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Universal Credit; What Exactly It is? How to Sign Up/Apply/Claim?

What is Universal Credit? How to Apply for Universal Credit? Universal Credit supports a UK citizen if they fall in the Low-Income category or are out of work. It includes a monthly payment to help with living costs. This article will help you understand what Universal Credit means for you.

If you are currently claiming other benefits, why not use an independent benefits calculator to see if you could be better off on Universal Credit? It is also important to get independent advice before you apply. Lanop is the gold standard for helping people with their financial and accounting needs in this regard. You can find out more about Universal Credit on this site. If you’re ready to make a universal credit claim, visit gov.uk/apply-universal-credit

If you are in Northern Ireland, visit

Universal Credit / nidirect

Following are some of the free to use and anonymous Benefits Calculators recommended by the UK government that have replaced the Benefits Adviser service.

Use one of the following:

  • Turn2us – for information on income-related benefits, tax credits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work or change your working hours
  • Policy in Practice – for information on income-related benefits, tax credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit, how these are calculated and how your benefits will be affected if you start work or change your working hours
  • entitledto – for information on income-related benefits, tax credits, contribution-based benefits, Council Tax Reduction, Carer’s Allowance, Universal Credit and how your benefits will be affected if you start work

Applying for a Universal Credit Sign up

Universal Credit online

Use this service for:

Universal Credit sign up by creating a Universal Credit account on gov.uk/apply-universal-credit

  • make a claim
  • join your partner’s claim

You must have an email address. You will also need access to your mobile phone (if you have one). You can sign up for Universal Credit here Sign in.

Universal Credit Claims and Eligibility

Who can claim Universal Credit?

Universal Credit is a payment for people over 18 but under State Pension age who are in a low-income category or are out of work. In some circumstances you can claim if you are 16 or 17, in full-time training or a full-time student.

Universal Credit eligibility

To get Universal Credit, you must:

  • be aged 18 or over (16 or 17 in certain circumstances)
  • be under State Pension age
  • not be in full time education or training (unless exceptions apply)
  • not have savings over £16,000

You’ll get less Universal Credit if you have savings over £6,000 or you earn enough money to cover your basic living costs.

Partner

If you live with a partner as a couple, you will need to make a joint universal credit claim. You will be treated as a couple if you and your partner are:

  • married to each other
  • in a civil partnership
  • living together as if you were married

If you are 16 or 17

If you are 16 or 17 you can get Universal Credit claim if any one or more of the following apply:

  • you have limited capability for work, or you have medical evidence and are waiting for a Work Capability Assessment
  • you are a carer for a severely disabled person
  • you are single and responsible for a child
  • you are part of a couple who are responsible for at least one child, and your partner is eligible for Universal Credit
  • you are at least 29 weeks pregnant
  • you have had a child in the last 15 weeks
  • you don’t have parental support (for example, you don’t have parents and you’re not under local authority care)

If you are in training or studying full-time

If you are in full-time training or are a full-time student, you can get Universal Credit claim if any of the following apply:

  • you are part of a couple, and your partner is eligible for Universal Credit
  • you are part of a couple who is responsible for at least one child, and one (or both) of you is a student
  • you are single and are responsible for a child
  • you are over the qualifying age for Pension Credit (which is increasing in line with the increasing State Pension age) or, in joint claims where your partner is under that age
  • you are 21 or under, in full-time ‘non-advanced education’ (for example, studying for A levels or a BTEC National Diploma), and you don’t have parental support (for example, you don’t have parents and you are not under local-authority care)
  • you are disabled, have been assessed as having Limited Capability for Work (LCW) or Limited Capability for Work and Work-Related Activity, (LWRA) and receive:
    • Disability Living Allowance or Personal Independence Payment
    • Attendance Allowance
    • Armed Forces Independence Payment

For more information, contact your local Jobs & Benefits office  or phone the Universal Credit Service Centre

If you are of Pension Credit age but your partner is not

If you live with a partner who is under the qualifying age for Pension Credit and is eligible for Universal Credit you can still, make a joint Universal Credit claim.

If you get Severe Disability Premium

From February 2021 if you are receiving Severe Disability Premium and you have a change in your circumstances, you may move onto Universal Credit. You will be eligible for transitional payments to make sure you don’t lose money when you move. This known as Transitional Protection.

You must report any changes in your circumstances to make sure you are getting the right payments.

