Universal Credit (UC) – A Guide

Focus on Disability - For Disabled People, the Elderly and their Carers in the UK

Universal Credit is a payment to help with your living costs. It’s paid monthly – or twice a month for some people in Scotland.

You may be able to get it if you’re on a low income or out of work.

See also: Universal Credit – Benefit Rates 2019 to 2020

The Government says that Universal Credit, replacing certain other benefits, helps claimants (including disabled people) and their families to become more independent and will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment.


If you already get other benefits Universal Credit is replacing the following benefits:

1. Income Support
2. Child Tax Credits
3. Housing Benefit
4. Income-based Jobseeker’s Allowance (JSA)
5. Income-based Employment and Support Allowance (ESA)
6 .Budgeting Loans and Crisis Loans

Note: Universal Credit won’t replace Child Benefit.

If you currently get any of these benefits, you do not need to do anything unless:

  • you have a change of circumstances you need to report
  • the Department for Work and Pensions (DWP) contacts you about moving to Universal Credit

Severe disability premium

You cannot claim Universal Credit if you either:

  • get the severe disability premium, or are entitled to it
  • got or were entitled to the severe disability premium in the last month, and you’re still eligible for it

If you have a change of circumstances that affects the severe disability premium or your other benefits, report it and you’ll be told what to do next.

Universal Credit: What you need to know

Universal Credit: What you need to know
Ideal publication for advisers and those currently claiming benefits themselves

What will claimants be expected to do in return for Universal Credit

At the heart of Universal Credit is a partnership between the state and the claimant. In return for receiving financial support, out of work claimants, depending on their circumstances, must look for work, or take steps towards it. This may include preparing a CV, attending training courses, applying for suggested vacancies or registering with a recruitment agency. In most cases they must also be available and willing to immediately take up work and attend periodic interviews to discuss plans and opportunities for returning to work (immediately or in the future). To demonstrate that they take this responsibility seriously, out of work claimants must accept a claimant commitment. If a claimant refuses to accept their claimant commitment, they will not be entitled to Universal Credit. If the claimant doesn’t do what he or she has committed to do, they will experience tougher penalties than at present, such as their benefit being reduced or withdrawn for up to three years. The details of these penalties are currently being defined. For some out of work claimants, this will not be the case. For example, there are groups who will continue to get support and not be expected to work or prepare for work over a sustained period. Examples of such groups are:

  • claimants with limited capability for work related activity
  • claimants who are in receipt of the Carer’s element
  • claimants who are not in receipt of the Carer’s element but who do have caring responsibilities of at least 35 hours in a week for a severely disabled person/s
  • a lone parent with a child under the age of one year.

This list is not exhaustive. Universal Credit can be payable to people that are in low paid work and will top up their earnings. The amount of their Universal Credit will reduce at a consistent and managed rate as they increase their working hours and earnings. This will continue to be the case until they are self-sufficient. Claimants who are in work must also accept a claimant commitment according to their circumstances clearly setting out what is expected of them in return for Universal Credit. They will need to log on to the online gateway to submit their Universal Credit claim. They will also need to tell us about changes to their circumstances, which affect their entitlement to benefit, or the conditions they must meet. Their Universal Credit will be calculated and delivered electronically and automatically adjusted each month in line with earnings. Claimants will be able to clearly seeing the benefits of increasing their hours and therefore their earnings.

Claiming Universal Credit

You will usually have to be aged 18 or over to make a claim for universal credit. Young people under 18, students and people from abroad or not usually resident in the UK will not usually be able to claim, but there will be some exceptions. You won’t be able to claim universal credit if both you and your partner are over pension credit age, you’ll have to claim pension credit instead. You will be able to claim as an individual or jointly as a couple. Most claims for universal credit will be made online, and it is expected that people will tell the DWP about changes in circumstances online too. You will not be entitled to universal credit if your income from other sources or savings are too high for you to qualify.

For claimants who cannot get online or use a computer

Universal Credit has been designed so that claimants can personally manage their claim directly through an online account. However, claimants who cannot access the internet or use a computer will be helped to complete their online claim for Universal Credit. This may be in a high street outlet or via a telephone service. For claimants who require a little bit more support, face to face help and a one to one telephone service will be available and an adviser will complete an online form on the claimant’s behalf, checking for accuracy as they proceed.

