. Your partner's income and savings will be taken into account, even if they aren't eligible for universal credit.
You can use childcare vouchers and universal credit together but you can’t get universal credit at the same time as claiming under the Tax Free Childcare scheme.
Universal credit can help with your childcare costs by paying back up to 85% of your childcare costs (to a maximum of £646 for one child, and £1,108 for two or more children). (You can make a claim through your account, but be aware you need to provide receipts and will only be reimbursed when your childcare takes place.)
You can use universal credit with childcare vouchers, but as you'll only be able to claim on the costs not covered by the vouchers, you may be better off not using the vouchers at all, as universal credit will likely contribute more to your costs.
For example, if you've monthly childcare costs of £1,000 and you pay £500 with vouchers, you can only claim back up to 85% of the remaining £500 through universal credit - £425.
In contrast, if you had childcare costs of £1,000 and only used universal credit to pay for it, you could claim back up to £850, so twice as much.
If you were claiming childcare vouchers before they were stopped, you can continue to claim them even if you're claiming universal credit.
Tax-Free Childcare is a Government-backed scheme, launched in 2017, which helps parents with the costs of childcare. However, you can switch between the Tax-Free Childcare scheme and universal credit if one is better for your circumstances.
The Low Income Tax Reform Group offers more guidance on how this could work for you.
When will everyone be migrated to universal credit?
From July 2019, the so-called 'managed migration' will start in Harrogate. Managed migration will eventually see everyone moved over onto universal credit – not just those who make new claims or have a change in circumstance.
This is supposed to be done by the end of 2023. Around 10,000 people will be moved in 2019. If you're one of them, you'll be notified beforehand. The roll out will continue gradually.
You won't lose out if you're moved over in the managed migration – if you have any drop in benefit, you'll get a 'transitional top-up payment'. The Department for Work and Pensions (DWP) told us these payments will continue until you've a change in circumstances – eg, if a partner moves out and you have to reapply as a single claimant.
You will ONLY get the 'transitional top-up payment' if you're part of the 'managed migration' – not if you move onto universal credit before July 2019 due to a change in circumstance.
Claimants will be notified three months before their legacy benefit runs out, so that they have time to prepare and make their claim. The DWP has also said that it will backdate anyone who's missed the deadline but applies within a month of the deadline date.
How much will I get?
This is what has caused a lot of controversy, with a report compiled by the Policy in Practice saying two in five households in receipt of benefits would lose an average of £52 a week under the new scheme.
While you may get less than before in benefits, the idea behind universal credit is to support you into work. That's why there are work allowances for some people.
How is my universal credit worked out?
How much you get depends on your circumstances, and these can be complex. Each case is best worked out on an individual basis. You can do this by using our Universal Credit and Benefits Calculator, which will give you an estimate of how much you can get. If you want to go more in-depth, these are the three steps used to work out how much you'll receive.
Step 1: Work out your maximum entitlement
For everyone there's a standard allowance – currently up to £498.89/month – although it's dependent on your age and relationship status.
You'll then get additional allowances added on:
A work allowance is available to working people with children and disabled people. It lets you earn a certain amount before your universal credit starts getting gradually reduced. Once you're earning above your work allowance, your universal credit is reduced by 63p for every £1 you earn.
The Government announced in the budget that it's pledged £1.7 billion per year to boost the work allowances by £1,000/year, effectively putting an extra £630/year in claimants' hands.
From February, families with three or more children may now be able to make new universal credit claims depending on their kids' ages. Previously, there was a blanket rule that only people with up to two children could claim.
How many children you'll get support for depends on when they were born:
- If your children were born on or after 6 April 2017, you can only claim for up to two of them. (You can still claim child benefit for all of them).
- If any of your children were born before 6 April 2017, from February you can claim for all of these. The two child limit was removed as being unfair in this situation.
Note that there are some exceptions to the rule (for example if you're renewing a claim that expired in the past six months), so make sure you read the full guidance so you know what you may be entitled to. You can also contact the universal credit helpline on its free phone number: 0800 328 5644.
Max monthly entitlement:
- £277.08 for one child if they were born before 6 April 2017 (£231.67 if they were born on or after this date).
- £231.67 for your second child (and subsequent children, if born before 6 April 2017).
