Universal Credit

Introduction

Universal Credit isa means-tested benefit for people who are on a low income and of working age – whether you are in work or out of work.

It has replaced the following existing benefits, which are now known as ‘legacy benefits’:

  • Income support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Child tax credit
  • Working tax credit
  • Housing benefit

Universal Credit is a means-tested benefit, so the amount you will get depends on your income and savings. Contributions-based benefits such as contributions-based JSA and ESA, remain unaffected by Universal Credit.

In this factsheet we tell you how Universal Credit is likely to affect you if you are blind or partially sighted.

Timetable

Universal Credit is being phased in gradually across the UK, and it will depend on where you live as to whether you can make a claim.

You can only claim Universal Credit if you are living in a full digital service area. In these areas you cannot make a new claim for any of the ‘legacy benefits’ and all Universal Credit claims will be managed online.

If you do not live in a full digital service area you will still be able to make a new claim for a ‘legacy benefit’ until your area moves to the full digital service.

The government expects the national roll-out to thefull digital service to becompletedby December 2018.

You can find out when the service will be available, based on your circumstances and the area you live in, by checking the Universal Credit online web tool .

If you already receive one of the benefits the Government is replacing – transferring on to Universal Credit

The government plans to start transferring people who are still on existing benefits or tax credits onto Universal Credit from July 2019.This part of the processis intended tobe completedby March 2022.

The DWP will contact you closer to that time with more details of what will happen and when. When you are due to transfer, you will have to make a claim for Universal Credit and this may involve an assessment.The Government has confirmed that the last claimants to be migrated will be those in the Employment and Support Allowance support group.

Note: If you are in an area where Universal Credit is operating and you are moving from out-of-work benefits (such as income-related ESA or income-based JSA) into work or you are reporting a change of circumstances, the DWP will tell you if you need to make a claim for Universal Credit instead.

Who is entitled to receive Universal Credit?

Universal Credit is for people who are on a low income and of working age – whether you are in work or out of work. You can receive it as a single person or as part of a couple, with or without children.

In order to qualify for Universal Credit, you must:

  1. be at least 18 years old, although some 16 or 17 year olds may be able to claim (such as lone parents, disabled people or people estranged from their parents)
  2. be under the qualifying age for Pension Credit. This will be 61 years and 10 months in October 2013, rising to 65 by 2018. Note for couples: if one of you reaches the qualifying age for Pension Credit before the other, the person of working age must continue to claim Universal Credit until you have both reached Pension Credit qualifying age
  3. reside in the UK
  4. not be in further or higher education
  5. meet the rulesfor income and capital. See “The rules for income and capital” section below for more details.
  6. accept a Claimant Commitment. In return for receiving Universal Credit, you must accept and fulfil a Claimant Commitment to the DWP that sets out your responsibilities and the consequences if you do not meet them. See the Claimant Commitment section below for more details.

How much is Universal Credit worth?

The amount of Universal Credit you receive depends on your circumstances. The DWP will pay you a standard allowance plus any additional elements that apply to you. The amounts quoted below are valid from April 2017 and are monthly amounts.

The standard allowance

  • Single claimant aged under 25: £251.77
  • Single claimant aged 25 or over: £317.82
  • Joint claimants, both aged under 25: £395.20
  • Joint claimants, either aged 25 or over: £498.89

The additional elements

1. Child element
  • An amount of £231.67 a month will be included in your award for each child or qualifying young person who normally lives with you.
  • If you had a child amount included in your Universal Credit award on or before 6 April 2017, you will receive a higher rate of £277.08 a month for your eldest child or qualifying young person, otherwise the standard rate of £231.67 will apply to them.
  • You can only receive this child amount for a third or subsequent child (or qualifying young person) if they were already included in your Universal Credit award on or before 6 April 2017. This is following the introduction of a two-child limit.

2. Disabled child addition

  • You will receive an extra £126.11 for eachof your childrenthatreceive any rate of DLA or qualifying young person that receives any rate of PIP. If your child or qualifying young person gets the highest rate of the care component of DLA, the enhanced rate of the daily living component of PIP, or is registered blind, you will receive £383.86instead.
3. Childcare element

If you pay for registered childcare when yougo towork then you can receive help towards this cost. There is no set number of hours you need to work. If you are in a couple then both of you must be in work unless the non-working partner:

  • has limited capability for work or work-related activity
  • or has regular and substantial caring responsibilities for a severely disabled person
  • or is temporarily absent from your household (for example, if they arein hospital or residential care).

