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Universal credit

What is universal credit?

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.

Why is it being introduced?

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.

What's changing?

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 and maternity allowance will not be affected by universal credit. This is because they will remain as separate benefits. For a full break down of which benefits will be affected by universal credit you can visit the Turn2Us website.

How is universal credit claimed?

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 payments
    • 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 your landlord.

What support will be available?

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 guide to getting ready for universal credit.

Further information

Find out when universal credit will be introduced

Frequently asked questions

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 completely free!

Information from the Department for Work and Pensions is available at