- An extra £126.11 if you've a disabled child, or £392.08 if you've a severely disabled child.
You can get help towards up to 85% of your childcare costs. Usually, you (and your partner if you live together) need to be working or have a job offer to qualify. Max entitlement: £646 for one child, £1,108 for two or more.
To apply, you'll need to log in to your universal credit account and upload a letter from your registered childcare provider, and a bank statement proving payment, or receipts. Talk to your work coach if you want to discuss the evidence you'll need.
You'll have to upload your receipts every month and will be reimbursed with your universal credit payment. If you upload all your documents and verification has been completed (if necessary) before the last day of your assessment period, you'll be reimbursed on your next payment date.
You can make a claim up to three months in advance, but you'll only be reimbursed after the childcare has been provided. For example, if you pay for June, July and August in one go, you'll get one payment in June, one payment in July etc.
Money towards childcare is usually paid in arrears once the costs are known but this can cause hardship for people starting work or put them off taking a job altogether. The Government has now pledged to use the Flexible Support Fund and a less strict approach to make it easier for applicants in the first month of work and needing childcare.
You'll be eligible if it's determined that you have a 'limited capability for work and work-related activity'. Max entitlement: £336.20.
If you provide a significant amount of care to someone with a disability. Max entitlement: £160.20.
Provides help towards your housing costs (whether in social housing, privately renting or paying a mortgage). Max entitlement depends on your age and circumstances.
If you were claiming housing benefit, you will receive one payment to cover a two-week period while you're waiting for your first universal credit payment.
As this is where it starts to get complicated, the best way to see if you're entitled to additional payments is to complete a check via our Universal Credit and Benefits Calculator.
Step 2: Reduce your total allowance if you have income or savings
This will include:
This may be from a job or self-employed work. If you have children or are disabled, you can earn up to an amount called a 'work allowance' before your payment starts to be reduced.
This is £198 per month if you get help to pay your housing costs, or £409 per month if you don't. And for every £1 you earn (above your work allowance if you have one), your universal credit will be reduced by 63p.
The Chancellor has reacted to reports of hardship suffered by people on universal credit by announcing in the Autumn Budget that the work allowance will be raised for working families with children and disabled people by £1,000/year from April 2019. This will add another £630/year to their pocket.
This may be in a bank account. If you have less than £6,000 you'll have to declare it, but it won't affect your universal credit entitlement. Having between £6,001 and £16,000 will affect your universal credit amount, while anything more than £16,000 will stop you getting universal credit.
For every £1 of other income you receive, your universal credit payment will reduce by £1 (excludes some benefits, eg, child benefit, disability living allowance, personal independence payment and war pensions).
Step 3: Take into account anything else that could affect you
Your final universal credit entitlement is then worked out using anything else that could affect you. This could include any sanctions (when your benefits are stopped for a set period of time) you have or benefits over/underpayments.
It'll also take into account the benefits cap. This is the total amount of benefits (some are excluded) your household can receive in a year. In London, this is up to £23,000 for couples and families (£15,410 for single people without children), while outside of London, it's up to £20,000 (£13,400 for single people without children).
Of course, the easiest way to work out how much you'll get is to use our Universal Credit and Benefits Calculator, which will also inform you what other benefits you may be eligible for.
Here's the example of Sarah, assuming universal credit is available. (We've excluded housing costs for ease.)
Sarah is a single-parent with an eight-year-old daughter. She's 35 and works part-time in an office for 20 hours a week, earning £13,000/year. She pays £10/month towards a personal pension under auto-enrolment.
She doesn't currently receive any disability or sickness benefits and she doesn't pay for childcare for her daughter, as Sarah's mum looks after her daughter during the school holidays, and Sarah has scheduled her work hours so she can care for her daughter outside school hours.
Putting Sarah's details into our Universal Credit and Benefits Calculator, we discover that:
- Step 1 results: Sarah's maximum allowance would be £7,140, which includes money for the child element.
- Step 2 results: Sarah's total allowance is reduced as she earns £12,880 before tax and national insurance contributions (but after pension contributions) each year.
- Step 3 results: As there's nothing else that could affect Sarah's claim, her final universal credit entitlement is £2,592 per year (£216 per month).