The childcare element is worth 85% of your childcare costs up to a maximum of £646.35for one child and £1108.04 a month for two or more children.

4. Carer element

A carer elementof £156.45will be paid if you are caring for a severely disabled person for at least 35 hours a week. You do not have to claim Carer’s Allowance to get this element.

If you are making a joint claim, you can both receive a carer element if you both qualify for it, butyou cannot becaring for the same severely disabled person.

5. Limited capability for work element

If you satisfy the Work Capability Assessment(WCA) as having a

‘limited capability for work-related activity’, you will receive an additional amount of £328.32in your award. This amount may not be included in your award immediately as a ‘waiting period’ of three months usually applies. During this period, you should undergothe WCA.

However there are exceptions to this, for example, if you had previously been in receipt of ESA and you had to make a claim for Universal Credit following a change of circumstances. As you will already have a decision on the WCA, you should have the disability element included in your Universal Credit award from the start of the claim. If you do not receive the limited capability for work element in your award please seek advice to ensure that you are receiving what you are entitled to.

Before 3 April 2017, if you were found to have a ‘limited capability for work’ at the WCA, a lower rate of the workcapability elementcould be included in your award. This amount is £126.11. You can continue to receive this amount as it was included in your award before 3 April 2017, but it will not apply to new claims for Universal Credit.

Please note that you cannot normally receive this element as well as the carer element. If you would otherwise be eligible for both, only the highest paid amount will be included in your award. However, if you have a ‘limited capability for work-related activity’ and your partner is a carer, both amounts could be payable.

6. Housing element

You may receive an extra amount to help you with your housing costs. How much you receive depends on whether you are a tenant or a homeowner. If you pay a mortgage, you can only get support for your mortgage interest payment for a month in which you do not do any paid work, and after a waiting period of three months.

The rules for income and capital

Capital

You are allowed to have some capital (savings, for example) and claim Universal Credit, but the more you have the more the DWP will reduce your entitlement. If you have:

  • £6,000 or less of capital then the DWP ignores this and your Universal Credit will not be affected
  • between £6,000 and £16,000 worth of capital, you can make a claim for Universal Credit, but the DWP will reduce the amount of Universal Credit you get for every £250 (or part of £250) worth of capital you have – every £250 is treated as £1 a week in income
  • more than £16,000 in capital then you will not be able to claim Universal Credit.
Income

Any income you have will be taken into account for Universal Credit. This calculation is a household one, so if you have a partner it will include their income as well.

‘Earned income’, including wages from employer, statutory sick, maternity, paternity and adoption pay, will be subject to a 'work allowance'. If you earn more than your work allowance, this will reduce the amount of Universal Credit you get: for every pound you earn above your work allowance, the DWP will deduct 65 pence from your Universal Credit.

‘Unearned income’, including carer’s, bereavement and widowed mothers/parents allowances, is subtracted pound for pound from your award.

The DWP does not include some other incomes, such as any Disability Living Allowance (DLA) or Personal Independence Payment (PIP) you may receive.

What about income from self-employment?

If you are self-employed and on a low income, the DWP will assume that you have a certain level of earnings, equal to the minimum wage for the hours you are expected to work. This does not apply during the first twelve months of starting a new business.

How do I make a claim for Universal Credit?

Claims can only be made by filling in a form online. The DWP have confirmed that their online system will meet guidelines for accessibility and so should work with magnification and screen reading technology on computers and other devices.

If you cannot access the internet to make your claim online, or feel that you need more support to do this, there are other ways for you to make your claim:

  • a DWP adviser will be able to complete the online form for you as you talk through the application over the phone
  • you can visit a local DWP office and an adviser can complete the form for you
  • the DWP are also working with other organisations (called “Local Service Support”) who will be able to provide support to you. This service has been developed by the DWP in collaboration with Local Authorities to provide localised support for people who need extra help to make or maintain a claim for Universal Credit. In exceptional circumstances, the support service may be able to visit you at home to complete the form.

