Couple looking at paperwork

What is Universal Credit?

Universal Credit (UC) has been rolled out across the UK, and it’s the single biggest change to welfare in this country since the system began.

There are two key ideas behind UC. It replaces six benefits with one monthly payment and is designed so we should feel better off in work.

Universal Credit is a payment that replaces Housing Benefit, Working Tax Credit, Child Tax Credit, Income Support, Employment and Support Allowance and Jobseekers Allowance

The biggest challenge facing people moving from other benefits to UC is going to be having all the different payments we currently get merged into one single, monthly payment. We will also have to wait at least five weeks for it. Unless we have a budget in place, we might really struggle to make ends meet by the end of the month. 

UC is designed so that we’ll be better off in work

The Scottish Government offers to split the monthly payments into two and have rent money paid direct to a landlord.

The good news is that UC should make us better off in work. The government promises that whatever work we do, we’ll lose less benefit than the money we earn, and be better off. This system is sometimes known as ‘tapering’. And before tapering starts, many have a ‘work allowance’, which is a sum of money we can earn before any benefits are taken away. 

Critics say there are winners and losers when comparing UC to the old system. Also, many workers will claim UC but it has not worked well for those who are paid weekly, fortnightly or four-weekly.

Top 5 tips for getting ready for Universal Credit

  1. Build up a war chest. Waiting times are at least five weeks from making a claim to getting the first payment. Any money – or even long-life food – we can put aside will come in very handy.

2. Make sure we have a bank account that works.

3. Make a budget. If we don’t have a budget in place we’re going to struggle. Switching to monthly payments means we have to plan better for essentials, like rent money. We want it there when we need it.

4. Being online. UC claims must be made online, so we need to either be online, or make sure in advance we have access to the internet at home, at a friend’s or at a library.

5. Don’t Panic. UC seems pretty overwhelming, but there are people ready to help – from Quids in! and Citizens Advice (which has a great website at to local advice agencies. Renting from a housing association or local authority? Ask if they can help. Worried about rent arrears? Speak to your council’s housing team. We must never be afraid to ask for help if we need it.

UC key facts

The following benefits have been replaced by UC

✔ Housing Benefit

✔ Working Tax Credit

✔  Child Tax Credit

✔  Income Support

✔  Income-related Employment and Support Allowance

✔ Jobseekers Allowance*

Key changes to the system

Monthly payments in arrears

One payment per couple, if partners are claiming*

A bank account or similar is required

Housing Benefit paid to claimant, not landlord*

Online management of claim

* with some exceptions

Number Crunched

September 2024: Latest target for all benefit claimants to be on Universal Credit – five years later than planned

6 million: Number of people who were claiming Universal Credit as of January 2021

4.3 million: New starts on Universal Credit between 13 March 2020 and 14 January 2021

Passported benefits

There are some benefits, known as ‘passported’ benefits, that you can only receive if you get a qualifying benefit. These are things such as free school meals, free NHS treatment and prescriptions and the Warm Home Discount.

The rules about who gets what are changing. It could depend on where you

live in the UK, and whether anyone in the household is earning above a certain limit. There has been quite a fuss about the changes so we cannot be sure where things will end up. Check if (and how) you can claim these passported benefits at your initial Jobcentre Plus appointment. If it’s a “no”, consider double-checking with an advice agency.

Thousands of people miss out on an average £437-worth of free school meals. What you might not know is that the school gets extra funding for each child who receives them. So claim if you can.

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