If you've been moved onto universal credit as part of the 'managed migration', you'll get a top-up so that your amount remains the same.
Joe currently receives £800 per month from the benefits to be replaced by universal credit, but his universal credit entitlement is only £700 per month. He'll then receive a transitional protection amount of £100 per month to top up his amount, so he's not worse off.
However, it's important to note that the top-up amount can change depending on Joe's circumstances:
If Joe's universal credit entitlement increases to £750/month the following April, his transitional amount will simply be reduced to £50, and if/once his universal credit entitlement rises to £800 or above, he will lose his transitional entitlement.
The same applies if Joe starts earning more money. For every £1 he earns, his universal credit entitlement goes down by 63p. If he was to earn enough money that his universal credit entitlement fell to £0, he'd lose his top-up, though it wouldn't happen straight away.
You will not receive a 'transitional' top-up once you're moved over to universal credit:
Tom currently receives £1,000 per month, but will get £1,100 once universal credit comes into effect. Once that happens, he will just see his payments increase to £1,100.
Many people wrongly think they're not entitled to benefits or simply aren't aware they can claim. As the roll-out is now complete, only a small number of people will be able to still claim some legacy benefits - all other claimants will need to apply for universal credit instead.
If you are already claiming legacy benefits, you'll receive a top-up payment from the Government if your universal credit award is less than your legacy benefit award.
Of course, you could also be better off under the new system. You can use our Universal Credit and Benefits Calculator to see what you my be entitled to.
When will I be paid?
All payment dates are individual, as they're based on when someone's applied. For example:
Sarah applies for universal credit on 1 September. Her first assessment period will last until 30 September. She's paid on 7 October. She'll be paid on the 7th of every month after that.
If you're a couple living together, you'll get one payment into one account for your household. If you're concerned you won't get access to this money, you should contact the universal credit helpline on its free telephone number: 0800 328 5644. You can get an alternative payment arrangement to receive split payments.
You're usually paid once a month, however there are some regional differences to this.
In Scotland, you can choose to be paid twice a month – speak to your work coach if you're already claiming.
If you're making a new claim, you'll receive a notification after your first payment asking you how you want to be paid moving forward.
You'll automatically be paid twice a month in Northern Ireland. If you'd rather be paid monthly, you can request this from your work coach.
You'll have to wait at least five weeks for your first payment – here's what help you can get
The universal credit payment is paid after an assessment, so even when all is working fine, you won't get your first payment until around five weeks from making your claim – this includes a four-week assessment period and up to seven days for your payment to reach your bank account at the end.
However, some claimants are having to wait up to four extra weeks – so nine in total – to get their payments because of delays (see our MSE News story for more), leaving many in serious financial hardship and relying on food banks in some cases. It's therefore vital that you plan ahead before applying so you're prepared.
You can request an advance payment while you wait
If you don't have enough money to live on while you wait for your first payment, there is help you can get. You can request an advance payment through your online universal credit account, or through your work coach.
If you need help applying, call the universal credit helpline on its free number, 0800 328 5644.
You may receive all or part of your first payment. It's interest free but works like a loan, and you'll repay it through your regular universal credit payments, which will be lower until you pay it back. You can choose over how many months you want to pay back, but it must be fully repaid within 12 months.
You'll usually be told the same day if you'll get an advance, and you'll typically have the money within three working days.
The Chancellor has reacted to the outcry over hardship for people waiting for their first payments, by announcing £1 billion over five years for an extra one-off payment for claimants receiving employment and support allowance (ESA), jobseeker's allowance (JSA) and income support who are moved onto universal credit as part of the 'managed migration'. On average this will be £200, and cover a two-week period. It will come into effect in July 2020.
In a further response to criticism over long waits without benefits, the Government followed the Budget with an announcement that it will alert claimants three months before their legacy benefit runs out, so that they have time to prepare and make their universal credit claim. The Department for Work and Pensions has also said that it will backdate pay for anyone who's missed the deadline but applies within a month of the deadline date.
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How to claim universal credit
If you fit the criteria, you'll have to go online to claim universal credit. In most instances you must make your claim online, so ask friends and family for help if you need to.
You can contact the free universal credit helpline on 0800 328 5644 if you do run into any difficulties, or if you need to make a claim in an alternative format such as braille, large print or audio CD. For Welsh language applications, call 0800 012 1888.
