Universal Credit

Universal Credit – Are you ready?

From May 2018 some of our customers who are working age, that experience a change to their circumstances, may be required to apply for a new benefit called Universal Credit.

If you are not sure what it is all about or whether it will affect you, go to our Frequently Asked Questions below and follow the links that apply to you.


What is Universal Credit?

Universal Credit is a new in and out of work benefit, that will eventually replace the following ‘legacy benefits’;

  • Income Based Jobseekers Allowance
  • Income Related Employment and Support Allowance
  • Income Support
  • Housing Benefit
  • Child and Working Tax credits.

It is open to people in a wide range of situations; in work, looking for work, unable to work through sickness or if they have caring responsibilities.


What has happened since May 2018?

Anyone who would have normally made a new claim for any of the six ‘legacy benefits’, is now required to claim Universal Credit instead.

Some exceptions do apply, and this is answered further on.


What about someone on ‘legacy benefits’ already?

If you have a change of circumstances that would end your current benefit entitlement, and result in a claim for another ‘legacy benefit’, you will normally have to claim Universal Credit instead, and any legacy benefits will stop, however there are some exceptions:

  • Severe Disability Premium Gateway

From 16th January 2019, regulations were introduced with a 'Gateway Condition' that claimants must "pass through" to be able to claim UC.  It is to make sure certain disabled claimants don't see a drop in their income.

It is to prevent anyone who is currently (or was recently) getting a Severe Disability Premium in an award of their ‘legacy benefit’ from losing it if they claim Universal Credit. Universal Credit does not have a Severe Disability Premium.


Anyone who fulfils the following criteria will not be able to make a new claim for Universal Credit:-

  • Has the Severe Disability Premium included in their Income-Related Employment and Support Allowance, Income-Based Jobseekers Allowance, Income Support or Housing Benefit,


  • Has had it included in a claim for one of these benefits in the past month and has continued to meet the qualifying conditions for it ever since


  • Still meets the qualifying conditions for it after the change in circumstances that is triggering the need to claim UC.

If you currently receive any one of the named ‘legacy benefits’ and you have your latest award summary letters available, this premium should be listed as part of your award.

However, if you are unsure if you currently receive the Severe Disability Premium within your award summary, please contact the relevant benefit team to check, contact numbers will be visible at the top of your benefit letters.

If you were required to claim Universal Credit before 16th January 2019 but did have an entitlement to the Severe Disability Premium at the time, you should highlight this through the DWP – please use your Universal Credit journal. Also, if you have become entitled to a benefit on or after 16th January 2019, which would entitle you to the Severe Disability Premium (i.e. awarded daily living component of PIP, or middle to high rate of DLA Care, where no one is claiming carers allowance for looking after you or receiving a carer element within their UC, and you live alone), please also highlight this on your UC journal.


How is Universal Credit paid?

Universal Credit is paid monthly in arrears to your bank account. In some cases this can mean a wait of up to five weeks for your money and you will need to plan for this now.


What do I need in order to apply for Universal Credit?

You will need a bank account, e-mail address and access to the internet, as all applications are made online. If you are making a claim and have a partner living with you, when you create your account, you will be given a ‘linking code’ in order for your partner to join their account to yours.

There are many places where you can access the internet and get support if you don’t have access at home.  If you need to make a claim but do not have access to a computer or internet at home, look at local facilities who can provide computer access, for example, your local library, or even Jobcentre Office.

You can make your claim online by following this link

If you need to make a claim but require support to complete the online application, please contact us without delay.


I was receiving Housing Benefit. What will this mean for me?

As long as you prove you have a rent liability by providing a rent statement or tenancy agreement, your housing costs (formally housing benefit) will be included in your Universal Credit payment to your bank account. See next question about paying your rent.


My housing benefit used to go straight to my landlord who pays it now?

You do. With your rent charge verified, you will be entitled to a Housing Cost Element within your Universal Credit payment.  When your payment award summary is available a few days prior to you receiving your Universal Credit, please ensure you check that the amount included towards your rent is accurate.

It’s important that you ensure you pay your rent from your Universal Credit as your housing costs will be included in your monthly payment. Contact us in order to set up a payment method in order to pay across your rent in full.  As you will receive Universal Credit on the same pay date each month, the best method of paying your rent would be through direct debit.  Contact your rent team to discuss this further.

