Universal Credit

Universal Credit, intended to simplify the benefit system

Universal Credit (UC) replaces six working age benefits with one monthly payment. It does not cut off completely if you move from unemployment to employment, or increase the hours that you work.
 

Update March 2026 – Managed migration

Dealing with Universal Credit (UC) is a reality that is coming ever closer for all benefit claimants as the DWP speeds up the timetable for managed migration from the older income-based benefits that are being replaced.

The first group to face the cut-off is people receiving any sort of tax credits, which will stop in April 2026.

The general rule is that you have three months to act once you receive your migration notice. If you don’t respond, your benefit claim is closed. Government figures show that up until May 2024, more than a quarter of households who were sent a migration notice didn’t act on it, and so stopped receiving benefit.
 

Many more cases to be processed

The DWP has been dealing with an average of 36,000 transfers to UC per month, and in February 2025, this will increase significantly, to 63,000 a month until the managed migration process is complete, which is expected to be early in December 2025.
Questions have been raised about the capacity of the department to manage so many more cases, particularly as there is likely to be a significant proportion of complex cases amongst those making the move from ESA.

DWP minister Stephen Timms announced the new timescale and also said that the Citizens Advice Help To Claim service will be receiving extra funding, as much as an additional £15 million, to provide free and confidential advice to ESA claimants.

This is a link to the relevant page on the Citizens Advice website (external link will open in a new browser tab or window)

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March 2020 – Claimants who could be better off on Universal Credit

The DWP assesses that these claimants will be better off:

• People in the Employment and Support Allowance (ESA) Support Group who don’t receive the Severe Disability Premium

• In-work households receiving Housing Benefit only or Working Tax Credit and Housing Benefit (likely to have higher entitlements under UC as the earnings taper rules are more generous)

• People not working enough hours to receive Working Tax Credit

• Households who are not currently claiming all the legacy benefits they are entitled to.
 

People who are likely to be worse off on UC

• Households in receipt of Employment and Support Allowance (ESA) who are in receipt of the Severe Disability Premium and Enhanced Disability Premium

• Households with the lower disabled child addition on legacy benefits

• Self-employed households who are subject to the Minimum Income Floor, after the 12 month grace period has ended.

• In-work households that worked a specific number of hours (For example, a single parent working 16 hours claiming Working Tax Credits)

• Households receiving tax credits with savings of more than £6,000 and up to £16,000 – UC entitlement is reduced in a different calculation to tax credits (households with savings of more than £16,000 are not normally eligible for UC).
 

The fate of disabled people on ESA

The DWP figures suggest that of the 1.2 million people claiming ESA:

• 600,000 will be better off

• 100,000 will see no difference

• 500,000 will be worse off
 

Transitional support for universal credit

As part of the process of compulsory transfers on to Universal Credit, the government has promised to provide transitional support, so that nobody is left worse off at the point of transfer. This transitional support will be eroded over time with increases in UC elements – excluding the childcare costs element – and it will stop if claimants’ circumstances change.

There is specific protection for people who had a change in circumstance and were receiving Severe Disability Premium.

New claimants and those migrating from tax credits who are self-employed will be eligible for a 12-month start-up grace period before the Minimum Income Floor applies, to help them grow their business.

It is important to note that you will only get transitional support as part of the managed migration process. People who move onto UC on a voluntary basis or through changing circumstances won’t be eligible. And UC is a one way street: once you have gone onto it, you cannot return to the previous benefit(s) you were receiving.

You can read Government guidance about migration to universal credit here (external link will open in a new browser tab or window)

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Update March 2020: UC and pensions

The Department for Work and Pensions (DWP) has announced a run-on to benefit people claiming UC, when they reach state pension age.

Until now, Universal Credit would suddenly cut off at State retirement age, with a gap of several weeks before pension payments kick in.

Under the new arrangements, claimants will receive an average one-off payment of £350.

Single 25 or over – £424.90

Couples both 25 or over – £666.97

An estimated 200,000 people will automatically qualify for this.

The measure is expected to cost about £70 million over the next five years, according to the DWP.

 

Pensioners and pension credit

Benefit claimants and anyone else approaching state retirement age with a low income should claim pension credit.

Even if the amount you are awarded is only small, this is a gateway benefit that brings you access to other forms of financial support.

More about pension credit here.

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The six benefits UC replaces are:

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

Universal Credit does not replace the disability-related benefits PIP (Personal Independence Payment), DLA (Disability Living Allowance), or Carer’s Allowance.

People with disabilities are affected by the changes, if they receive any of the six benefits listed above.
 

How to Apply

Applications for Universal Credit have to be made online; You can make an application from the link on this page. Anyone who doesn’t have internet access can use a computer at the Job Centre, and get face-to-face help making the application as well.

For advice over the telephone to help with an application, these are the numbers – Telephone: 0800 328 5644; Welsh language claim line 0800 012 1888; Textphone for hearing impaired claimants: 0800 328 1344.