If you are a Frontier or cross border worker

Frontier/Cross-border worker is a term used to describe a person who pursues employment in one country while residing in another country.

If you live in the Republic of Ireland (ROI) but work in Northern Ireland you may make a claim to Universal Credit as a frontier/cross border worker.

You can read further information on Frontier and cross border workers claiming Universal Credit or speak with the our experts at Lanop.

If you are an EU, EEA or Swiss citizen living in Northern Ireland

If you are a British or Irish citizen living in Northern Ireland and receiving social security benefits or State Pension after the UK left the EU on 1 January 2021 you will continue to receive your benefit payments.  You do not need to do anything.

If you are an EU, EEA or Swiss citizen living in Northern Ireland before 31 December 2020 you can only access social security benefits if you have been granted settled status or pre-settled status under the EU Settlement Scheme.  The deadline to apply to the scheme was 30 June 2021 for most people, but you might still be able to apply for EU Settled Status.

Other Benefits You Can Get

You may be able to get the benefits listed below.

  • Carer’s Allowance
  • Industrial Injuries Disablement Benefit (parts of Constant Attendance Allowance and Exceptionally Severe Disablement Allowance may not be included)
  • Maternity Allowance
  • State Pension
  • Widowed Parent’s Allowance
  • New Style Jobseeker’s Allowance
  • New Style Employment and Support Allowance

Important Information: If you or your partner get any of the benefits listed above, the amount you get will be taken off your Universal Credit payments.

Help with health and travel costs

If you are claiming Universal Credit, you may be able to get help with health and travel costs for you, your partner or your children. You may be able to get help with the cost of:

  • Dental treatment
  • Eyesight tests
  • Glasses or contact lenses
  • Travel for treatment on referral by a doctor or dentist

To find out if you can get this help you will need to make a claim using Health Costs Form HC1. Once you have completed this form you can post it or hand it into your local Jobs & Benefits office.

More information is available at Help with health costs

Help With Other Costs

If you are claiming Universal Credit, you may be able to get the following help:

  •  Rate Rebate
  • Support for Mortgage Interest
  • Help with health costs
  • Free school lunches
  • School uniform grants
  • School transport
  • Help from the Healthy Start scheme (external link opens in a new window / tab)
  • Legal aid
  • Cold Weather Payments
  • Social Fund Sure Start Maternity Grant
  • Funeral Expenses Payments
  • Information on the pre-school application process (external link opens in a new window / tab)
  • BT Home Essentials (external link opens in a new window / tab) – a simple low-cost phone service
  • Your local council may offer concessionary rates for some services.

How to Make a Universal Credit Claim

Universal Credit is a secure digital service, and you will make your claim online. You will use your online account to provide information, including what you have done to look or prepare for work.

Universal Credit Online Account

To make a claim you must first sign up for a secure Universal Credit online account.

You can create your Universal Credit online account at Universal Credit online – GOV.UK.

You must submit your claim within 28 days of creating your account. If you don’t submit your claim within 28 days, you will need to create a new account. You will get your first payment about five weeks after you submit your Universal credit claim.

Once you have created your Universal Credit account you can use it to find information about your claim, to contact Universal Credit and to provide information about your claim.

What You Need To Claim Universal Credit 

  • Your email address
  • Details of the bank or building society account you want your Universal Credit paid into
  • Documents to confirm your identity (for example, a UK driving licence or a household bill)
  • Details of any income from work, and any other income (for example, from an insurance policy)
  • Details of your savings, investments and assets
  • Details of any other benefits you are getting
  • Details of your housing costs (including any service charges, but not rates) and your landlord’s details, if you have one
  • Details of the people who live in your home

The Universal Credit Personal Planner will tell you what you need to do to prepare for claiming Universal Credit.

If you need help with your claim, you can contact Universal Credit through  your Universal Credit online account , speak to your Work Coach in your local Jobs & Benefits office or phone the Universal Credit Service Centre. But if you are too busy or find the process complicated and hectic (which it is) just give us a call at Lanop and let your worries, be buried.

How And When You Get Paid Universal Credit

You will get your first Universal Credit payment about five weeks after you claim, and you will receive payments twice a month.

May Day Benefit Payments

If your payment is due on Monday 2 May, you will still be paid by that date.

All benefits run on different payment systems, but you will not receive your payment later than the day it would normally be due.

