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Universal credit (UC)

Disability Rights UK Factsheet F55

This factsheet is free for you to download. We are committed to providing free information on our website but we are a small charity and if you are able to make a donation to help cover costs of research and updating it would make a big difference.

1. What is universal credit?

Universal credit is a new means-tested benefit that will eventually replace the following current means-tested benefits:

  • child tax credit;
  • housing benefit;
  • income-related employment and support allowance;
  • income-based jobseeker's allowance;
  • income support; and
  • working tax credit

Other benefits (eg disability living allowance and personal independence payment) will remain largely unchanged by the new system.

Universal credit is being phased in over time (see section 10 below) and the current benefits will not disappear for some years.

Universal credit may entitle you to budgeting advances, free prescriptions and dental treatment, housing grants, free school meals and help with hospital fares. For more information, see the Disability Rights Handbook.

2. Who can claim universal credit?

To be eligible for universal credit, you must meet certain basic qualifying conditions. You must:

  • be 18 or over (or aged 16 or 17 in certain cases);
  • be under the qualifying age for pension credit (this is being raised from 60 to 66 between April 2010 and October 2020);
  • be in Great Britain - see below;
  • not be subject to immigration control;
  • not be in education - see below; and
  • have accepted a ‘claimant commitment’ - see section 3 below.

In addition, you (and your partner if you are making a ‘joint claim’ - see below) must not have capital of more than £16,000 and any earnings or income you have must not be too high for any universal credit to be paid. See section 4 below for the calculation.

How do you claim?

You can claim Universal Credit online. Alternatively you can claim by phone:

Telephone: 0345 600 0723
Welsh language (make a claim): 0800 012 1888
Welsh language (report changes): 0345 600 3018
Textphone: 0345 600 0743
Find out about call charges

Joint claims

If you have a partner (including a same-sex partner), you must normally make a ‘joint claim’ for universal credit. In a joint claim, you and your partner must usually meet all the basic qualifying conditions above. However, you and your partner may still be entitled to universal credit as joint claimants if one of you is over pension credit qualifying age or in full-time education (as long as you both satisfy all the other basic qualifying conditions - see above).

In Great Britain

To claim universal credit, you must:

  • be present in Great Britain (GB); and
  • be habitually resident and have the right to reside in the UK, Channel Islands, Isle of Man or the Republic of Ireland.

‘Present’ means physically present in the GB. There are specific rules that may allow you to be treated as present during a temporary absence. 

The term ‘right to reside’ is not defined but is dependent on your immigration status and nationality. You might have a right to reside under United Kingdom rules, European Union law or because you are a British citizen.

The ‘habitual residence’ test is a test to see which country you normally live in. The test will be applied if you have been living abroad.

For more information, see the Disability Rights Handbook.

In education

You will not normally be able to claim universal credit if you are undertaking a course of full-time advanced education. However, you may be able to claim universal credit even if you are receiving such education if you are entitled to attendance allowance, disability living allowance or personal independence payment and you have been assessed as having a limited capability for work (see section 5 below).

For further information and the support that is available for disabled students, contact the Disabled Students Helpline: tel: 0800 328 5050 or email: students@disabilityrightsuk.org

3. Your responsibilities

To qualify for universal credit, you may need to meet certain work-related conditions, known as ‘requirements’. These are recorded in a ‘claimant commitment’. You are likely to incur sanctions (where your universal credit is reduced) if you fail to meet a work-related requirement. Limited hardship payments may be available if you are sanctioned. In certain circumstances none of the work-related requirements will apply to you (see below).

The work-related requirements

There are four different types of requirement:

  • work-focused interview requirement;
  • work-preparation requirement;
  • work-search requirement; and
  • work availability requirement.

Your circumstances will determine which of these applies to you.

The work-focused interview requirement

This is a requirement that you take part in one or more work-focused interviews. These are designed to assess your prospects and assist or encourage you to move into or stay in work.

The work-preparation requirement

This is a requirement that you take action to improve your chances of getting work. This can include taking part in training or an employment programme or undertaking work experience.

The work-search requirement

Here you are required to take all reasonable action to obtain paid work (or more work if you are already working part time). This can include:

  • searching for work;
  • applying for jobs;
  • creating and maintaining an online profile;
  • registering with employment agencies; and
  • seeking references.