Once a claim has been made claimants can then manage their claim directly through an online account. If you make your claim online and it is successful, the DWP will also encourage you to notify them of any change in your circumstances through the same online account /route.

Apply for universal credit online by visiting .

If you are unable to complete an online application you can contact the Universal Credit Helpline on:

  • Telephone 0800 328 5644
  • Textphone 0800 328 1344
  • Welsh language 0800 012 1888

How will the DWP pay Universal Credit?

If your claim is successful, how you are paid Universal Credit will depend on where you live.

England and Wales

You will be paid monthly in arrears. It will consist of one payment that they will pay directly into your bank account. In exceptional cases the DWP may split payments. For example vulnerable tenants can have their housing element of Universal Credit paid direct to their landlord. For all other claimant’s, the monthly payment will include their housing costs.

Scotland

If you live in Scotland you can choose to get fortnightly payments, instead of one monthly payment. You can also request for housing payments to be made directly to your landlord.

Northern Ireland

If you live in Northern Ireland you automatically get fortnightly payments, but can ask to be moved to monthly payments. Your housing payments will be paid directly to the landlord or mortgage lender but you can request for it to be paid to you if you wish to pay your own rent.

If you are a new claimant, you should receive your first payment around five weeks after the date on which you made your claim. This is made up of an assessment period of one calendar month plus a further seven days to process the claim.

Backdating and payments in advance

The DWP will only allow backdating of Universal Credit payments up to a maximum of one month and only in limited circumstances such as ill health, disability or if the system has failed (meaning you have been left out of pocket).

With the exception of people leaving prison, the DWP will not allow anyone to make an advanced claim for Universal Credit.

How will the benefit cap work under Universal Credit?

There is a cap on the total amount of benefits (including Universal Credit) that a household can receive, so that it’s not higher than the average earnings (after tax) of a working household. The benefit cap is:

Within Greater London

  • £1,284.17 a month (if you are a single person with no children)
  • £1,916.67 a month in all other cases

Outside Greater London

  • £1,116.67 a month if you are a single person (with no children)
  • £1,666.67 a month in all other cases

You will be exempt from this cap if:

  • you are in a household where someone is in work, with monthly earnings equivalent to 16 hours a week at the National Minimum Wage
  • a member of your household receives DLA, PIP, Attendance Allowance, the support component of Employment and Support Allowance (ESA), Industrial Injuries Benefits (and equivalent war disablement pensions and payments under the Armed Forces Compensation Scheme) or a War Widows and War Widowers pension.

Is Universal Credit worth less than I get now?

Most households will either receive more under Universal Credit, or the same amount as they receive now, but it depends on your personal circumstances. This is because the amounts for Universal Credit are mostly at the same level as the means-tested benefits it replaces.

There are some significant differences to note, however. Firstly, the amount for most disabled children is less. At present, families with a disabled child may be entitled to receive support through the disability element of Child Tax Credit, worth £58 a week. Under Universal Credit, the DWP provides this support through “disability additions” within household benefit entitlements but it will be cut in half to £28 a week.

Secondly, the Government has abolished disability premiums for most disabled adults. This includes the Severe Disability Premium, currently worth £61.10 a week, which gives additional support to disabled adults who receive the middle or highest rate of the care component of DLA, any rate of PIP and live on their own (or just with children) and no one is paid Carer’s Allowance for assisting them.

Transitional protection – ensuring you don’t lose out

If the DWP moves you over to Universal Credit and your circumstances have not changed, you will be entitled to transitional protection. This means that you should not lose out at the time you change to Universal Credit because the DWP will ensure that you do not receive less than you did under your old benefit or credits. The amount of Universal Credit you receive will remain the same until:

  • your circumstances change
  • or the amount of Universal Credit you are entitled to catches up with the amount you were receiving under the old benefit or tax credits system.

The Claimant Commitment

You will have to accept a Claimant Commitmentto receive Universal Credit. This outlines what your responsibilities are. Your responsibilities vary according to which one of the four groups of claimants the DWP places you into.

If you are a single person living in a household, you simply make an individual claim for Universal Credit.