With unemployment soaring due to Covid-19, many people are applying for Universal Credit for the first time. This is the first of a two-part guide on the Universal Credit system and how it works. Firstly, this article will explain what Universal Credit is, the eligibility criteria for it, and how to claim. The second article, which you can access here, will discuss how Universal Credit payments work.
Universal Credit is a means-tested benefit to help with your basic living costs. This means it could be affected by your capital, income or any other benefits you claim. This will go into more detail below. It is paid monthly, however, it can be paid more frequently depending on your personal circumstance. For example, if you request it or if you live in Scotland.
Universal Credit has been replaced by the following 6 Benefits:
- Housing Benefit
- Income Support
- Income-related Employment and Support Allowance (ESA)
- Child Tax Credit
- Working Tax Credit
- Income-based Jobseekers Allowance (JSA)
If you are currently on one of those six benefits you will eventually move to Universal Credit and will be contacted by someone from the Department for Work and Pensions (DWP). If you report a change of circumstances on those benefits you may be switched to Universal Credit and will not be able to move back to the previous benefits you were on.
The differences between Universal Credit and the previous benefits:
- You can receive Universal Credit if you’re either unemployed or employed depending on your circumstances and the amount you are paid.
- A single payment is made monthly, rather than weekly or fortnightly.
- Your payments will include your personal allowance, rent and child elements all together. Depending on if you are eligible based on your circumstances.
- Your household income will be taken into account. If you live with a partner you must declare this as a joint claim.
Eligibility for Universal Credit
If you are on low income or out of work you may be eligible. You have to be 18 or over to apply, however, there are some exceptions for 16 and 17-year-olds. You must be under the State Pension age, living in the UK and have less than £16,000 in savings. If you live with a partner you both must also have either £16,000 or less in savings.
So how are you paid?
Universal Credit by default is paid once a month. The method is usually a bank, building society or credit union account. If you’re not able to open a bank account, ring the helpline to arrange a different way of getting paid.
If you are awarded the housing element on this will be included in your total amount. You will generally be responsible for paying the rent to your landlord. However, if you struggle to pay the rent money a request would need to be made. Then an arrangement could be made for the money to go to the landlord. You would need to speak with Universal Credit regarding this.
How to claim?
Applying for Universal Credit is done online. If you do not have access to the internet, you may be able to make a claim over the phone by ringing them directly.
If you live with a partner, you will need to apply as a couple. This includes couples who are not married.
Someone from the team might phone you after you’ve sent your application. This could be to gather further information or if you cannot verify your identity online.
Before you apply, you will need:
- Your bank, building society or credit union account details (call the helpline if you do not have one).
- An email address.
- Information about your housing (e.g. how much rent you pay).
- Provide information about your income (e.g. payslips).
- Information regarding savings and any investments (e.g. shares or property that you rent out).
- Details of how much you pay for childcare – if you’re applying for help with childcare costs.
If you do not provide the right information when you apply it might impact when you get paid or how much you get.
To start your claim you need to verify your identity online. You will need proof of your identity. This could be done using:
- Driving licence
- Passport
- Debit or credit card
If you have any issues, you can contact Universal Credit directly by calling them. Their number can be found here.
I have my Universal Credit, now what?
If you’d like some help with budgeting your Universal Credit income and managing your money, join our online workshop hosted by finance expert Sam Leigh on 16th February for advice and support.
Want to know more?
Further reading:
https://www.gov.uk/universal-credit
https://www.understandinguniversalcredit.gov.uk/
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