Universal Credit Guide 2025: Eligibility, Payments, and How to Apply

Universal Credit is a benefit designed to help those who are on a low income or out of work. It rolls several benefits into a single monthly payment, aiming to simplify the process of getting financial help.

Whether you’re new to Universal Credit or switching from previous benefits, this guide covers everything you need to know, from eligibility and payment amounts to how to apply and what to expect.

What is Universal Credit?

Universal Credit is a benefit payment designed to help people whether they’re working and on a low income or currently out of work. It combines various means-tested benefits into a single monthly payment, simplifying the benefits system and making it easier to manage.

Replaced Benefits

Universal Credit replaces multiple benefits such as:

• Housing Benefit
• Child Tax Credit
• Income Support
• Working Tax Credit
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance

These older benefits are no longer open to new applications. If you’re already receiving one of them, you’ll continue to do so until the Department for Work and Pensions (DWP) moves you onto Universal Credit.

Who Can Claim Universal Credit?

Universal Credit is available to those who meet specific eligibility criteria. You can claim Universal Credit if:

• You’re out of work or on a low income
• Aged 18 or over (with some exceptions for 16-17 year olds)
• You or your partner are under State Pension age
• You have less than £16,000 in savings between you and your partner
• You live in the UK

There are exceptions for young people aged 16-17 and those in full-time education, especially if they have disability or health conditions.

Special Rules for Young People and Students

You might be eligible for Universal Credit if you’re 16 or 17 years old, provided you meet certain conditions, like having a child, being estranged from your parents, or living with a disability. Students can also claim if they meet specific criteria, such as having a disability and receiving Disability Living Allowance (DLA) or Personal Independence Payment (PIP).

How Long Does It Take to Get Universal Credit?

It’s important to apply for Universal Credit as soon as you’re eligible, even if you’re unsure about your qualifications. Typically, you can expect to wait up to five weeks to receive your first payment because Universal Credit is paid in arrears.

Here’s a step-by-step overview of the timeline:

1. Submit Your Claim: Your application date sets your monthly assessment period.
2. Assessment Period: You wait one calendar month from your claim date.
3. Payment Processing: After the assessment period, allow up to seven days for your payment to reach your account.

For example, if you applied on 1st October, your assessment period runs until 31st October. You’ll receive your payment by 7th November.

What to Do If You Need Money Urgently

If you’re struggling to cover your basic living costs during the waiting period, you can apply for an advance payment. This is essentially a loan that helps bridge the gap until your first payment arrives. You’ll need to repay this advance from future Universal Credit payments, typically over 24 months.

What Affects How Much You Receive?

Universal Credit is made up of a basic allowance and additional elements based on your personal circumstances, such as:

• Housing Costs: This includes rent or mortgage interest.
• Children: Extra amounts for each child, with additional amounts if your child has a disability.
• Caring Responsibilities: If you provide care for a family member or someone else with a disability.
• Disability or Health Condition: If you or your partner have a disability or long-term health condition that affects your ability to work.

Your Universal Credit payment can be affected by other income, such as earnings from work, a pension, or other benefits. The payment gradually reduces as you earn more, so you won’t lose all your benefits at once.

Working While Claiming Universal Credit

There are no limits on how many hours you can work while claiming Universal Credit. However, the amount you receive will reduce as your earnings increase. This system is designed to ensure that work pays and encourages people to take on employment without the fear of losing all their financial support.

If you’re working, you may qualify for a work allowance, which allows you to earn a certain amount before your Universal Credit starts to reduce. This is available if you have children or if you or your partner have a disability that affects your ability to work. For every £1 earned above your work allowance, your Universal Credit payment reduces by 55p.

Income That Affects Universal Credit

Income that could affect your Universal Credit includes:

• Employment Income: Wages, overtime, bonuses, and other earnings.
• Certain Disability Benefits: Such as Employment and Support Allowance.
• Pension Income: Including workplace and private pensions.
• Other Benefits: Some benefits not replaced by Universal Credit may reduce your payment, such as Carer’s Allowance.

However, not all income counts. For example, Child Benefit, child maintenance, and Disability Living Allowance (DLA) do not affect your Universal Credit payment.

Self-Employed Income

If you’re self-employed, your Universal Credit payments are calculated using an assumed level of earnings known as the Minimum Income Floor. This floor is based on what someone of your age and work capabilities would be expected to earn at the National Minimum Wage. If your actual earnings are below this floor, your Universal Credit payments might be less than expected.

How Do Savings Affect Universal Credit?

Savings and capital can also impact your Universal Credit payments. Here’s how:

• Savings under £6,000: No impact on your Universal Credit.
• Savings between £6,000 and £16,000: Your Universal Credit is reduced based on the amount you have over £6,000.
• Savings over £16,000: You won’t be eligible for Universal Credit.

