Universal Credit is the new benefit to help when you are on a low income or out of work. The past few months have been tough on everyone, and there are many more hurdles ahead, as we cope with the consequences of the COVID-19 pandemic. Knowing how Universal Credit works and whether you are entitled to apply for it is crucial. Understanding if you’re entitled to Universal Credit can provide you with a little reassurance about the future.
When can Universal Credit help you?
If you’re having financial difficulties or you are currently out of work, then you should keep Universal Credit in mind. The benefit could help you if:
- Are struggling to pay your bills.
- You've recently lost your job, and you don't have any income.
- You're currently working, but your income is very low or has dropped.
- You are caring for someone.
- You have a disability or illness that stops you from working.
Can you claim Universal Credit?
Universal Credit is designed to help anyone who is either out of work or on a low income. You can claim Universal Credit if:
- You're unemployed, or your income is low.
- You are aged 18 or over.
- Either you or your partner is under the state pension age.
- You and your partner’s savings are below £16,000.
- You live in the UK.
You should note that if you live with a partner, then their income and savings will be taken into account when calculating how much you’ll get. You will also have to apply together.
What if you are already claiming benefits?
If you are already receiving certain benefits, then you should be aware that Universal Credit is replacing some of those under a single benefit payment. The Department for Work & Pensions (DWP) refers to these as legacy benefits, and they include:
- Housing Benefit.
- Child Tax Credit.
- Income Support.
- Working Tax Credit.
- Income-based Jobseeker’s Allowance.
- Income-related Employment and Support Allowance.
If you receive any of the above benefits, then you might be entitled to Universal Credit. You don't have to do anything if you receive any of the above benefits. DWP will contact you about transferring your benefits to Universal Credit and advise you about any other things you might need to know about. If your benefit circumstances have changed, then you should contact DWP.
Keep in mind that if you are receiving a severe disability premium, then you are not eligible to receive Universal Credit.
What if you are above the State Pension age?
You can’t claim Universal Credit if you are above the State Pension age. If your pension income is meagre, you might be eligible for Pension Credit. You can read more about State Pension and the Pension Credit in our previous posts.
Please note that if you are a couple, then you and your partner can claim Universal Credit if one of you is under State Pension age. Once you both reach State Pension age, then your Universal Credit payments would stop.
How much can you get?
Many different elements make up Universal Credit, so what you get depends on many things. The standard allowance in 2020 is:
- £409.89 if you are single and 25 or over (£342.72 for those under 25).
- £594.04 for you both if you are with a partner and you are 25 or over (£488.59).
You might receive more or less on top of the basic allowance if:
- You have children who are dependant on you.
- You are working.
- You claim a pension.
- You are disabled or caring for someone with a disability.
- Your savings and capital are above £6,000.
Remember to report any changes in your circumstances to DWP. For instance, if you find a better paying job or your health conditions changes. You might have to repay the money you received if you didn’t inform DWP or you made a claim based on the wrong information.
What happens if you are working?
As mentioned, you are allowed to claim Universal Credit if you are working but on a low income. If you are in employment, your Universal Credit will reduce the more you earn. For every £1 you earn through work, your payment reduced by 63p. You don’t have any limit regarding the hours you work.
You are allowed a monthly ‘work allowance’ if you are responsible for a young child or you live with a disability or health condition that affects your ability to work. The monthly work allowance is:
- £292 if you get help with housing costs.
- £512 if you do not get help with housing costs.
How to apply for Universal Credit?
If you are entitled to claim Universal Credit, then you can apply for it online. The online portable is available on the Universal Credit website.
You should have the following information with you when you are making a claim:
- Your bank, building society or credit union account information.
- Your email address.
- Information about your housing, including how much rent you pay or what your mortgage is.
- Details of your income.
- Details of savings and any investment you might have.
- Information about possible childcare payments if you need help with childcare costs.
You will be asked to verify your identity. You can do this by providing your driving licence, passport or debit or credit card information.
Please note that you have to make a joint claim if you live with your partner. Only one of you needs to complete the claim form and can enter the details for both of you. You do not have to be married.
If you have any questions about the application process, contact the Universal Credit helpline at 0800 328 5644.
You can check your eligibility online and see how much you might get before making a claim. If you are uncertain about your future income or afraid you might lose your job soon, then it's a good idea to get to know the system in advance. This will make the application process smoother and ensure you get the help you need as quickly as you can.