Confused about Universal Credit, the all-in-one benefit being rolled out by the government? The single monthly payment combines different benefits and tax credits into one sum. We have the facts you need to know.

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What is Universal Credit?

Universal Credit is a new all-in-one benefit being rolled out by the government. It's a single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that you might be getting now.

Universal Credit will replace:

• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Income Support
• Child Tax Credit
• Working Tax Credit
• Housing Benefit

If you are claiming one or more of these benefits, you will switch to Universal Credit by March 2022.

The aim of Universal Credit is that it can be claimed by those who are in OR out of work AND there's no limit on the amount of hours you can work per week either with Universal Credit – although your payment reduces gradually the more you earn – see below.

Universal Credit in the headlines: what's the latest?

UC has received a bad press because families moving over to this new benefit have had to wait six weeks to receive payment.

A government report in 2017 revealed nearly half of families said moving onto the benefit had led them to fall behind with rent for the first time.

However, as of April 2018, this should improve as there will be a two week transition period to help claimants adjust from getting their benefit paid fortnightly to monthly.

Work and Pensions Secretary, Esther McVey, announced that:

'We understand that moving onto Universal Credit can be a big change for those used to the previous benefits system - especially the monthly payment, designed to reflect the world of work.

'So this week, extra rent support is being made available to allow people to adjust from fortnightly Housing Benefit payments to monthly Universal Credit ones.'

Universal Credit: what's a taper rate?

The taper rate is the amount of money that gets deducted from your benefits when you earn over a certain amount.

It means that claimants will be able to hold on to an additional 2p for every pound they earn in employment, meaning those who progress in work will be able to keep more of their income.

From 11th April 2017, the Universal Credit ‘taper rate’ was lowered from 65% to 63%, making it more generous to recipients.

The work allowance is £192 a month, or £397 a month if you don't receive help with housing costs. (That's £2,304 or £4,764 a year).

Before April 2017 you lost 65p of benefit for every pound you earned OVER the work allowance.

The change meant you'd only lose 63p of benefit for every pound you earn.

The government explained that people will now 'keep more of every pound they earn.' The department of work and pensions (DWP) claims three million households will benefit by hundreds of pounds a year.

Treasury officials said a couple with two children where one parent earns £30,000 a year, would benefit by £425. A single parent with one child and no housing costs earning £15,000 a year will get £170 more.

When does Universal Credit start and who does it affect?

Universal Credit is already being introduced in stages. Most people won’t be affected to start with. At the moment, Universal Credit mainly affects newly unemployed people in specific areas of the country.

If you’re already claiming one or more of the benefits being phased out, you should carry on claiming as normal. You’ll be told when you need to do anything differently.

However, if your circumstances change, you may be asked to claim Universal Credit instead. Click on the links below to find out:

• Who is affected by Universal Credit
• Who is eligible to claim Universal Credit – go to GOV.UK Universal Credit website .

If you’re newly unemployed
If you’ve recently become unemployed you might be asked to claim Universal Credit, rather than Jobseeker’s Allowance.

In England, Scotland and Wales, Universal Credit is now available to single jobseekers in all Jobcentres. In some areas it is also available to couples and families, too.

In Northern Ireland, Universal Credit is being phased in gradually before December 2018.

What else you need to know about Universal Credit

Universal Credit payments

You may have to wait several weeks before your first payment.

Universal Credit is paid in the following ways:

• It will be paid monthly into a bank account of your choice.
• If you get help with your rent, this will be included in your monthly payment – you’ll then pay your landlord directly.
• If you live with your partner and you are both eligible, you will get one monthly joint payment.
• It can take several weeks after you make your claim to get your first payment.

Universal Credit and waiting days

If you make a new claim for Universal Credit you will not be paid for the first seven days. These days are known as 'waiting days'. However, you should not let this delay your claim and apply as soon as you are eligible to do so.

The seventh day after you make your claim then becomes the date each month that you’ll receive your Universal Credit payment, but you'll have to wait until the following month to receive payment.

However, you can apply for an advance payment loan to tide you over. This must be paid back and is worth a maximum of 50% of the value of the benefit. Call the the Universal Credit helpline on on 0345 600 0723, (lines open Monday to Friday, 8am to 6pm; and you can ask someone to call you back).

Working and claiming Universal Credit

There are no limits on how many hours a week you can work if you’re claiming Universal Credit. Instead, the amount you get will gradually reduce as you earn more, so you won’t lose all your benefits at once.

• Get an estimate of how much Universal Credit you’ll be entitled to using the calculator on the Policy in Practice website.
• Or use a benefits calculator on the GOV.UK website to estimate all your entitlements including Universal Credit.
• What happens to your Universal Credit when you start work or work more hours? Watch the video below from the Department for Work and Pensions (DWP) to find out.

How to get ready for Universal Credit

Even if you’re not likely to be affected straight away, there are some things you can do now to make sure you’re prepared for Universal Credit.

Did you know?

If you need help getting online your Jobcentre or local council can provide support. Find out where to get support on UK Online.

If you are eligible for Universal Credit, you are expected to make your claim online on the Apply for Universal Credit website.

You can find a list of the information you’ll need to provide on Making a Universal Credit claim.

If you and your partner are making a joint claim, only one of you will need to complete the online claim form, but that person will need to enter details for both of you.

For more details, visit the GOV.UK Your claim journey website.

Contact the Universal Credit Helpline

Ask for a callback: Make sure you ask the person on the Helpline to call you back so that you don’t have to pay for the call.

If you need help with your claim, you can contact the Universal Credit Helpline on 0800 328 5644 between 8am - 6pm, Monday to Friday (closed on bank and public holidays).