Universal Credit (UC) is a conditional cash payment that is usually paid monthly to support those with low or no income with their living costs. To claim, individuals must live in the United Kingdom (UK), be aged 18 or over (though there are some exemptions if individuals are 16 or 17), be under State Pension age, and have less than £16,000 in money, savings and investments. In April 2024, UC increased by 6.7%, in line with the Consumer Prices Index for the year to September 2023.
- UC Advances are in place to help claimants. There are four types of Advances: New Claim Advance, Benefit Transfer Advance, Change of Circumstances Advance, and Budgeting Advance. These are repaid through monthly deductions from a claimant's award.
- Eligible UC claimants can be reimbursed up to 85% of their registered childcare costs each month up to the maximum amounts (caps), regardless of the number of hours they work.
- Alternative payment arrangements are available to support those who may/will struggle to manage a single monthly payment and are at risk of financial harm. They include split payments, more frequent payments and direct payments to landlords.
- Where it has been decided that customers have limited capability for work, they may be entitled to the award of an additional amount of benefit.
- The Disabled Child Addition is intended to provide extra support to low-income families with a disabled child.
- Carers on a low income who provide unpaid care for at least 35 hours per week for a severely disabled person can get an additional amount for carers as part of their Universal Credit award.
- Customers can receive an additional amount for each eligible child or qualifying young person for whom they are responsible. The two child policy limits child element to two children, although there may be further entitlement for other children if they were born before 6 April 2017 or an exception applies. Exceptions include adopted children, certain non-parental caring arrangements, additional children in a multiple birth or children conceived through non-consensual conception.
- Claimants with children and/or limited capability for work benefit from a work allowance. A work allowance is an amount of earnings a Universal Credit household can earn before the single taper rate of 55% is applied and their Universal Credit begins to be reduced.
- Students with disabilities or health conditions can claim UC whilst in full time education if they have been assessed as having limited capability to work before starting their course.
- Individuals aged 16 or 17 may be entitled to UC if they have a health condition or disability; care for someone who gets a health or disability benefit; are responsible for a child; live with their partner, have a responsibility for a child and their partner is eligible for UC; are pregnant and expecting the baby within 11 weeks; have had a baby in the last 15 weeks; or do not have parental support.
As of August 2024, there were around 7 million people on the UC. Of these 7 million people:
- 1,660,000: searching for work
- 890,000: working with requirements
- 2,750,000: no work requirements
- 1,260,000: working with no requirements
- 110,000: planning for work
- 370,000: preparing for work.
As of May 2024, 5.7 million households were on UC. Of these 5.7 million households:
- 2,700,000: single, no children
- 2,000,000: single, with children
- 200,000: couple, no children
- 800,000: couple, with children
2024/25 estimated cost of payment of benefit to customers: £66.98 billion
Central Government. Some aspects of UC are devolved in Scotland.
Data is collected and checked from existing DWP computerized systems used for registering and processing claims.
The Universal Credit Service is used to collect and process Universal Credit claims. Universal Credit: What Universal Credit is - GOV.UK
The Department collects and uses internal management information and regularly publishes official Universal Credit statistics, some of which are available on Stat-Xplore - Home (dwp.gov.uk)
Deposited paper DEP2024-0442 - Deposited papers - UK Parliament
Advice for decision making: staff guide - GOV.UK (www.gov.uk)
Universal Credit: Towards an effective poverty reduction strategy: the DWP’s own impact assessments found that Universal Credit will reduce poverty through increased entitlements for 3.1 million households, an increase in the take-up of benefits, and clear financial incentives that will encourage households to increase their income through work (DWP, 2011a; DWP, 2012a).
UC has provided a simplified and flexible System:
- Universal Credit replaced six separate benefits with one payment, reducing complexity and confusion for claimants.
- By consolidating multiple benefits, the system aimed to reduce administrative overhead and potential overlaps.
- UC adapts to fluctuating incomes, such as those of people in gig or part-time jobs.
- The implementation of a modern online application process has improved accessibility for many users, reducing the need for physical office visits.
- UC aligns with broader government objectives, such as reducing welfare dependency and encouraging self-reliance through employment.
- The rollout has provided insights into cross-departmental coordination, revealing the need for better integration of IT systems and communication.
Implementation Challenges:
- The rollout of UC and the staggered implementation created some confusion across regions.
- Initially the five-week waiting period for the first payment caused financial difficulties for claimants, leading to rent arrears and reliance on food banks.
- While advance payments were introduced to mitigate the waiting period, they must be repaid, building debt amongst vulnerable individuals.
- Digital exclusion has created barriers for elderly and digitally disconnected people, the move to a default online-only system has created challenges for claimants with limited digital literacy or access to technology.
Local Authorities, Welfare Rights organisations and disability organisations and charities have knowledge of UC and provide advice in the community. These include:
SDG 1 – No poverty
- Target 1.2 - By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.
- Indicator 1.2.1 - Proportion of population living below the national poverty line, by sex and age
- Indicator 1.2.2 - Proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
- Target 1.3 - Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.
- Indicator 1.3.1 - Proportion of population covered by social protection floors/systems, by sex, distinguishing children, unemployed persons, older persons, persons with disabilities, pregnant women, newborns, work-injury victims and the poor and the vulnerable.
