Universal Credit has replaced several older benefits – including housing benefit, income support and income based jobseeker’s allowance.
What is Universal Credit?
Universal credit is a monthly payment for people of working age, designed to top up income to a minimum level.
Providing your income and savings don’t go above certain limits, you can carry on claiming universal credit if you are working or out of work. Universal credit may help people on low incomes who move in and out of work by reducing the problems caused by benefits stopping and starting.
Universal credit has replaced these benefits:
- housing benefit
- income support (IS)
- income based jobseeker’s allowance (JSA)
- income related employment and support allowance (ESA)
- child tax credit and working tax credit.
These are sometimes called ‘legacy benefits’.
When do I claim Universal Credit?
New claims :
Most new benefit claims for help with living costs and rent will be for universal credit. So instead of claiming any of the ‘legacy benefits’ listed above you will apply for universal credit.
There are some exceptions, including where people are receiving the Severe Disability Premium.
Benefits other than the ‘legacy benefits’ are not being replaced by universal credit so you can continue to claim them. These include contribution-based JSA, contributory ESA, child benefit, carer’s allowance, bereavement support payment and personal independence payment.
Existing claims : change of circumstances
If you are already receiving one of the ‘legacy benefits’ but have a change of circumstances, for example, you move to a different council area, have a change in your household or change jobs, then you might be asked to make a new claim for universal credit instead. Your old benefits will stop.
This is known as ‘natural migration’.
Existing claims : no change of circumstances
If you are already receiving one of the ‘legacy benefits’ but have no change of circumstances, the DWP will gradually move you on to universal credit. This is due to happen between 2020 and 2023. You do not need to do anything before then.
This is known as ‘managed migration’.
How much will it be?
The amount of universal credit you get will depend on your level of income and family circumstances. There is a basic personal allowance with additional amounts for children, disabilities, caring responsibilities and housing costs.
Universal credit is subject to the household benefits cap. This means the total amount of benefit you will be paid in Wales will be up to a maximum of £384.62 per week for couples with children or lone parents, and £257.69 per week for a single person.
Since the 6 April 2017 universal credit has been limited to 2 children. This means that if you already had 2 children and were claiming universal credit before this date, you will not get any extra money for any subsequent children born on or after 6 April 2017. There are some exceptions, for example children from multiple births, or adopted children. If you are claiming universal credit for the first time after 6 April 2017 and have 3 or more children, you will probably be told to claim tax credits and housing benefit instead. See the Gov.UK guide for Universal Credit and families with more than 2 children.
For more information on tax credits and how to claim universal credit for couples, see Money Advice Service.
Can I get help with paying my rent?
You can apply for help with the cost of your rent as part of your claim for universal credit. This is known as the ‘housing costs’ element of your claim. There is no need to make a separate claim for housing benefit.
Housing costs will usually be paid directly to you as part of your monthly universal credit payment. Payments will be made to you monthly in arrears. You are expected to budget for your rent and pay it from your single monthly universal credit payment and any other money you get.
If you can’t manage your budget, you can ask for your housing costs to be paid straight to your landlord. You will need to speak to your work coach or call the Universal Credit helpline on 0345 600 0723 – ask for an Alternative Payment Arrangement (APA). If approved, you rent will be paid direct to your landlord, which means that you will not have to worry about paying it over yourself. An APA is most likely to be agreed if you are vulnerable in some way, for example, you are in supported accommodation, have a disability or fleeing domestic abuse. A landlord can ask for an APA themselves if you fall into rent arrears (landlord guidance here and also available in Welsh here).
Money Advice Service can provide more information on managing your rent payments on universal credit. You could also use their budget planner and debt test tool to help you organise your money and get things under control.
Since 1st April 2017, if you are single and aged between 18 and 21 years, you may not be entitled to housing costs in your universal credit claim unless you:
- have dependent children
- receive certain disability benefits
- are in temporary homelessness accommodation provided by the council
- are a victim of domestic violence
- are unable to live with your parents, or
- are working and you earn the monthly equivalent of 16 x the National Minimum Wage.
The amount of universal credit you can get is limited if:
- you rent a home with more bedrooms than rules say you need, or
- you rent from a private landlord, are single, under 35 with no dependants. In this case the maximum you can get is the same rate you would get for renting a single room in a shared house (this is known as the ‘shared accommodation rate’). There are some exceptions, including some care leavers, so if this applies to you get further advice.
If the help you get to pay your housing costs doesn’t cover all your rent you may be able to get a discretionary housing payment.
Can I get help with paying my mortgage?
You can apply for help with payment of your mortgage as part of your universal credit claim. This is known as the ‘housing costs’ element of your claim. Housing costs can contain payments to help with mortgage interest, known as Support for Mortgage Interest payments (SMI)
These payments cannot cover anything towards the capital sum of your mortgage and are only available for universal credit claimants who are not doing any paid work. They are paid only after you have been receiving universal credit for 9 consecutive months.
Since April 2018, SMI payments are paid as a loan. This means that they have to be paid back, with interest.
Universal credit claimants who have mortgages may have to reconsider their housing options if their benefits are too low to allow them to keep up with their payments. Have a look at our pages on mortgage arrears and mortgage repossession for further advice.
How do I apply for Universal Credit?
You are expected to make your claim for universal credit online whenever possible. An online account will be created for you and you are expected to manage the account yourself, uploading documents, and telling the DWP about changes in your circumstances through the homepage. You can make your claim and/or manage your account through your smartphone.
If you can’t get online or use a smartphone or computer you should be given help to complete your claim.
Click here to make a claim for universal credit, or phone 0345 600 0723 if you need help to make your claim.
If your claim for universal credit is successful, you will be given a ‘work coach’ and you will probably have to attend an interview at your nearest Job Centre Plus.
You will also have to accept a ‘claimant commitment’ which sets out what you will need to do in order to keep getting universal credit. What you will have to do will depend on your particular circumstances. If you don’t complete the agreed tasks, your payments may stop.
Before you start your claim, watch this video from the DWP which explains in detail how you make a claim for universal credit online:
How will my Universal Credit be paid?
You should get your first payment of universal credit within 5 weeks of making your claim.
If you need money to live on before your first payment is made, you can apply for an advance payment, which you will then pay back in instalments out of your benefits. The advance payment can be up to 100% of what you are estimated to receive, and will have to be paid back over the next 12 months.
Payments of universal credit will usually be made every month into your bank account. Payments are made in arrears, not in advance. It may sometimes be possible for payments to be made more frequently, or to be split. These payments will include any housing costs and you will be responsible for paying your rent out of those payments to your landlord.
Where can I get more help?
Visit Money Advice Service for more information on universal credit.
For help with your claim you can use your online account or ring the Universal Credit freephone helplines:
Universal Credit live service: 0800 328 9344
Universal Credit full service: 0800 328 5644
Universal Credit housing line: 0800 328 3844
Welsh line: 0800 328 1744
Text phone: 0800 328 1344
Monday to Friday, 8am to 6pm (closed on bank holidays).