**Failure to pay your rent will put your home at risk**


How is Universal Credit calculated?

Universal Credit is a means-tested benefit, so how much you are entitled to will depend on your own personal circumstances and your income (and savings).

Based on the date you make your claim to Universal Credit, you will be subject to a ‘Monthly Assessment Period’ (MAP).  Therefore, during this period any income received by you and/or your partner will affect your Universal Credit entitlement.


What will affect how much Universal Credit I can get?

The following income will be taken into account when your entitlement to Universal Credit is calculated:

  • Earnings (net)
  • Net profits from Self Employment
  • Retirement Pensions
  • Carers Allowance
  • Contributory/New-Style Employment and Support Allowance (including any transitional protection / 'top-up payment' included in the ESA award due to the claimant being transferred from Incapacity Benefit.
  • Incapacity Benefit
  • Industrial Injuries Benefit (except any Constant Attendance Allowance or Exceptionally Severe Disablement Allowance)
  • Contribution-Based/New-Style Jobseekers Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widows pension
  • Widowed Mothers/Parents Allowance
  • State Retirement Pension

However, whilst some income will affect how much Universal Credit you may get, the following is disregarded:

  • Disability Living Allowance / Personal Independence Payment / Armed Forces Independence Payment / Attendance Allowance / Constant Attendance Allowance
  • Guaranteed Income Payments under the Armed Forces Compensation Scheme
  • Child Benefit
  • Guardians Allowance
  • Special Guardianship Allowance
  • Bereavement Support Payment (not to be confused with Widowed Parents/Mother Allowance)
  • Discretionary Housing Payments
  • New Enterprise Allowance
  • War Disablement Pension
  • War Widows', Widowers' or surviving Civil Partners' Pension


Is there a limit to how many hours I can work with Universal Credit?

There is no limit to the number of hours you can work a week if you get Universal Credit. Your payment will reduce gradually as you earn more (during that respective Monthly Assessment Period). You will not lose all your benefits at once if you are on a low income.


How do I report my earnings from work?

As Universal Credit is a monthly benefit, it is the actual net earnings received by the claimant during the Monthly Assessment Period that is used to work out your Universal Credit entitlement.

Claimants who are paid by PAYE have their earnings reported to HMRC by their employer whenever they are paid. Then HMRC send it by Real Time Information (RTI) to DWP.

The DWP use this information when working out your total earnings during any particular Monthly Assessment Period (MAP).

Weekly paid employees who claim Universal Credit will find that for some Monthly Assessment Periods will be based on 4 weeks' pay and for other months it will be based on 5 weeks' pay

Fortnightly paid employees will find that for some Monthly Assessment Periods their Universal Credit award will be based on 3 fortnightly pay cheques

4 weekly paid employees will find that for some Monthly Assessment Periods their Universal Credit award will be based on 2 four weekly pay cheques

If the claimant is working, and is paid monthly, they will normally receive each wage within a Monthly Assessment Period. This means that if their wages and personal circumstances stay constant, their Universal Credit entitlement should stay the same. However, some claimants may find that in a particular Monthly Assessment Periods their Universal Credit award will be based on two monthly pay cheques (if pay date falls on bank holiday, or a weekend).

Prior to November 2020, this has proved to be a problem area with Universal Credit, and customers have experienced these instances whereby two months earnings have been recorded in the same MAP, and their entitlement to Universal Credit has been reduced to nil.

A ruling in the Court of Appeal in June 2020, decided that this was unfair, which has in turn lead the DWP to revise the way in which this situation is assessed.

From 16th November 2020, new regulations should ensure that working Universal Credit claimants no longer lose out financially by having two monthly wage payments taken into account in one Universal Credit Monthly Assessment Period.

“Where more than one wage is reported via the Real Time Information system (RTI) in the same assessment period, the DWP may determine that one of those payments is taken into account in a different assessment period in order to maintain a regular pattern."


Will I still be entitled to childcare costs?

Workers with childcare costs may be entitled to some help towards these (up to 85% of the childcare costs). You can find out more about how much your maximum entitlement to Universal Credit would be by using the Universal Credit Website.


I still have a few questions where can I get further answers or advice?

Contact us and we will be more than happy to help or go to the Universal Credit Website or Contact Us

Please remember that advice and support is available from us.