SDG 2 - Zero hunger
- Target 2.1 - By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round.
- Indicator 2.1.1 – Prevalence of undernourishment
- Indicator 2.1.2 – Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)
SDG 1 – No poverty
- Target 1.2 – By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions.
- Indicator 1.2.1 – Proportion of population living below the national poverty line, by sex and age
- Indicator 1.2.2 – Proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
- Target 1.3 – Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.
- Indicator 1.3.1 – Proportion of population covered by social protection floors/systems, by sex, distinguishing children, unemployed persons, older persons, persons with disabilities, pregnant women, newborns, work-injury victims and the poor and the vulnerable.
SDG 2 – Zero hunger
- Target 2.1 – By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round.
- Indicator 2.1.1 – Prevalence of undernourishment
- Indicator 2.1.2 – Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)
Universal Credit (UC) is a conditional cash payment that is usually paid monthly to support those with low or no income with their living costs. To claim, individuals must live in the United Kingdom (UK), be aged 18 or over (though there are some exemptions if individuals are 16 or 17), be under State Pension age, and have less than £16,000 in money, savings and investments. In April 2024, UC increased by 6.7%, in line with the Consumer Prices Index for the year to September 2023.
- UC Advances are in place to help claimants. There are four types of Advances: New Claim Advance, Benefit Transfer Advance, Change of Circumstances Advance, and Budgeting Advance. These are repaid through monthly deductions from a claimant’s award.
- Eligible UC claimants can be reimbursed up to 85% of their registered childcare costs each month up to the maximum amounts (caps), regardless of the number of hours they work.
- Alternative payment arrangements are available to support those who may/will struggle to manage a single monthly payment and are at risk of financial harm. They include split payments, more frequent payments and direct payments to landlords.
- Where it has been decided that customers have limited capability for work, they may be entitled to the award of an additional amount of benefit.
- The Disabled Child Addition is intended to provide extra support to low-income families with a disabled child.
- Carers on a low income who provide unpaid care for at least 35 hours per week for a severely disabled person can get an additional amount for carers as part of their Universal Credit award.
- Customers can receive an additional amount for each eligible child or qualifying young person for whom they are responsible. The two child policy limits child element to two children, although there may be further entitlement for other children if they were born before 6 April 2017 or an exception applies. Exceptions include adopted children, certain non-parental caring arrangements, additional children in a multiple birth or children conceived through non-consensual conception.
- Claimants with children and/or limited capability for work benefit from a work allowance. A work allowance is an amount of earnings a Universal Credit household can earn before the single taper rate of 55% is applied and their Universal Credit begins to be reduced.
- Students with disabilities or health conditions can claim UC whilst in full time education if they have been assessed as having limited capability to work before starting their course.
- Individuals aged 16 or 17 may be entitled to UC if they have a health condition or disability; care for someone who gets a health or disability benefit; are responsible for a child; live with their partner, have a responsibility for a child and their partner is eligible for UC; are pregnant and expecting the baby within 11 weeks; have had a baby in the last 15 weeks; or do not have parental support.
UC has provided a simplified and flexible System:
- Universal Credit replaced six separate benefits with one payment, reducing complexity and confusion for claimants.
- By consolidating multiple benefits, the system aimed to reduce administrative overhead and potential overlaps.
- UC adapts to fluctuating incomes, such as those of people in gig or part-time jobs.
- The implementation of a modern online application process has improved accessibility for many users, reducing the need for physical office visits.
- UC aligns with broader government objectives, such as reducing welfare dependency and encouraging self-reliance through employment.
- The rollout has provided insights into cross-departmental coordination, revealing the need for better integration of IT systems and communication.
Implementation Challenges:
- The rollout of UC and the staggered implementation created some confusion across regions.
- Initially the five-week waiting period for the first payment caused financial difficulties for claimants, leading to rent arrears and reliance on food banks.
- While advance payments were introduced to mitigate the waiting period, they must be repaid, building debt amongst vulnerable individuals.
- Digital exclusion has created barriers for elderly and digitally disconnected people, the move to a default online-only system has created challenges for claimants with limited digital literacy or access to technology.
Disability benefits
Local Authorities, Welfare Rights organisations and disability organisations and charities have knowledge of UC and provide advice in the community. These include:
Central Government. Some aspects of UC are devolved in Scotland.
As of August 2024, there were around 7 million people on the UC. Of these 7 million people:
- 1,660,000: searching for work
- 890,000: working with requirements
- 2,750,000: no work requirements
- 1,260,000: working with no requirements
- 110,000: planning for work
- 370,000: preparing for work.
As of May 2024, 5.7 million households were on UC. Of these 5.7 million households:
- 2,700,000: single, no children
- 2,000,000: single, with children
- 200,000: couple, no children
- 800,000: couple, with children
2024/25 estimated cost of payment of benefit to customers: £66.98 billion
Data is collected and checked from existing DWP computerized systems used for registering and processing claims.
The Universal Credit Service is used to collect and process Universal Credit claims. Universal Credit: What Universal Credit is – GOV.UK
The Department collects and uses internal management information and regularly publishes official Universal Credit statistics, some of which are available on Stat-Xplore – Home (dwp.gov.uk)
Deposited paper DEP2024-0442 – Deposited papers – UK Parliament
Advice for decision making: staff guide – GOV.UK (www.gov.uk)