Universal credit is a new benefit system that is replacing many of the
current benefits and tax credits. It is for individuals and families of
working age whether they are in work or not working.
Universal credit is being introduced to simplify the benefits system. At the
moment there are separate benefits for different purposes, such as child tax
credits which help meet the costs of raising a child, and housing benefit to
help with the costs of rent. Universal credit is a single payment
intended to meet the different types of costs.
Compared with the current benefit system, universal credit is different in a number of ways.
The main changes for most people are:
- It is a single benefit payment
- It is paid monthly into a bank account
- You claim it online
- You have your own online account
- There are changes to who can get help with childcare costs
- If you're working and paying tax through the PAYE system your benefit is calculated on income figures your employer sends to HMRC
- You don’t have to tell the Department for Work and Pensions (DWP)
about every change in income
- Money for your rent is paid directly to you and not to your
landlord in most cases
- Some expenses for example childcare will need to be updated regularly on
your account (monthly).
What benefits are being replaced?
Universal credit will eventually replace the following benefits:
- Child tax credit
- Housing benefit
- Income-related employment and support allowance
- Income-based jobseeker’s allowance
- Income support
- Support for mortgage interest
- Working tax credit (including help with childcare costs).
Anyone under pension credit age who is claiming any of the benefits listed
above will be affected by the changes.
Other benefits including child benefit, contribution-based jobseeker's
allowance, carer’s allowance, maternity allowance and bereavement
benefits will not be affected by universal credit and will remain as separate
benefits. For a full break down of which benefits will be affected by
universal credit you can visit the
Universal credit is paid in one monthly instalment into a bank
account. If you don’t already have a bank account then you will need to
open one. The Money Advice Service has information on how to open a
bank account, and what you’ll need.
What support is there to help me budget my money?
We know that single parents take great care of their money, but you might
need a bit of help with budgeting to start. You might need this help if:
- You are moving to a monthly payment from weekly or fortnightly
- You are receiving less money under the new system than before
- You have less money because of other benefit changes
- The money towards your rent is being paid straight to you rather than
You can call the Universal Credit Helpline if you need help to make your
claim online. Your local council should also be providing support services,
but these will vary depending on where you live.
What to do now
There are things you can do now – if you’re not already doing
them – to help get prepared for universal credit. See the Gingerbread
getting ready for universal credit.
We will be updating this information on universal credit as and when the
details become available. Do check back from time to time for updates. We will
also alert you to new information in our membership newsletter, so if you
haven’t already become a member and subscribed to this why not do so now – it’s