You will be expected to search for work for a minimum amount of time each week. This is usually set at a minimum of 35 hours, although the Department for Work and Pensions (DWP) may agree to a reduced time if you have caring responsibilities or a physical or mental impairment. Similarly, you will be expected to look for work of a least 35 hours a week; again the DWP can agree to restrictions taking into account any caring responsibilities or impairment you may have.

The work-availability requirement

You are normally required to be able and willing to take up paid work (or more work if you are already working part time) immediately; you must also be able and willing to attend a job interview immediately.

However, the DWP can allow you up to one month to take up paid work, and up to 48 hours to attend a job interview, if you are caring for a child or someone with a ‘physical or mental impairment’, so that you can make alternative care arrangements.

The DWP can allow you up to one week to take up paid work, and up to 48 hours to attend a job interview, if you are carrying out voluntary work.

Where your ‘physical or mental impairment has a substantial adverse effect’ on your ability to carry out work of a particular nature or in a particular place, you cannot be expected to be available for such work or in such a place.

When do none of the work-related requirements apply?

In certain circumstances, none of the work-related requirements will apply to you. This will be the case if you:

  • have been assessed in the work capability assessment as having a ‘limited capability for work and work-related activity’ (for more information, see Factsheet F71 - work capability assessment);
  • are responsible for a child under the age of one; or
  • have regular and substantial caring responsibilities for a severely disabled person (see 5 below).

Other categories apply. For details, and information on the sanctions and hardship payments, see the Disability Rights Handbook.

4. How much is universal credit?

The amount of universal credit you are paid depends on your circumstances. It is worked out on a monthly basis by comparing your financial needs with your financial resources. Set amounts for different financial needs are added together to arrive at a figure called your ‘maximum amount’. This is the basic amount the law says you need to live on each month. From this figure amounts are deducted for any earnings and other income you receive (see below). The resulting amount will be your universal credit for that month. This may be restricted by the ‘benefit cap’ (see section 8 below).  

The maximum amount

The maximum amount is made up of a ‘standard allowance’ and ‘elements’, paid to cover different needs. The elements are:

  • child element;
  • housing costs element;
  • work capability element;
  • carer element; and
  • childcare costs element.

These are described in sections 5 and 6 below.

The standard allowance

This is the basic allowance, which is always included in your maximum amount. The amount you are entitled to depends on your age and whether you are claiming as a single person or jointly:

  • single claimant aged under 25 - £251.77
  • single claimant aged 25 or over - £317.82
  • joint claimants both aged under 25 - £395.20
  • joint claimants where either is aged 25 or over - £498.89


The calculation of your earnings is based on a net figure after tax, national insurance contributions and any contribution you make to an occupational or personal pension scheme have been deducted. Employer-paid benefits (such as statutory sick pay or statutory maternity pay) are treated as earnings. 

In some circumstance, you may be allowed to keep some of your earnings up to a certain limit before your universal credit is affected; this is known as the ‘work allowance’ (see 7 below). Earnings in excess of the work allowance that applies in your case will reduce your universal credit by 65 pence in the pound.

Income other than earnings

If you have income other than earnings, such as other benefits, these will usually be taken into account in full, so that your universal credit is reduced pound for pound. Some benefits are disregarded in full, for example disability living allowance, attendance allowance and personal independence payment.

Capital and savings

Universal credit has a ‘lower capital limit’ and an ‘upper capital limit’. If you have savings or capital over the upper limit of £16,000, you cannot get universal credit. This figure applies if you are claiming as a single claimant or as a couple. If you have savings or capital at or below the lower limit of £6,000, your universal credit is unaffected.

If your capital is between these limits, it is treated as generating a monthly income of £4.35 for each £250 (or part of £250) above the lower limit of £6,000. For instance, if you have capital of £6,300, it is treated as generating a monthly income of £8.70.

5. The elements

The child element

This is included in your maximum amount if you are responsible for a child or qualifying young person who normally lives with you:

  • first or eldest child or qualifying young person - £277.08
  • each other child or qualifying young person - £231.67

A ‘qualifying young person’ is someone aged 16 to 18 (or 19 in some cases) who has enrolled on (or been accepted for) a course of full-time non-advanced education or approved training, who is not getting an existing means-tested benefit (such as income-related employment and support allowance) or universal credit themselves.

