Universal Credit

What is Universal Credit? How will it affect you?

08 February 2020
Reading Time: 5 mins

Universal Credit is a single payment for those entitled to financial help. Instead of having lots of different benefits, you get one payment each month which you’ll need to manage yourself. Universal Credit was introduced a few years ago and so far around two million people have claimed it. It’s expected over six million individuals will sign up by the time it’s fully rolled out in 2024.

If you’ve not used it before, here’s all you need to know.

What is Universal Credit?

Universal Credit is a single payment for people who are looking for work or on a low income. Since its roll-out in 2013, it replaced all the various bits and pieces of benefits and credits you used to get:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credits
  • Working Tax Credits
  • Housing Benefit

The main differences between Universal Credit and the former welfare system are:

  1. Universal Credit is available to people in work on a low income and those who are out of work
  2. You can apply and manage your claim online rather than having to go to a government office
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  3. Universal Credit changes as people on low incomes move in and out of work. The idea is that they’ll get ongoing support which should give people more incentive to work for any period of time that is available
  4. Your claim isn’t immediately closed if you get a job with fluctuating hours or you decide to go self-employed
  5. Most people on low incomes tend to be paid Universal Credit when they first start a new job or increase their part-time hours
  6. You receive one payment each month straight into your bank account just like a salary. The government wants people who are out of work to get into the habit of managing their money in the same way as those who work do
  7. Support with housing costs will go directly to the claimant as part of their monthly payment.
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