You'll be asked a few questions to ensure you'll meet the basic criteria before being taken to the main claim page.
From April 2019, Citizens Advice will assist applicants.
As you have to make your claim in one online session (you can't save and come back to it), you should ensure you have all the information you'll need before starting.
At the very least, this will include your:
- contact details.
- bank account details.
- national insurance number.
Depending on what's relevant to you, you may also need details of your:
- current employment.
- monthly earnings (have a copy of your payslip to hand).
- housing costs.
- tenancy agreement.
- other income, savings and any other benefits you or your partner receive.
Although it goes without saying, make sure you only give correct information as you'll have to provide proof of anything you say in your application.
When you've completed all information, you'll be shown an estimate of the amount of universal credit you'll get each month.
You'll also have to complete a declaration that all the information you've provided is correct.
If your application's successful, you'll be told to arrange an interview at your local Jobcentre Plus. You won't get universal credit if you don't go to the interview.
You'll be told what information you need to take to the interview, but it'll definitely include physical evidence of details you provided in your claim (eg, your address, how much rent you pay, how much you earn at work).
Citizen's Advice has a comprehensive guide on how to prepare for your interview and examples of documents you may need to take with you.
At this interview you'll have to sign a 'claimant commitment'. This is an agreement that you will commit to certain conditions, such as looking for a set amount of work hours.
If you are or become self-employed, you may be eligible for universal credit. You will need to meet the general universal credit eligibility criteria.
You will also need to pass the DWP's test for being 'gainfully self-employed' (more below). If you're not considered to be 'gainfully self-employed', you can still claim, but you'll be expected to look for employment.
The amount you get is based on your income (and your partner's income, if you have one) and the 'minimum income floor', which is what the Government expects an employed person to earn given similar circumstances. How it's calculated is outlined further down.
What does gainfully self-employed mean?
It means being self-employed such that you'll be able to become financially independent. With this goal in mind, you will need to show that:
- your self-employment is your main job or source of income.
- you're getting regular work from self-employment.
- your work is organised and developed.
- you expect to make a profit.
You have to show you mean business and there will be a reality check. You'll need evidence such as:
- tax returns, accounts and your business plan (if you have one).
- your unique taxpayer reference if you're registered for self-assessment.
- customer and supplier lists, receipts and invoices.
- marketing materials.
- how many hours you're working.
- how much you're earning.
If you pass the test of being considered as gainfully self-employed, you'll be supported towards that goal of becoming financially independent. You won't have to look for other work.
You will have to report on your earnings to the DWP every month.
How much will I get?
This is worked out based on the 'minimum income floor'. This is the amount that the Government assumes you'll earn, based on how much an employed person in similar circumstances would earn. It's calculated on the national minimum wage for someone in your age group multiplied by the number of hours you're expected to look for and be available for work.
If you earn less than the minimum income floor, you may have to find additional work to top up your income, as universal credit won't make up the difference. Your payments will be adjusted as if you're earning the minimum income floor, even if you're actually not earning that much.
If you earn more than the minimum income floor, your universal credit payments will be based on your actual earnings.
A year of support before earning thresholds apply
Currently, if you're starting out as self-employed, you'll be given a year before you have to reach the minimum floor. Following the Autumn Budget, from next July you'll be given that same year's breathing space even if you've been self-employed for longer than a year.
From July 2019, it will apply to claimants who've been moved over to universal credit as part of the 'managed migration'. From September 2020, it'll apply to all claimants.
What do I have to do while I'm getting universal credit?
If you're getting income from self-employment, you need to report your earnings every month. You'll be sent a 'statement of earnings' form, which you should use to record any income received and expenses paid, including pension contributions, during your 'assessment period'. (Your statement of earnings form will tell you when this starts and ends.)
Whether you'll need to look for other work in order to keep getting universal credit depends on your circumstances.
When you apply for universal credit, you must fill in whether you've a disability, illness or health condition which means you can't work. This includes both physical and mental health issues. If you say 'yes', you will most likely need to attend a work capability assessment (WCA).
Mostly, this will happen around the 29th day of your claim, but there are certain instances where you may be referred to one on the first day – for example, if you're terminally ill or you're not legally allowed to work.