An additional amount is included for each child or qualifying young person who is disabled. It is set at two different levels:

  • a higher rate - £367.92 for a child/qualifying young person who is entitled to the highest rate of the care component of disability living allowance (DLA), the enhanced rate of the daily living component of personal independence payment (PIP) or who is certified as severely sight impaired or blind by a consultant ophthalmologist, or has ceased to be certified in the past 28 weeks; and
  • a lower rate - £126.11 for a child who is entitled to any other rate of DLA or PIP.

The work capability element

This is paid a two different levels. It is included in your maximum amount if you have:

  • a limited capability for work - £126.11; or
  • a limited capability for work and work-related activity - £315.60

The tests for these are the same as those for the work capability assessment for employment and support allowance (the ‘limited capability for work’ and ‘limited capability for work-related activity’ assessments). For more information, see Factsheet F31 - employment and support allowance.

The carer element

A carer element of £150.39 is included in your maximum amount if you have ‘regular and substantial caring responsibilities’ for a severely disabled person. You are considered to have such responsibilities if you are eligible for carer’s allowance (see Factsheet F30 - carer’s allowance), although you do not have to actually claim that allowance.

You are not normally entitled to this element as well as the work capability element (see above) if you would otherwise be eligible for both; only the highest paid element will be included in your maximum amount. However, if you have a limited capability for work and your partner is a carer, both elements could be payable.

The childcare costs element

This will be included in your maximum amount if you pay for registered child care in order to stay in work. There is no set number of hours you need to work to get this element. You will get 85% of your relevant childcare costs met, up to a maximum amount of:

  • £646.35 for one child; and
  • £1108.04 for two or more children

If you are claiming jointly, your partner must also be in paid work, unless they are unable to look after the child because they:

  1. have a limited capability for work;
  2. have  regular and substantial caring responsibilities for a severely disabled person; or
  3. are temporarily absent from your household (ie are in prison, hospital or a care home).

Generally the childcare must be provided by someone who is registered for child care or an equivalent. Relevant childcare is not care provided by a close relative of the child wholly or mainly in the child’s home or care provided by a foster parent.

6. The housing costs element

A housing costs element may be included in your maximum amount if you pay rent or have a mortgage. The element can also cover certain service charges related to these payments.


If you own your home, the housing costs element may cover mortgage interest on loans secured on your property. There is normally a ceiling of £200,000 on the amount of loan that can be covered; this does not apply in the case of any loan taken out for the purpose of adapting your property to the needs of a disabled person. 

There will normally be a ‘qualifying period’ of nine months before the element can be included in your universal credit award. You will not be entitled to the element if you are in paid work.

Private tenants

If you are a private tenant, your housing costs element will depend on where your home is situated and the number of rooms you are deemed to need in the same way as the current housing benefit scheme.

Deductions will be made from the element if you have non-dependants living with you. A non-dependant is someone who lives with you who is not your partner, a child or young person for whom you are responsible, a joint tenant, boarder, lodger or sub-tenant. Typically, an adult son or daughter will be considered to be a non-dependant. The rules are similar to those in the current housing benefit scheme. For more information, see Factsheet F44 - housing benefit.

Social housing tenants

If you are renting social housing (from your local authority or from a housing association), your housing costs element may be reduced if the property you rent is considered to be under occupied. For guidance on this, see Factsheet F57 - the bedroom tax. Deductions will be made from the element if you have non-dependants living with you.

If you are in ‘specified accommodation’ (eg a refuge if you are fleeing domestic violence or accommodation where care, support or supervision is provided to you), your housing support will continue to be met through housing benefit rather than universal credit. For more information on housing benefit, see Factsheet F44 - housing benefit.

Discretionary housing payments

You may be able to get ‘discretionary housing payments’ (DHPs) if your universal credit does not cover all your housing costs and your local authority accepts that you require some further financial assistance.