It is estimated that an application takes about 20 to 40 minutes to complete, and successful applicants should receive the first benefit payment five weeks after making the application. This is because it is paid monthly in arrears.

Citizens Advice and Citizens Advice Scotland have been funded by the government to provide support for Universal Credit applicants – more information here
 

Deaf and hearing impaired applicants

Universal Credit claimants can now access British Sign Language interpreters as part of a free video relay service provided by the Department for Work and Pensions.

The service can be used to help make a new claim or for those already claiming Universal Credit. It is part of a package of measures put in place to provide quicker and easier access to benefits during the COVID-19 crisis.

The Video Relay Service (VRS), allows users to make BSL interpreted video calls via their tablet, smartphone, computer or laptop. A professional interpreter then relays the call in English to a member of DWP staff.

The service will be available through the GOV.UK. website

DWP staff won’t see the caller or the interpreter, but will receive a phone call from the interpreter who will translate into BSL.

There is no need to book the service in advance which allows the conversation to take place in real time.
 

Delays and Advance payments

You can ask for an advance payment within five days of making your claim, if you don’t have enough money to manage until the first payment comes through.

Remember, though, that this is a loan, and will need to be paid back. Repayments will be spread over 12 months.

In 2017, around one quarter of new claims were not paid in full on time. The average delay was four weeks, but from January to October 2017, 40% of those affected by late payments waited in total around 11 weeks or more, and one in five waited almost five months.

Despite improvements in payment timeliness, in March 2018, 21% of new claimants did not receive their full entitlement on time, with 13% receiving no payment on time.

People with more complex cases are more likely to be paid late.

The full digital service of Universal Credit was rolled out to all areas in December 2018, which means new claimants need to apply online for the benefit.
 

Existing benefit recipients gradually being transferred

For those people who receive benefits or tax credits already, and whose situation hasn’t changed, the move to Universal Credit is happening gradually in a process referred to as “managed migration”.

Initially, some 10,000 people were transferred in 2019 as part of a pilot scheme. Following this, people will start to be moved over to Universal Credit in large numbers.

The government plans to complete the process by the end of 2023.
 

Emergency help

If you are in dire financial need, you can ask to be referred to a food bank. Increased food bank use has been linked with the introduction of Universal Credit, and particularly the delays people face in receiving money at the start of a claim.

Your local Citizens Advice or the emergency social services contact at the council can refer you.

Crisis loans are no longer available in England and Wales. For people on Universal Credit, the replacement budgeting loan is not an option – instead, you should ask for a Budgeting advance.

In Scotland, there are Crisis Grants, paid from the Scottish Government’s Scottish welfare fund.

In Northern Ireland, Crisis loans have been replaced by Finance Support.

More information on these coming shortly.
 

Budgeting

As Universal Credit is paid monthly, it requires budgeting skills to manage it well.

Social housing tenants will be receiving money in place of Housing Benefit, which would have been paid directly to the landlord, so will need to make sure it goes to paying rent, rather than being spent in other ways. There is help available with setting up a budget on the Money Advice Service website (link will open in a new browser window).

If you are receiving Housing Benefit when you make a claim for UC, you will continue to receive it for two more weeks, in an attempt to ease the transition.

You may be eligible for a Discretionary Housing Payment from the local authority – there is more information here
 
If you get Universal Credit, you may also be eligible for other benefits such as Disabled Facilities Grants and Cold Weather Payments.
 

How Much is Universal Credit?

There isn’t a set amount for this benefit – the idea is that the amount varies according to the claimant’s situation, taking into account any savings, any income from work or investments; and outgoings such as housing costs and costs associated with children.

The maximum amount will then also be subject to the Benefits Cap – a ceiling on possible benefits, designed to ensure that a working age individual claiming benefits cannot be better off than someone who is in work, and receiving an average wage.

You can work out what you are likely to receive by using the calculator on the EntitledTo website (link will open in a new browser window)
 
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Appealing a Decision

The first step, if you are turned down for Universal Credit, is to contact the DWP and ask them to look again at their decision; a process known as “mandatory reconsideration”. Make it clear why you think they should reconsider – if your circumstances have changed, for example.

You should let them know within a month, either by phone or in writing, if you are unhappy with their decision. They will respond with a “mandatory reconsideration notice”, either explaining the decision, or changing it.

If you aren’t satisfied, you can then appeal to a tribunal. The form you need to complete can be downloaded here (link will open in a new browser window).

You will need to include your mandatory reconsideration notice with the appeal paperwork. You will find the address to send it to on the form itself.

It may be easier to manage the appeal process with the help of an adviser.

Article ends – click to return to top or check out related resources below

Further reading and resources

You can find a local agency to support your appeal on the Turn2Us website (link will open in a new browser window)

People who lost out on Severe Disability Premiums when moved on to Universal Credit have a long wait for refunds from the DWP

The unpleasant aspect of UC which takes many by surprise is automatic benefit deductions

 
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