Universal Credit

Guide

Universal Credit is a payment for people over 18 years old but under the State Pension age who are on a low income or out of work. In some circumstances, they can claim if they are 16 or 17 years old, in full-time training or a full-time student. It will be paid twice a month and includes support for the cost of housing, children, and childcare, as well as financial support for disabled people, carers, and people who are too sick to work.

Universal Credit replaces:

Jobseeker's Allowance (income-based)
Employment Support Allowance (income related)
Income Support
Working Tax Credit
Child Tax Credit
Housing Benefit

People still claiming any of the six benefits that Universal Credit replaced, who have a change of circumstances, may need to move to Universal Credit from the date of the change of circumstances.

People who do not have a change of circumstances will get a letter from the Department for Communities when it is time for them to move to Universal Credit. The letter they receive is called a Migration Notice letter. It will be clearly marked so that they know who it is from and will tell them to make a claim to Universal Credit by a certain date. They will have three months from the date on the letter to make their claim.

When someone claims Universal Credit, any benefits or tax credits it replaces will stop. People considering a move to Universal Credit from another benefit should seek independent advice before making a claim for Universal Credit.

People can also use a benefits calculator to check how much they may get.

EEA or Swiss citizens living in Northern Ireland

British or Irish citizens living in Northern Ireland and receiving social security benefits or State Pension when the UK left the EU on 1 January 2021 will continue to receive their benefit payments. They do not need to do anything.

EEA or Swiss citizens living in Northern Ireland before 31 December 2020 can only access social security benefits if they have been granted settled status or pre-settled status through the EU Settlement Scheme. The deadline to apply to the EU Settlement Scheme was 30 June 2021.

Impact on employers

You may find that some of your existing employees will start to receive Universal Credit or you may recruit someone who is receiving it.

Universal Credit is designed to deal with changes in earnings, allowing claimants to receive it when they are both in and out of work. Universal Credit will gradually decrease as earnings increase until wages reach a point that allows the claimant to leave Universal Credit.

Download the Universal Credit information pack for employers (PDF, 362K).

Benefits of Universal Credit for employers

As an employer, you will find that Universal Credit:

makes it easier to fill any job by enabling unemployed people to consider short-term or irregular work
allows existing staff to work different patterns to meet the peaks and troughs without the overheads associated with recruiting and training new staff
is based on earnings and not hours worked, offering more flexibility for staff to increase their hours
enables recruitment from a wider pool of applicants

This provides potential employees with the opportunity to take temporary or seasonal jobs without worrying about making a brand new claim or any gaps between paydays as they move in and out of work.

Download details on how Universal Credit can help your business (PDF, 114K).