At the WCA, you'll be asked questions about your condition and how it affects your daily life, and how it might vary over time.
You'll need to fill in the UC50 form
Once your referral to a WCA has been made, you'll need to fill in the UC50 form, which will be sent to you in paper form with your appointment letter. If you can't fill it in yourself, you can ask a friend, relative, carer or support worker to help you.
If you don't have anyone to support you, or you still need help, you can speak to someone at the Centre for Health and Disability Assessments on 0800 288 8777.
You must send it to the Health Assessment Advisory Service – the address and deadline will be printed on the letter. Do NOT take it to the Jobcentre, if you do your claim might be delayed.
Send copies of all the medical information that you have, for example reports from your GP, scans, or your prescription list. You don't need to request or pay for new information. Don't send any originals.
After the Work Capability Assessment
Once you've had your assessment, a report will be sent to the DWP and used by a case worker (along with other evidence you've provided) to make a decision whether you're:
- fit to work.
- have limited capacity for work.
- have limited capacity for work and work-related activity.
If you're fit for work, you'll need to look for work that's suitable for your condition, and be prepared to work to keep getting universal credit.
If you've limited capacity for work, you won't have to look for work straight away, but you'll need to prepare for work with the aim of working in the future, for example by writing a CV. If this is you, you can get an extra £126.11 in some circumstances.
If you've limited capacity for work and work-related activity, you'll not be expected to look for or prepare for work. If this is you, you could get an extra £328.32 per month.
If your application's successful, you'll have an interview at your Jobcentre
After a successful online claim, you'll have to visit your local Jobcentre and have an interview with your work coach if you want to claim universal credit.
If you don't attend this interview, you won't be eligible for universal credit.
You can bring a friend or relative with you to the interview for moral support. It's best to let the Jobcentre know before your appointment if you can.
You'll have to sign a 'claimant commitment' at the interview to actually receive your universal credit entitlement.
This is an agreement that, if asked, you'll do a certain amount of work-related tasks each week, such as going to interviews at your local Jobcentre, writing your CV, or applying for jobs.
How much you'll have to commit to is determined by which one of four group types you're placed into:
- No work-related requirements group. You usually won't have to commit to anything.
- Work-focused interview group. You'll have to have regular 'work-focused' interviews with your work coach at the Jobcentre.
- Work preparation group. You'll have to do activities that prepare you for work including writing your CV, doing work experience, and having regular 'work-focused' interviews with your work coach at the Jobcentre.
- All work-related requirements group. You'll have to look and apply for jobs and go to job interviews for a certain amount of hours every week (usually 35 hours although less if, for example, you have children at school).
Citizens Advice has a handy list of various circumstances that could apply to you and the group type you should be placed in as a result.
Your specific commitment within your group type is personalised to you. Make sure you discuss with your work coach if you feel you've been placed in the wrong group, or you think you won't be able to meet your commitments.
It's better to sort out any issues you have at this stage, than risk being sanctioned if you miss any of your commitments.
If you're disabled or have a medical condition which means you can't work, you may have to attend a work capability assessment.
If you're unable to travel to an assessment centre, you can request a home visit when you make your appointment. Before your interview, you will need to provide evidence of why you need a home visit. Mention this when you make the appointment, so there will be enough time for a medical professional to review it.
Home visits are only granted when you have a disability or illness that means you'll have trouble travelling, and you live a certain distance from an assessment centre. Requesting a home visit doesn't necessarily mean you'll receive one. Contact your work coach or the universal credit helpline on 0800 328 5644 for more information.
What to do if you're struggling financially after universal credit payments have started
If you're already receiving universal credit and you're struggling, there's additional help. Depending on your circumstances, what's available is:
- a budgeting advance,
- a hardship payment,
- support from food banks and charities.
We've put more details below.
You can also ask for changes in the way payments are made.
Alternative Payment Arrangements: If you're having difficulties, or you've fallen into rental arrears, you can ask for an alternative payment arrangement. You could get one to:
- Have your rent paid directly to your landlord or landlady.
- Get paid more often than once a month. Payments may be made twice or four times a month for people unable to budget.
- Split payments if you're part of a couple.