You must claim a DHP from your local authority; most local authorities will have a form on which to claim. You can view the Discretionary Housing Payments Guidance Manual at www.gov.uk/government/publications/discretionary-housing-payments-guidance-manual

7. The work allowance

Some of your earnings may be disregarded by applying a ‘work allowance’. This will only apply if you or your partner:

  • are responsible for one or more children or qualifying young people (see section 5 above); or
  • have a limited capability for work (see section 5 above).

There are two different rates:

  • a ‘lower work allowance’ of £192; and
  • a ‘higher work allowance’ of £397.

The lower work allowance will apply if a housing costs element is included in your maximum amount (see section 6 above). If a housing costs element is not included in your maximum amount, the higher work allowance will apply instead. In each case, the same rate will apply whether you are a single claimant or claiming jointly with your partner. 

8. The benefit cap

There is a cap on the total amount of benefits, including universal credit, that you can claim. It is £2167 a month if you are a lone-parent or a joint claimant, or £1517 a month if you are single and have no chidren. Benefits that are taken into account when calculating the cap include:

  • bereavement allowance and widowed parent’s allowance;
  • carer’s allowance;
  • child benefit;
  • employment and support allowance
  • jobseeker’s allowance; and
  • maternity allowance.

The benefit cap will not apply if you, your partner or a dependent child are getting certain benefits, including attendance allowance, disability living allowance or personal independence payment. It will also not apply if the higher level of the work capability element has been included in your universal credit award (see section 5 above).

The benefit cap will not apply if your monthly earnings before tax (or combined earnings before tax if you are in a couple) are at least £430.

There is a ‘grace period’ of nine consecutive months when you will not be capped, if you were working for a year and your earnings (or combined earnings) for each month were at least £430. This grace period normally starts from the day after you finished working, regardless of when your universal credit award starts. For example, if you finish work on June 21st 2016 and claim universal credit in September 2016, your nine months starts from June 22nd 2016.

For information about how the benefits cap will apply before the introduction of universal credit or if you are still on housing benefit, see Factsheet F8 - benefit cap.

9. Payment of universal credit

Normally, your universal credit is paid in arrears as a single payment each month. If you have a partner; you can choose who receives the payment. Alternative payment arrangements (eg bi-monthly payments) would only be made if the DWP considered that you could not manage with a single monthly payment; such arrangements would usually only be made for a temporary period.

If all the work-related requirements apply to you (see section 3 above), you will usually have to wait for seven days (the ‘waiting period’) before you are eligible to be paid universal credit.   

10. Timetable for universal credit

Universal credit has now been rolled out to all Jobcentre areas across England, Scotland and Wales (the introduction was delayed in Northern Ireland and will start to roll out from the end of May 2016). In some areas, universal credit is limited only to new claims from single jobseekers (ie claimants who would otherwise have been entitled to jobseeker’s allowance), including those with existing housing benefit and working tax credit claims. In other areas, new claims from couples and families (including lone parents) are also accepted.

To check whether you are eligible to claim universal credit, based on your circumstances, go to www.gov.uk/guidance/jobcentres-where-you-can-claim-universal-credit

11. Transitional protection

You will not lose out immediately when you are moved onto universal credit if your circumstances remain the same. You will get ‘transitional protection’ if your universal credit is less than what you would have got under the old system. This will be an extra amount to make up the difference between the old and the new. You will continue to get this until you are entitled to receive more under universal credit than under the old benefits (which could mean your universal credit is effectively frozen for several years). The transitional protection may be terminated if your circumstances change (eg if you separate from your partner or become a partner). The amount you receive will still be affected by the benefit cap rules (see section 8 above).

12. Where can I get more information?

This factsheet gives a basic introduction to universal credit. You can find out more detailed information in our Disability Rights Handbook. This and all our other publications are available from our shop at https://crm.disabilityrightsuk.org/. You can also place orders by contacting Disability Rights UK.

We have a number of related factsheets on our welfare reform page. All our factsheets are free to download on our website at disabilityrightsuk.org

The DWP has created a universal credit toolkit resource, for partner organisations, available at www.gov.uk/guidance/universal-credit-toolkit-for-partner-organisations

The DWP has published Advice for Decision Making which provides guidance on universal credit decision making. You can view this at www.gov.uk/government/publications/advice-for-decision-making-staff-guide

Ian Greaves
17 May 2016

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