It’s essential to accurately report your savings when applying, as the DWP regularly checks for discrepancies which can lead to overpayment demands or reductions in future payments.

How to Apply for Universal Credit

Applying for Universal Credit is done online through the GOV.UK website. Before you start your application, gather all necessary information, including:

• Identification Documents: Passport, driving licence, or other ID.
• Financial Information: Details of income, savings, and any other benefits you receive.
• Housing Information: Rent or mortgage details.
• Supporting Evidence: If you have a disability, be prepared to provide supporting evidence, such as medical reports or a DLA claim form.

Step-by-Step Guide to Applying

1. Create an Account: Start by setting up a Universal Credit account on GOV.UK.
2. Complete the Application Form: Fill in the required details about your circumstances, including financial support, housing, and personal details.
3. Submit Your Claim: Once you’ve completed the form, submit your claim.
4. Identity Verification: You may need to attend an appointment at a Jobcentre to verify your identity.
5. Wait for Your First Payment: The first payment usually arrives five weeks after your claim date.

Getting Help with Your Application

If you’re unsure about the application process, you can get free and confidential help from the Citizens Advice Help to Claim service. They can assist with checking your eligibility, gathering the required documents, and completing your application online.

Access to Computers

If you don’t have access to a computer, you can use one at a local Jobcentre, library, or Citizens Advice office. Many Jobcentres also offer extra support for those struggling with online claims, including help with documentation.

What If You Need Money Before Your First Payment?

If you’re struggling to make ends meet while waiting for your first Universal Credit payment, you can request an advance payment. You can do this either online or by contacting the Universal Credit helpline.

To apply for an advance, you’ll need to:

• Explain why you need the advance
• Provide bank account details for the payment
• Have completed your identity check at a Jobcentre

Remember, this advance is a loan that must be repaid within 24 months, starting from your first Universal Credit payment. So, it’s best to only ask for what you need.

Budgeting Advances

If you’ve been claiming Universal Credit for six months or more, you might be eligible for a Budgeting Advance to help with essential costs like replacing a broken appliance, starting a new job, or covering funeral expenses. The amount you can borrow depends on your circumstances and existing debts.

Universal Credit Scams

Unfortunately, scammers often target people claiming Universal Credit. These scams typically involve fake offers of low-cost loans or assistance with your application. The scammers might claim to work for Jobcentre Plus or contact you through social media ads. They may ask for your personal details and offer to make a Universal Credit claim on your behalf, sometimes taking part of your advance payment as their fee.

Always be wary of such offers and never share your personal information with anyone claiming to be from the DWP without proper verification. To avoid falling victim to a scam:

• Always apply for Universal Credit directly through GOV.UK.
• Never share your bank details or ID with unverified sources.
• If you suspect a scam, report it to Action Fraud at 0300 123 2040.

Contact the Universal Credit Helpline

For assistance with your claim or if you have questions, contact the Universal Credit helpline:

• Telephone: 0800 328 5644
• Textphone: 0800 328 1344

The helpline is free to call and can help with any aspect of your Universal Credit claim, including payment issues and changes to your circumstances. These lines are open from 8am to 6pm, Monday to Friday (closed on bank and public holidays).

How Does Universal Credit Affect Other Benefits?

Universal Credit replaces a variety of benefits, meaning once you start claiming, you can’t usually return to the older benefits. If you’re currently receiving Child Tax Credit, Working Tax Credits, or Income Support, you’ll eventually need to move to Universal Credit, either when your circumstances change or when instructed by the DWP.

Other Benefits and Universal Credit

Some benefits are not affected by Universal Credit, including:

• Disability Living Allowance (DLA)
• Personal Independence Payment (PIP)
• Carer’s Allowance

If you’re receiving these disability benefits, they will continue alongside your Universal Credit payments, although you must still declare them as part of your application.

Additional Support for Housing and Council Tax

If you need help with housing costs, Universal Credit includes a housing element to cover rent. However, support for council tax is not included and must be claimed separately through your local council. If you’re struggling with council tax, reach out to your local council for council tax support.

What Happens If Your Circumstances Change?

Changes in your circumstances, such as moving house, getting a job, or having a child, can affect your Universal Credit payments. It’s crucial to report any changes as soon as possible through your Universal Credit account to avoid overpayments or underpayments.

Common changes that must be reported include:

• Changes in income or working hours
• Changes in housing costs or moving home
• Changes in family circumstances, like having a baby
• Changes in health conditions or becoming a carer

Failing to report changes promptly can result in having to repay any overpaid amounts, which can affect your future payments.

