Universal Credit: Eligibility and How Payments Work
Universal Credit is a monthly payment towards living costs for people in the UK who are 18 or over (with some exceptions for 16 to 17 year olds), under State Pension age, and have £16,000 or less in money, savings and investments. Your award starts with a standard allowance, may include extra amounts for children, and is reduced by 55p for every £1 you earn and by rules on capital above £6,000.
Who can claim
According to GOV.UK, you must live in the UK, be 18 or over in most cases, under State Pension age, and hold £16,000 or less in savings and investments.
Sixteen and seventeen year olds can claim only in some situations listed on GOV.UK, for example if they have a health condition or disability, care for someone, or are responsible for a child. If you are in education or training, other rules may apply.
In Scotland, some people can choose to receive payments twice a month instead of once. The underlying calculation remains monthly.
Universal Credit is separate from Child Benefit, which is based on responsibility for children rather than household income alone, though you may receive both if you qualify. Other guides are in the benefits hub.
Standard allowance
The monthly standard allowance depends on age and whether you claim as a single person or a couple. GOV.UK publishes these figures as current rates:
| Your situation | Monthly standard allowance |
|---|---|
| Single, under 25 | £338.58 |
| Single, 25 or over | £424.90 |
| Couple, both under 25 | £528.34 |
| Couple, either 25 or over | £666.97 |
The standard allowance covers basic living costs. Extra elements can be added for housing, children and health conditions where you meet the tests on GOV.UK.
Your monthly assessment period starts the day you claim. Universal Credit is calculated afresh each period based on income and circumstances reported in that window.
Children
GOV.UK lists £303.94 a month for each child, with an extra £47.94 for a first child born before 6 April 2017. Child amounts sit on top of the standard allowance when you are responsible for children who meet the rules.
Savings and capital
If you have £6,000 or less, capital usually does not reduce your award. If you have more than £6,000 but £16,000 or less, your payment is reduced by £4.35 for every £250 (or part of £250) between £6,000 and £16,000.
Above £16,000, you normally cannot get Universal Credit.
Savings interest may also affect Income Tax if it exceeds your Personal Savings Allowance, which is a separate issue from the Universal Credit capital rules.
Working and the 55p taper
When you work, your Universal Credit payment goes down by 55p for every £1 you earn. Most employers report your wages for you; you normally only need to report monthly earnings if you are self-employed.
If you are eligible for a work allowance, part of your earnings may be ignored before the taper applies. GOV.UK lists £427 a month if you receive housing help through Universal Credit (or live in council temporary accommodation), and £710 a month otherwise. Only some claimants qualify for a work allowance.
Assessment periods and first payment
Each monthly assessment period ends on the same date each month as your first period. Payment usually arrives seven days after the period ends, into your nominated bank account.
The first payment usually takes around five weeks from claim to money in the bank because the initial period must complete first. You can apply for an advance if you need money sooner; advances are repayable from later Universal Credit payments.
Frequently asked questions
Who can claim Universal Credit?
You must usually live in the UK, be 18 or over (with some exceptions for 16 to 17 year olds), under State Pension age, and have £16,000 or less in money, savings and investments.
What are the monthly standard allowance rates?
GOV.UK lists £338.58 for a single person under 25, £424.90 for a single person 25 or over, £528.34 for a couple where both are under 25, and £666.97 for a couple where either is 25 or over.
How do savings affect Universal Credit?
If you have over £6,000, your payment is reduced by £4.35 for every £250 between £6,000 and £16,000. Above £16,000 you cannot usually get Universal Credit.
What is the earnings taper?
Your Universal Credit payment goes down by 55p for every £1 you earn. Most employers report wages automatically to DWP.
When is the first payment made?
The first payment usually takes around five weeks after you claim. You can apply for an advance, which is repaid from later payments.
Sources
Disclaimer: This article is general information and not personal financial, tax or legal advice. Check your own situation with HMRC, GOV.UK or a regulated adviser.