Universal Credit

About Universal Credit

Universal Credit is a monthly payment, sometimes twice monthly in Scotland, which helps with your living costs. The payment changes depending on your wages and other circumstances we’ll get onto later.

This brief overview that’ll give you the most important facts about Universal Credit, for a full description including exact payment amounts check out the gov.uk website.

What did Universal Credit Replace?

Universal Credit is a merger of six individual payments. The payments were:

  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • income-based Jobseeker’s Allowance (JSA)
  • income-related Employment and Support Allowance (ESA)
  • Working Tax Credit

Instead of receiving a separate payment for each, recipients now get one larger payment which covers all six benefits.

Anyone receiving the old benefits were automatically moved over to Universal Credit, unless the was a change in circumstances reported to the Department for Work and Pensions (DWP) or they got/were entitled to the severe disability premium.

The transition to Universal Credit is still happening but, as of September 2019, 2.5 million people had started receiving it.

Who’s Eligible for Universal Credit?

To get Universal Credit payments you have to meet the following criteria:

  • you’re on a low income or out of work
  • you’re 18 or over
  • you or your partner are under State Pension age. The moment you both reach pension age, the payments will stop
  • you and your partner have £16,000 or less in savings between you
  • you live in the UK

There are exceptions, 16-17-year olds can apply if they are also, carers, responsible for a child or do not have parental support. There are also possible exceptions for full-time students.

If you’re employed, your payments will start to decrease as your wages go up. For every £1 you earn your payments will decrease by 63p. You’ll be notified once you’re earning enough to stop receiving the benefit payments all together but you can restart your payments if your earnings fall again.

What will you get and how is it Paid?

Everyone on Universal Credit gets a standard allowance (a combination of Income Support, Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA) and Working Tax Credit) depending on your age and whether you live alone.

But then you could get added extras if you have children, have a disability which prevents you from working or need help paying for housing.

These extras change depending on the number of your children, the nature of your health condition/disability and housing factors like the cost of rent in your local area, for example.

Payments are made by direct debit, this can be into your bank, building society, credit union or online banking account. It takes 5 weeks to get your first payment after a successful application.

There is an option to get an advance on your first Universal Credit payment if you can’t wait the 5 weeks.

How to Apply for and Claim Universal Credit

Assuming you meet the above criteria, you can apply through the gov.uk website. To apply online you need the following:

  • your bank, building society, credit union or online banking account details
  • your email address
  • information about your housing (your rent/mortgage payments etc.)
  • details of your income (e.g. payslips)
  • details of savings and investments, like shares or a property that you rent out
  • details of childcare costs, if you’re applying for help with that

You also need proof of ID such as a driving license, passport or a credit/debit card. If you can’t apply online you can book an interview with your local Jobcentre Plus.

Don’t have a Bank Account for Payments to be made into?

You need a banking account to claim Universal Credit payments, they are not made in cash or by cheque.

Opening a traditional bank account can be difficult at the best of times, especially if you have a regularly changing address, irregular income and/or a poor credit rating. There are alternatives though.

You can open a Suits Me account in 10 minutes and start receiving payments moments later. We don’t perform credit checks or require a fixed UK address to open an account for you. Our e-money current accounts don’t include overdrafts or a credit card, so you can’t borrow money or accidentally get caught up in an unarranged overdraft. This is ideal for anyone trying to save and maintain their credit score.

Our accounts come with a contactless Mastercard® debit card, an array of banking features which can be managed via your online banking account or through the mobile banking app, and also a list of cashback rewards all designed to help make saving and account management simple and stress-free.

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