It's important to note that asking for any of these changes does NOT guarantee that you'll get them. You need to prove that you've a need for the changes to be made - split payments, for example, are only offered in very special circumstances. It's worth asking if you're struggling and think this can help.
How the extra help works
You can get a budgeting advance if you need help with emergency household costs, for example if you need to replace a cooker or to stay in work. Like an advance payment, you'll pay it back through your universal credit payments, which will be lower until it's paid off.
The smallest amount you can borrow is £100. The maximum amount you can get depends on your personal circumstances:
- Up to £348 if you're single.
- Up to £464 if you're a couple.
- Up to £812 if you've children.
There's certain criteria that you need to meet in order to qualify for a budgeting advance. You must have been receiving one of the following benefits for six months or more – unless you need the money to get a job or stay in work:
- Universal credit.
- Employment and support allowance.
- Income support.
- Jobseeker's allowance.
- State pension credit.
You must have earned less than £2,600 in the past six months (or £3,600 if you're part of a couple), and have paid off any previous budgeting advances that you've had.
You must pay back the advance within 12 months. It is interest-free and can be funded by up to 40% of your benefits. It will reduce to a maximum of 30% in October 2019.
If you're in financial hardship because you've been sanctioned, you can request a hardship payment. This is usually a loan that you can only get if you're struggling to meet your basic needs or those of your children (such as accommodation, heating, food and hygiene costs).
You must be 18 or over to apply, and you need to prove that you've tried to get the money from somewhere else, and that you only spend your money on essentials.
To apply for this, contact the universal credit helpline on 0800 328 5644 to explain that you are in severe financial difficulty and to ask for a hardship payment.
If you're in urgent need then you may be able to get vouchers to pay for food, clothing or fuel from your local welfare assistance scheme. Charity Child Poverty Action Group lets you search if your council offers this scheme.
Your council or Citizens Advice may also be able to direct you to other help available in your area, including any food banks that operate. The Trussell Trust is one of the largest networks of food banks and you can search its website for one in your area.
You must pay back the hardship payment within 12 months. It is interest-free and can be funded by up to 40% of your benefits. It will reduce to a maximum of 30% in October 2019.
In most cases, universal credit is paid directly to claimants. This includes claimants who receive payments for rent.
Paying claimants not landlords has made private landlords unwilling to have claimants as tenants as they can't be sure of receiving rent. The Government has announced it will build an online system for the private landlords so they can request the rent is paid straight to them where necessary. When this goes live is not yet known.
Payment times have also caused difficulties. Tenants are not eligible for universal credit for the first week of their claim. On top of this, it takes around five weeks for your first universal credit payment to arrive. Some claimants have had to wait, on average, four additional weeks for their first payments but generally the delays have now shortened.
The wait has pushed some tenants into rental arrears. According to research by ARCH and the NFA, 74% of universal credit households are in arrears compared to 26% of non-universal credit households.
Its research identified factors for this including: delays in assessing claims, the wait for arranged payment advances and other advances, admin issues etc.
Falling into rent arrears can lead to your landlord taking you to court and potentially to eviction, so it's not an issue to be taken lightly.
You can ask for:
- your universal credit more than once a month and
- for your landlord or landlady to be paid directly.
If you're homeless or in temporary accommodation for another reason, the Department for Work and Pensions says you should claim housing benefit through your council.
If you've a mortgage
If you're at risk of falling behind with your mortgage payments due to universal credit, speak to your lender immediately. It may be that you're able to get a mortgage holiday while you're waiting for your payments, or your lender may be able to give you other help at its discretion.
According to research from the Trussell Trust, food bank usage increases by an average 52% over the first year after universal credit has been introduced to an area, compared to 13% in non universal credit areas.
If you're struggling, you might be able to get a budgeting advance to pay for food – speak to your work coach or call the universal credit helpline.
The Government has announced plans to pilot schemes making more frequent payments to new claimants. If these work, it plans to roll them out further. We can't yet say if and when that will be, but we'll update this guide with news.
It also plans to change payments so they go to the main carer, often a woman, in households. This should start this year, but again, there is no known launch date.
Charity help for debt advice and mental health
There's a number of charities that can help you if you're struggling with debt because of universal credit, or if it has affected your mental health.
- StepChange is a debt charity that can help by offering expert advice.
