Universal Credit Explained

Eat or Heat's guide to Universal Credit

What is Universal Credit?

Universal Credit is a new, single benefit that will eventually replace six means-tested benefits for people of working age such as Housing Benefit and Working Tax Credits.

It’s there for people on low incomes or not in work to help them meet their living costs.

How does it get paid?

While Universal Credit is a single benefit, you will still be awarded different “elements” to cover different needs, for example housing costs.

It’s made in one payment straight into your bank at the end of the month.

When will I get Universal Credit?

Universal Credit is being rolled out gradually across the country, one job centre at a time. Waltham Forest is operating on the legacy benefit system until Universal Credit is rolled out here in May.

If you already claim benefits:

  • If your circumstances change, you will need to reapply for your benefits. You’ll either get the old-style benefit or Universal Credit.
  • Otherwise, you will eventually be moved over to Universal Credit as the roll out continues.

I’ve been told I’m moving over to Universal Credit. Will my rate of benefit change?

If you’re moved over to Universal Credit automatically as part of the rollout, you will be paid the same amount. This is called transitional protection.

You may be affected by the benefit cap which limits the total amount of money people can receive.

I already claim Universal credit, but my circumstances have changed. Will anything change for me?

If you make a new claim because your circumstances change you won’t be eligible for transitional protection.

This means you will move to new rates of Universal Credit, which come into force this May.

You may also be affected by the benefit cap.

What constitutes a change of circumstances?

Changes can include:

  • finding or finishing a job
  • having a child
  • moving in with your partner
  • starting to care for a child
  • moving to a new address
  • changing your bank details
  • your rent going up or down
  • changes to your health condition
  • becoming too ill to work or meet your work coach
  • changes to your earnings (only if you’re self-employed)

Find out more here

What changes to Universal Credit are happening this May?

There’s four main changes to Universal Credit payments this May. Some apply to just new claimants, and others apply to existing claimants too.

Taper rate change

In April, the taper rate will change – this is the amount people can earn before their benefit is reduced.

  • For every £1 that’s earned, 63p will be reduced from their Universal Credit payment. Previously it was reduced by 65p.

This applies to people who already claim Universal Credit, and new claimants.

Two child limit

From 6 April 2017, Universal Credit and Child Tax Credit will be restricted to two children. The limit only applies to children born after April 6. There are also a number of exemptions, for example for twins.

  • If you already claim Universal Credit and have two or more children, you won’t be eligible for support for any further children born after 6 April.
  • If you’ve got more than two children, and want to make a new claim for benefit you won’t be able to claim Universal Credit. You will still get Child Tax Credit and be able to claim other old-style benefits until 2018.

Additional payments for people who aren’t well enough to work

New claimants of Universal Credit who are found to be too ill to work at the moment but may be able to work in future will receive a lower Universal Credit payment than previously.

  • New claimants will receive £317.82 a month – the same as the basic rate of Universal Credit for jobseekers.

This applies to new claimants – existing claims aren’t affected.


18-21 year olds who start a new claim for Universal Credit will not be automatically entitled to the housing element of the benefit. There are a number of exemptions, such as those with children.

This doesn’t apply to existing claims.

When will I receive my first payment?

After your application is accepted there’s a  5 – 6 week wait for the first Universal Credit payment. You can apply for a loan to help with living costs in the meantime by contacting your work coach at your local Jobcentre.

Once you start receiving Universal Credit you can also apply for a ‘budgeting advance’ to cover an unexpected expense, such as fixing your car or moving home.

Making a Universal Credit claim – a user’s guide

Applying for Universal Credit depends on whether you’re in a live service or full service area.

Step 1

Work out if you’re in a live service or full service area. You can do this by visiting gov.uk and typing in your postcode.

Step 2

Universal Credit applications are made online at gov.uk. You’ll be asked about your income and savings so have all your paperwork to hand.

Step 3

In most cases you will  also have to attend a follow-up interview to support your claim and prove your identity.