Your Universal Credit is worked out monthly.  This is called the Assessment Period.
You should claim Universal Credit as soon as possible, as your Assessment Period starts when you make a claim.

How You Get Paid

Universal Credit is paid into your bank, building society or Credit Union account.

In Northern Ireland Universal Credit is normally paid to a household twice a month. A household can be a single person, a couple or a family.

If you live in England, Scotland or Wales go to Gov.uk

Monthly payments

After you have made your claim, you can ask for your Universal Credit to be paid monthly – so you get a payment once a month rather than twice a month. If you want to do this, contact your work coach through your Universal Credit online account or give us call at Lanop.

Splitting Payments With Your Partner

If you are in a couple making a joint claim, you can ask for your Universal Credit payments to be split between you and your partner.  If you want to do this, contact your work coach through your Universal Credit online account.

How Housing Costs Are Paid

If you get money to help pay your housing costs, this will be paid direct to your landlord each month.

When to expect your first payment

You will get your first payment about five weeks after you claim Universal Credit.

Help is available if you do not have enough money to live on until you get your Universal Credit payment.

Universal Credit Assessment Period

Universal Credit is worked out on a monthly basis. This is known as the Assessment Period. The first assessment period starts when you make your Universal Credit claim, so you should claim as soon as possible.

Each assessment period will start on the same date each month and end on the same date each month.   Your Universal Credit payments will be made twice a month, on the same dates each month. For example, if you claim Universal Credit on 4 July:

  • Your first assessment period will be from 4 July to 3 August
  • Your first payment will be 5 weeks after you claim, which is 10 August
  • Your second payment will be on 24 August
  • You will get future Universal Credit payments on the 10th and 24th of each month

If your Universal Credit payment date falls on a weekend or bank holiday, the payment will be made on the previous banking day.

When Money Can be Taken From Your Universal Credit Payments

Money may be taken from your Universal Credit payments to pay back money that you owe, or if you have a Fraud Penalty or Sanction.

When Money Can Be Taken From Your Universal Credit payments

Money can be taken from your Universal Credit payments if you:

  • have had a Universal Credit advance loan or budgeting advance loan
  • have had a hardship payment
  • have had a fraud penalty
  • have had a sanction
  • owe money to third-party suppliers, for example, your gas or electricity suppliers, called a Third-Party Deduction / Last Resort Deduction
  • have benefit debt or have received overpayments
  • have been paid too much Tax Credit

Benefit Debt

Benefit debt is an over-payment of government benefits or tax credits, loans or advances that you have to pay back.

Benefit debt includes the following.

  • Social Fund loans
  • Hardship payments
  • Advance loan of benefits
  • Administrative penalties (a penalty you receive instead of being prosecuted to recover an overpayment)
  • Tax Credit overpayments
  • Housing Benefit overpayments
  • Fraud penalties
  • Benefit overpayments

Repaying a Universal Credit Advance loan

A Universal Credit Advance is a loan to help support you while you are waiting for your Universal Credit payments.

You will need to repay the Advance loan within the following timescales:

  • Repay within 24 months an Advance following a new claim or transferring from another benefit (Universal Credit may agree to extend this deadline by up to three months if you are struggling with money)
  • Repay within six months a Change of Circumstances Advance (Universal Credit may agree to extend this deadline by up to three months if you are struggling with money)
  • Repay within 12 months a Budgeting Advance (Universal Credit may agree to extend this deadline by six months if you are struggling with money)

The repayments taken out of your Universal Credit payments will be up to 25 percent of your Standard Allowance (the basic amount of Universal Credit you are entitled to before extra money for things like childcare and housing costs is added).

If you have more than one Advance loan to pay back, repayments will be taken from your Universal Credit payments in the order given. You can check the balance of any Advance you owe through your Universal Credit online account.

If a fraud penalty or sanction is applied to your Universal Credit payments, advance repayments will be stopped until the fraud penalty or sanction ends.  You will start to pay back the Advance loan once your fraud penalty or sanction has ended.

Repaying a Hardship payment

You may have got a hardship payment if your Universal Credit payments were reduced because you had a fraud penalty or sanction applied to them and you could not meet your and your family’s basic needs.

You will start to repay the hardship payment once your fraud penalty or sanction has ended.

If you are repaying a hardship payment and find you cannot afford the repayments, you should tell Universal Credit. If you have a Universal Credit Advance loan being deducted, a deferral will be considered.