- The National Debtline helps with debt advice.
- Mind helps with mental health and money worries. You can speak to them directly on 0300 123 3393 (please note that you'll be charged at a local rate if you're calling from a landline) or firstname.lastname@example.org, or you can see their list of recommended resources where you can get help.
- The Samaritans can offer advice and support for when you're feeling trapped and finding it difficult to see a way forward – you can reach it on 116 123 or email@example.com.
- Mental Health & Money Advice also offers an extensive list of other organisations you can contact. It's divided into mental health resources and money issues resources.
The Work and Pensions Committee has begun an inquiry into the impact of universal credit on claimants such as the five or six-week wait for first payment, rent arrears and how it affects household finances. A spokesperson for the Committee says it will regularly write to the department to ask for updates to assess the roll out and its effect.
What to do if you think you're not getting the right amount of universal credit
Whether you think your initial entitlement is wrong, or if your entitlement is changed after you start claiming, the first thing you should do is contact the helpline on 0800 328 5644. If a mistake has been made in your calculation, it should be rectified while you're on the phone.
If this isn't the case, then you can appeal the decision by asking for a mandatory reconsideration. You must do this within one month of the date of your initial entitlement decision. Go to the Government's site for more info on making a mandatory reconsideration. If you do decide to appeal, make sure you gather supporting evidence before you do so.
Help if your universal credit gets cut unfairly
If you fail to keep to your agreed claimant commitments then you could get sanctioned, which is where your benefits get cut. Sanctions can last from a week to up to three years (the average is 31 days), so this can be incredibly damaging to your finances and welfare.
If your benefits have been unfairly cut, here's what you can do:
- You can appeal the sanction decision with the Department for Work and Pensions using a process called 'mandatory reconsideration'.
- To prepare yourself for this appeal, Citizens Advice has a list of arguments you can use to challenge a sanction.
- It also has guidance on checking you've actually received the correct sanction for your circumstances.
- If you receive council tax reduction (also called 'council tax support') and get a sanction, contact your council immediately. They'll tell you what to do to continue getting support.
Avoid getting repeat cuts
Sanctions can be more severe if you've been previously sanctioned. Here's some tips on helping you avoid being sanctioned again.
If you've been sanctioned because you struggled to stick to your claimant commitment, then it could be time to review it.
Contact the universal credit helpline on 0800 328 9344 to explain why you'd like to change it, including any changes in your personal circumstances that you feel could have had an impact.
You could also ask for an appointment with your work coach to discuss it.
As soon as you know you're not going to be able to attend a Jobcentre appointment, contact your local Jobcentre to let them know in advance.
Make sure you keep a note of the time, date and who you spoke to during your conversation and explain your reasons.
If it's the cost of getting to the Jobcentre that's prohibitive, then you may be able to get some help from the Jobcentre with travel costs if you ask.
While keeping a diary can be a bit of a slog, it could be worth it as evidence if you run into any issues.
Keep a note of whenever you do something that's in your claimant commitment – such as applying for a job – as well as the date you did it and how long you spent on it.
If you have a valid reason for not doing anything in your commitment, try to get evidence of it, eg, if you're ill then try to get a doctor's note.
Then, in the future, you can always present your diary as evidence if you need to.
If anything in your personal circumstances changes, eg, you get a new job or you move in with a partner, then ensure you let the benefit office know straight away.
You can do this by calling the free universal credit helpline on 0800 328 5644 (Monday to Friday, 8am to 6pm). As it can cost up to 9p/minute from a landline or 40p/minute from a mobile phone, you can call and request a callback to save some money.
Where can I find more information?
If you have questions on universal credit that aren't answered here, then many other organisations and charities offer guidance and advice. Here's just a few resources that you may find useful, please let us know in our forum discussion thread if you find any others that help you.
- Turn2Us: Help with benefits, searching for grants and to get access to support services.
- Entitledto: As well as providing free benefits calculators, it has tonnes of guidance on benefits.
- Citizen's Advice: Guidance for all aspects of universal credit.
- Gingerbread: Primarily aimed at single parent families.
- Christians Against Poverty (CAP): Help with debt, finding work and free courses to get control of your finances.
- Turn2Us: Help with benefits, searching for grants and to get access to support services.