Universal Credit

What is Universal Credit?

Universal Credit is a single monthly payment designed to support households with living costs for those on a low income or out of work. It integrates several previously separate benefits, simplifying the welfare system and providing additional support for housing costs, children, childcare, disabilities, health conditions, or caring responsibilities.

Benefits Replaced by Universal Credit

Universal Credit replaces the following benefits and tax credits:

• Income-based Jobseeker’s Allowance

• Income-related Employment and Support Allowance

• Income Support

• Working Tax Credit

• Child Tax Credit

• Housing Benefit

Eligibility for Universal Credit

To qualify for Universal Credit, claimants must:

1. Be on a low income or out of work.

2. Be aged 18 or over (with some exceptions for those aged 16–17).

3. Be under State Pension age (currently 67).

4. Have savings of £16,000 or less between the claimant and their partner.

5. Reside in the UK.

Key Features of Universal Credit

• Work-Responsive Payments: Payments adjust as earnings change, encouraging work while providing ongoing support.

• Support While Working: Claimants can still receive Universal Credit and work coach support while starting a new job or increasing hours.

• Single Household Payment: Payments are made monthly into a bank account. Split payments are available in certain circumstances.

• Housing Costs Support: Payments for housing costs typically go directly to claimants but can be paid to landlords if necessary.

• Online Management: Most applications and claim management are conducted online.

Rollout and Current Status

Universal Credit was introduced in Ashton-Under-Lyne in April 2013. National expansion began in May 2016, and by December 2018, it was available in every Jobcentre across Great Britain. A pilot for the managed migration of existing claimants to Universal Credit started in July 2019, with all claimants expected to transition by 2024 under the Welfare Reform Act 2012.

Useful Links

• Universal Credit Guidance (Gov.uk) Provides comprehensive details about Universal Credit, including eligibility, how to apply, and how payments are calculated.

• Understanding the Managed Migration Process (Gov.uk) Explains the ongoing transition of claimants from legacy benefits to Universal Credit.

• Welfare Reform Act 2012 (Legislation.gov.uk) Offers the legal framework for Universal Credit and other welfare reforms, detailing its rollout and objectives.