You will then be able to speak to Debt Management to have an affordability discussion about your Recoverable Hardship payments and/or other benefit debts and Social Fund loans.

Your hardship repayments can be suspended for any assessment period where your earnings have reached a level at least equal to the Conditionality Earnings Threshold.

The conditionality earnings threshold is when your earnings have reached a level where you do not have to carry out any work-related activity (in other words, you are earning enough).  If you are part of a joint claim, this will be if you and your partner’s total earnings reach the conditionality earnings threshold for couples.

If your earnings, or in the case of a couple, your combined earnings stay at this level or above the threshold for at least six assessment periods (after the last fraud penalty or sanction was applied), Universal Credit may not ask you to repay the remaining hardship payment.

Fraud Penalty or a Sanction

If you deliberately do not provide details about a change in your circumstances that could affect your Universal Credit payments, or you give false information, this is fraud. A fraud penalty can be applied to your Universal Credit payments to reduce the amount you receive.

If you don’t do the things you agreed in your Universal Credit Commitment, your Universal Credit payments may be reduced for a set period. This is known as a sanction.

A fraud penalty or sanction will reduce your Universal Credit Standard Allowance (the basic amount of Universal Credit you are entitled to before extra money for things like childcare and housing costs is added). This can be up to 100 percent of your standard allowance if you are single, or up to 50 percent for each person in a joint claim.

If a fraud penalty or sanction is being taken from your Universal Credit payments, no other repayment or deduction will be taken, except for last resort deductions.

You will only pay one fraud penalty or one sanction at a time. If you are part of a joint claim, both of you can have a fraud penalty or sanction applied to your Universal Credit payments at the same time.

If both a fraud penalty and a sanction are applied to your Universal Credit payments, the fraud penalty will take priority and be paid off first.

You can find more useful information on Universal Credit Sanctions

Third Party Deduction

A third-party deduction is an amount that is taken from your Universal Credit payments and paid direct to the person or organisation you owe money to, such as your landlord or your gas or electricity supplier.

Third party deductions can also be taken, without your permission, for things like:

  • Housing costs (for example, rent arrears for your current address)
  • Unpaid rates
  • Child maintenance

Some deductions can be made for ongoing costs, not just overdue amounts.

Third party deductions are fixed at five percent of your Universal Credit Standard Allowance for each third party. This fixed amount cannot be changed.

  • No more than three third party deductions can be taken at any one time
  • Your online account will show when a third-party deduction will start

Last Resort Deduction

A Last Resort Deduction is a type of third-party deduction taken from your Universal Credit payments because you owe money for:

  • Rent
  • Service charges for a home you live in
  • Gas or electricity

Last resort deductions are made to help prevent you from being evicted or having your gas or electricity cut off.  This money will be paid directly to the third party that you owe money to.

Over-Payments

An over-payment is an amount which has been paid to you that you were not entitled to.

You will pay back any over-payments at a rate of up to 15 percent of your Standard Allowance (the basic amount of Universal Credit you are entitled to before extra money for things like childcare and housing costs is added).

If your household earnings are above a certain level, up to 25 percent can be taken from your Universal Credit payments. You can speak to your work coach at your local Jobs & Benefits office to find out more.

Over-Payments of Tax Credits

If you are getting tax credits and you claim Universal Credit, HM Revenue & Customs (HMRC) will be told to stop your tax credits. If you receive tax credits after you have made your claim to Universal Credit this could result in, you are being paid too much tax credits. Universal Credit will take action to get this money back as well as any other tax credit over-payments you have.

When you move to Universal Credit, HMRC will send you a letter called ‘Your Tax Credits over-payments’ (TC1131). This will tell you about any tax credit repayments that will be taken out of your Universal Credit payments. Different over-payments may be repaid from your Universal Credit payments at different times, and you may receive more than one letter.

If you claimed tax credits as a couple, the over-payments will be split equally between you and your partner.  If you want to find out how the over-payment has been worked out, contact HMRC.

Syed Qasim Abbas
Syed Qasim Abbas
Syed Qasim Abbas is Digital Marketing Expert by profession with 13+ years of proven experience. He is working full-time for a corporate sector and part-time for Dubai based company providing restaurants deals, brunches, pools etc. Syed loves to write about varies things and that's why he didn't cover any specific niche in this blog.

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