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Universal credit: financial support for people on low incomes

Although not the only form of support available for people who are out of work or on a low income, Universal Credit is central to the government’s benefits policy, as it replaces a number of older schemes and tax credits.  

So how do you go about claiming, and who exactly is eligible? We take a look at the process of accessing financial support and making your claim for Universal Credit. 

Financial support for people on low incomes

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What exactly is Universal Credit?   

Universal Credit is replacing six different benefits and tax credits. These include housing benefit, income-related employment and support allowance, income-based jobseeker’s allowance, child tax credit, working tax credit and income support. It is being rolled out across the UK, and the process should be complete by the end of 2024.   

How does Universal Credit work? 

Universal Credit is usually paid into your bank, building society or credit union account once a month. If you’re claiming as a couple, you’ll still receive a single payment each month, so you need to decide which account you’d like to be credited to. 

Payments will arrive on the same day each month, and if that day happens to be a Bank Holiday, you’ll receive payment on the working day before.  

If you don’t have any kind of bank account, you can call the Universal Credit helpline on 0800 328 5644 to arrange a different way of getting paid. 

Are you eligible? 

Universal Credit is designed for people who are living in the UK and need help with living costs. You don’t have to be unemployed; you can claim if you’re working full or part-time or you’re self-employed, but on a low income. 

Here are the main criteria at a glance: 

  • You need to be over 18, although there are some exceptions for 16 and 17 year-olds  

  • You’re under the state pension age 

  • You live in the UK 

  • You or you and your partner have less than £16,000 in money, savings and investments 

You and your partner. You’ll need to make a joint Universal Credit claim, even if your partner is not eligible to claim. What you receive will partly depend on their income and savings. 

You’re 16 or 17. To get Universal Credit under the age of 18, at least one of these criteria must apply to your circumstances: 

  • You have a medically proven health condition or disability 

  • You care for a severely disabled person 

  • You’re responsible for a child 

  • Your partner is eligible and you’re responsible for a child 

  • You’re expecting a baby within 11 weeks 

  • You’ve had a baby in the last 15 weeks 

  • You have no parental support and are not being cared for by your local authority 

You’re training or studying. You can sometimes get Universal Credit when you’re in full-time education, such as when: 

  • You live with a partner who is eligible 

  • You're responsible for a child 

  • You’ve reached state pension age but your partner has not 

  • You’re under 21 and studying for A levels or equivalent without parental support  

  • You’re studying part-time where no student finance is available 

  • You’re in full-time education and have a disability or health condition 

How much is Universal Credit? 

The exact amount of Universal Credit you get depends on your age and circumstances. The monthly standard allowance rates are shown here: 

A single person under 25 gets £265.31 

A single person over 25 gets £334.91 

A couple both aged under 25 gets £416.45 

A couple aged 25 or over gets £525.72 

There are also several additional elements that you might qualify for, covering children, limited capability for work, disability and housing. You can find the full details at GOV.UK. 

How do you apply? 

Applying is straightforward. Just go to the GOV.UK website, or if you don’t have access to a computer, call the Universal Credit helpline on 0800 328 5644.  

Once your claim is underway, you’ll be asked to go to an interview at your local job centre, where you’ll need to discuss your circumstances and show documents like payslips and bank statements. You’ll also be asked to show proof that you’re looking for work, and you’ll be assigned a work coach, who ensures that you’re committed to finding work — this is called your ‘claimant commitment’. 

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What’s a Universal Credit advance? 

If you’re having trouble paying for essentials during the wait for Universal Credit, you can apply for a Universal Credit advance. This can be done online, by talking to your job coach, or by calling the helpline. You could get a loan of up to 100 per cent of your entitlement, but you will have to pay it back, usually in instalments over the following year. 

What’s Universal Credit sanction? 

A sanction is where you receive a cut in your benefit. This happens because you’ve failed to meet your claimant commitment. There are different levels of sanction depending on what you’ve failed to do, but if you’re very short of money whilst your payment has been stopped, you can apply for a hardship payment, which is an emergency payment for essentials such as food and bills. This will usually have to be paid back once your sanction ends. 

Will Universal Credit go up next year because of inflation? 

There is a strong possibility that Universal Credit will be significantly increased next year, to help meet the increasing cost of living. The amount will be linked to exactly what the inflation rate is when it’s calculated, and this is happening right now.  

Additionally, the government is also giving over 8 million households a means-tested £650 cost-of-living grant. You will be eligible for this if you are claiming benefits such as Universal Credit. 

What about other benefits? 

Many schemes for people on low incomes or without work have been or are being incorporated into Universal Credit — like Housing Benefit, working or child tax credits and Income Support. But there are still other schemes designed to help you make ends meet. Here are a few that could be useful. 

Council Tax Reduction: you might be eligible for up to a 100 per cent reduction on your Council Tax bill. This will depend on your circumstances and your local council. Get in touch with them to find out more. 

Warm Home Discount Scheme: the amount for this winter’s scheme will be set in November 2022 and provides you with a discount on your electricity bill between October and March. It’s a one-off payment that comes directly off your bill. 

Help with NHS prescriptions or health costs: you may be able to get free NHS prescriptions, dental treatment and eye tests. This will depend on factors such as your age, income, health and if you’re getting certain benefits. You can use the online checker here.  

Who do you contact to start applying for Universal Credit? 

To get your claim underway, go to GOV.UK, or call the Universal Credit helpline on 0800 328 5644. 

For more insights on issues concerning benefits and financial support, check out our other content on Unbiased.co.uk.

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About the author
Kate has written for leading publications and blue chip companies over the last 20 years.