Universal Credit is a payment to help with your living costs.
You may be able to get it if you’re on a low income, out of work or you cannot work.
The Department of Work and Pensions’ (DWP) mission statement for Universal Credit states that UC was created to give incentives for claimants to get back into work, to reduce in-work poverty and to make it easier for claimants to understand how to apply for income-related welfare benefits.
Since 2013, Universal Credit has begun to gradually replace these six previous income-related welfare benefits for working age claimants:
- income-based Jobseeker’s Allowance (JSA)(IR).
- income-related Employment and Support Allowance (ESA)(IR).
- Housing Benefit (HB).
- Income Support (IS).
- Child Tax Credit (CTC) and Working Tax Credit (WTC).
These benefits are sometimes referred to as, Legacy benefits.
Unlike the Legacy benefits mentioned above, which are paid weekly or fortnightly, Universal Credit is paid to claimants on a monthly basis. This is referred to as an ‘assessment period’.
As Universal Credit is an income-related welfare benefit, a claimant (and their partner’s) savings, earnings and capital will always be considered for eligibility.
This means that, if you have savings or capital over £16,000, unfortunately, you will not be eligible for UC at all.
If you have savings or capital between £6,000 and £16,000, a ‘tariff income’ is applied. This means that for every £250 you have in savings or capital in excess of £6,000, up to the amount of £16,000, £4.35 per week will be deducted from your UC maximum amount per month.
In March 2025, the government announced changes to how UC is paid, but these will not apply until 2026.
Useful pages: Citizen’s advice and the Government website.