Dealing with Overpayments and Underpayments

If you receive an overpayment, the DWP will adjust your future Universal Credit payments to recover the money. If you think the overpayment is incorrect or if it puts you in financial hardship, you can contact the Universal Credit helpline to discuss repayment options.

If you believe you’ve been underpaid, you can also raise this with the DWP, and they will review your claim. It’s helpful to keep all correspondence and evidence of changes in your circumstances to support your case.

Challenging Benefit Decisions

If you disagree with a decision made about your Universal Credit, such as the amount awarded or a refusal to grant a specific element, you have the right to challenge it. This process is called a mandatory reconsideration, where you can ask the DWP to look at the decision again.

How to Challenge a Decision

1. Request a Mandatory Reconsideration: Contact the DWP by phone or in writing to request this, explaining why you believe the decision is wrong.
2. Provide Supporting Evidence: Gather any relevant documents, such as medical reports, pay slips, or supporting evidence from support workers or care providers.
3. Await a Decision Letter: The DWP will send you a decision letter explaining whether they’ve changed their decision.

If you’re still unhappy with the outcome, you can appeal to an independent tribunal. Seek advice from organisations like Citizens Advice or Disability Rights UK if you need help with the process.

Extra Support for People with Disabilities

Universal Credit recognises the unique challenges faced by those with disabilities or health conditions. If you or a family member has additional care needs, you may be entitled to extra support within your Universal Credit payment.

Elements for Disabilities and Health Conditions

• Limited Capability for Work-Related Activity (LCWRA): Extra money if your condition prevents you from working.
• Carer’s Element: Additional amount if you care for someone for at least 35 hours a week who is receiving a disability benefit.

Help for Autistic People and Families

If you or your child are on the autism spectrum, Universal Credit can include extra amounts to help with the extra costs associated with autistic children or autistic adults. This could cover specialised support, equipment, or personal care needs.

Applying for Disability Benefits Alongside Universal Credit

While Universal Credit covers many types of support allowances, you might also qualify for separate disability benefits like Disability Living Allowance (DLA) for children, Personal Independence Payment (PIP) for adults, or Attendance Allowance for older people.

Overall

Universal Credit offers a lifeline for many, providing crucial financial help to cover basic living costs, whether you’re on a low income, have a disability, or are facing other challenges. The system can seem complex, but understanding your rights, the application process, and the support available can help you navigate it successfully.

Remember, if you’re ever unsure about any aspect of Universal Credit, don’t hesitate to seek advice from trusted sources like Citizens Advice, your local council, or specialist support services tailored to your needs.

FAQs

What is Universal Credit?

Universal Credit is a benefit for people on a low income or out of work, combining several older benefits into one payment. It aims to simplify the system and make sure that work always pays.

Who is Eligible for Universal Credit?

You can claim Universal Credit if you’re over 18, under State Pension age, have less than £16,000 in savings, and live in the UK. Certain exceptions apply for young people aged 16-17 or those studying with a disability.

How Much Will I Get on Universal Credit?

Your payment depends on your circumstances, including housing costs, care responsibilities, and any disability benefits you might be entitled to. Use a Benefits Calculator for a personalised estimate.

How Does Universal Credit Affect Other Benefits?

Universal Credit replaces several other benefits like Child Tax Credit, Income Support, and Housing Benefit. If you’re on these, you’ll eventually move to Universal Credit.

Can I Work While Claiming Universal Credit?

Yes, you can work as many hours as you want. However, your benefit amount will reduce as your income increases, with a 55p reduction for every £1 earned over your work allowance if eligible.

How Does Savings Affect My Universal Credit?

Savings under £6,000 won’t affect your Universal Credit, but anything between £6,000 and £16,000 will reduce your payment. Savings over £16,000 disqualify you from claiming Universal Credit.

What Can I Do If I Need Money Before My First Payment?

You can request an advance payment of your Universal Credit, which acts as a loan to help with basic living costs during the waiting period.

How Do I Apply for Universal Credit?

Apply online through GOV.UK. Make sure you have all necessary documents, including proof of income, housing costs, and any supporting evidence for disability benefits.

What Counts as Income for Universal Credit?

Income that affects Universal Credit includes wages, certain disability benefits, and pension income. However, Child Benefit and child maintenance do not count.

What Should I Do If I Suspect a Universal Credit Scam?

Report any suspicious activity to Action Fraud. Always use official channels like GOV.UK for your application and avoid sharing personal details with unverified sources.

Can I Get Help with My Application?

Yes, the Citizens Advice Help to Claim service provides free and confidential support, guiding you through the application process and helping you gather the necessary documents.