To further assist claimants, ‘Digital Champions’ are already in every Jobcentre, and will help staff support and encourage claimants to take their first steps online and see the benefits of being able to use the internet.

How is a Universal Credit payment is calculated and what does it include

Universal Credit is made up of a standard allowance and potentially five elements, as any award is based on a claimant’s personal circumstances. The five elements are:

  • Child Element / Disabled Child Additions
  • Childcare Element
  • Carer Element
  • Limited Capability for Work Element
  • Housing Element

The monthly Universal Credit payment covers everyone in a family who qualifies for support. This may be

  • a person claiming for themselves alone
  • a person claiming for themselves and their child or children
  • a couple making a joint claim for themselves
  • a couple making a joint claim for themselves and their child or children

Children over 18 living with their parents or siblings can claim Universal Credit in their own right.

Monthly Payments

Universal Credit is paid monthly to help people budget effectively and reflect the world of work, where 75% of all employees receive wages monthly. This will help smooth the transition into monthly paid work, encourage claimants to take personal responsibility for their finances and to budget on a monthly basis which could save households money. For example, monthly direct debits for household bills are often cheaper than more frequent billing options. The Government is exploring access to financial products for those on low incomes and is working with providers of financial services, the British Bankers and Building Society Associations, credit unions and the Post Office to help people budget effectively with a monthly payment.

Supporting those moving into work or increasing their hours

Universal Credit will make it easier and less worrying for claimants to try out a job or work more hours, because their benefits will not automatically stop if they do so. The new system will show people that they will be better off working. Universal Credit will ensure that work pays. Financial support will be reduced at a steady rate, taking actual earnings into account at the time they are received. If a claimant is working part time, they may continue to receive some payment, but if their hours then increase, their Universal Credit payment will reduce, but they will keep more of their earnings and will always be financially better off in work. The government want to make sure people are encouraged to take work whether it is full or part time, or to increase their hours and see the benefit of doing so. For claimants on Pay as Your Earn (PAYE), Her Majesty’s Revenue and Customs online employer system will automatically pass information about their earnings to their Universal Credit account. This means that the claimant won’t need to tell about every change in their earnings. They will see the positive impact of increased hours directly on their online account as they will keep more of their earnings.

Child Support

This will be provided in the form of a child element. It will be included included in a claimant’s Universal Credit award where they are responsible for a child or qualifying young person that normally lives with them. The child element is comprised of two rates; one rate for the first/only child and then a reduced rate for second / subsequent children. Universal Credit will provide more support for childcare costs. Under current tax credit rules, support towards childcare costs is only available to parents who work more than 16 hours per week. Under Universal Credit, this requirement will be removed and support will be available to parents regardless of the number of hours they work. This will provide an important financial incentive to those taking their first steps into paid employment. It will mean that around 80,000 extra families will be eligible to receive support through childcare. Universal Credit is expected to be particularly beneficial to lone parents, including those who wish to work a small number of hours.

Groups needing more support

The government is working with stakeholder organisations and claimants to ensure that Universal Credit is designed and delivered to meet the diverse needs of all potential claimants. Some of the options that they are exploring for the 40 groups identified as having higher support needs are as follows:

  • making the online service accessible
  • tailoring our requirements to individual needs
  • providing budgeting support
  • applying policy appropriately in relation to groups with higher support needs
  • providing face to face support
  • enabling third parties to support claimants.

Effect on Pension Credit

Under the existing system, people over the qualifying age for Pension Credit can also receive Housing Benefit and Tax Credits but from around a year after the launch of Universal Credit, they will no longer be able to apply for these benefits. At this point, Pension Credit will be changed to include:

  • a new element called Housing Credit, for pensioners who are eligible for support with rent
  • an additional amount for dependent children in the Guarantee Credit element.

Effect on Disability Element of Working Tax Credit

Under Universal Credit any person requiring additional support due to a disability will have to take the Work Capability Assessment. Anyone found fit for work will receive no extra financial help through Universal Credit.