Universal Credit (UC) is a new benefit that will be paid monthly. It will replace all of the following benefits.

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1 Universal Credit Universal Credit (UC) is a new benefit for people of working age. You can get it if you have a low income or do not work. Some people started getting it in April In this factsheet, you can find out what benefits are being replaced by UC, who can get it and how much you could get. Universal Credit (UC) is a benefit for people aged between 18 and 65 years old. Some people aged will also be able to claim. UC is replacing 6 benefits including income-related Employment & Support Allowance, income-based Job Seekers Allowance, Income Support, Tax Credits and Housing Benefit. You can claim UC if you are in or out of work. Earnings and savings will lower the amount of UC you can get. You will get one monthly payment instead of a number of different payments. Most people who claim UC must agree to do certain things. This is called a claimant commitment. If you do not follow the rules in your claimant commitment, you could lose some of your benefit. 1

2 This factsheet covers: 1. What is Universal Credit (UC)? 2. How much can I get? 3. What if I am working or studying? 4. What if I care for someone or have children? 5. What about my housing costs? 6. How will income, savings and property affect my UC? 7. How much could I get? 8. How do I claim? 9. How will I be paid? 10. What is the claimant commitment? 11. Can I appeal if I disagree with a decision? 12. When will I have to claim? 1. What is Universal Credit? Universal Credit (UC) is a new benefit that will be paid monthly. It will replace all of the following benefits. Housing Benefit Income Support Income-based Job Seekers Allowance Income related Employment & Support Allowance Child Tax Credit Working Tax Credit Budgeting Loans You can get UC if you have little or no income and a small amount of savings and capital. Who can claim? When Universal Credit (UC) comes in fully, you will be able to claim if you are: a single person, a couple, a parent, disabled or too unwell to work, a carer, looking for work, or in low paid work, including being self-employed.

3 At the moment, Universal Credit is available in certain parts of the country. The rules will depend on where you live. Please call or us if you are thinking about claiming Universal credit but are not sure if you can. Rethink Mental Illness Advice Service Telephone: Address: PO Box 17106, Birmingham, B9 9LL You can also find out if your Jobcentre is taking Universal Credit applications by going to the following link: Basic conditions of entitlement There are 3 conditions you need to meet to get Universal Credit (UC), which are explained below. Be an adult of working age. 1 You usually need to be 18 or over and below Pension Credit age to get UC. Sometimes you can claim UC if you are aged 16 or 17, you need to speak to a welfare adviser if you want to find out more. You can get UC if you are over Pension Credit age if your partner is younger than you are. 2 Your Pension Credit age depends on when you were born. You can check what your pension credit age is by using this online calculator: Be a habitually resident in the UK This means you must have the right to live in the UK and plan to stay. If you or your partner does not live in the UK on a full time basis, you will get a lower rate of UC. 3 Be on a low income and have low savings and capital UC is a means-tested benefit. This means that any savings, capital and income you have will affect how much you will get paid. You will only get UC if you have a small amount of savings and capital, and have a low income or no income at all. You can find out more about this in section 6 of the factsheet. You cannot get universal credit if you are a: 4 member of a religious order, prisoner, person serving a prison sentence in a psychiatrist hospital on a section 45A or 47 of the Mental Health Act

4 2. How much can I get? There are different elements of Universal Credit (UC). These elements will make up one monthly payment. This means you will not get different payments from the following benefits. Housing Benefit Employment and Support Allowance Tax Credits Each Universal Credit element has an assessment period. The assessment period is one month. At the end of each assessment period the DWP calculate your Universal Credit for that month. 6 In the next section we explain what the elements are. Standard allowance The standard allowance is the basic amount of benefit you will get. If you under 25 year old, you will get less than this. Any other elements are added on top of this amount. 7 Single person over Single person under Couple (at least 1over 25) Couple (both under 25) Limited capability for work element (LCW) 8 The LCW is for people who are too unwell to work at the time of assessment. You will have to do work training and work related activities to help prepare you for work. The government have made changes to limited capability for work element (LCW). From April 2017, you will not get an extra payment for getting the LCW element. Payments will continue at the rate as the standard allowance. 9

5 Limited capability for work and work-related activity element (LCWRA) 10 The LCWRA is for anyone who are too unwell for work and do not have to do work-related activities Most people will not get the LCW and LCWRA elements until the 3- monthly assessment phase have ended. 11 If you have a terminal illness, you will get the LWCRA element at the start of your UC application. 12 Carer element 13 The carer element is for people who provide a lot of care all the time for someone with a disability You can get the carer element for Universal Credit if you get carers allowance or not. 14 You cannot get the carer element if you are a professional carer and get paid a salary. Child element 15 You can get the child element if you have children. The child element has two rates: First child Other children a higher rate for the child, and a lower rate for any other children. For children born after 6 April 2017, the higher rate will not be available anymore. 16 You will get the lower rate for 2 children in your family. You may also only get the child element for a maximum of 2 children. But there might be some exceptions to this. 17 Disabled child addition 18 There are two rates for disabled child addition. A child can get one rate only. The rate will depend on their DLA or PIP claim. They can get this addition if they child gets: or DLA (high rate care) or PIP (enhanced daily living), or Any other rate of DLA (low or middle rate care) or PIP (standard daily living). Child care costs element 19 People who work and have to pay for childcare may be able to get the 70% of child care costs up to: for one child, or for 2 children or more. Housing costs element 20 The housing costs element is for people who are responsible for the rent or mortgage payments of their home. Universal credit will replace Housing Benefit for people who pay rent. It replaces the Support for Mortgage Interest scheme for people with mortgages. People who pay service

6 charges for repairs to public areas in housing association or council house will get help from universal credit. The amount you can get will depend on area that you live in, the size of your household and standard interest rates. You cannot get universal credit if you are in supported exempt accommodation. Support exempt accommodation is a resettlement accommodation you get from a local authority, housing association, registered charity or voluntary organisation. You get care, support and supervision in this accommodation What if I am working or studying? Work You can still claim Universal Credit (UC) if you work. But how much you earn may reduce the amount of UC you get. You may pay tax using Pay As You Earn (PAYE). In this case Her Majesty s Revenue and Customs (HMRC) will tell the Department for Work and Pensions (DWP) how much you earn. If you are self-employed, you must tell the DWP how much you earn every month. You may earn different amounts every week or month. The DWP will assess your income by saying you will earn at least a certain amount every month. This is called the minimum income floor. 22 Your minimum income floor is based on national minimum wage based on a 35 hour week. Based on this you will have a weekly minimum floor income of: if you are aged 21 and over, if you are 18-20, or if you are under 18. If you are setting up a new business the DWP will use your actual earnings in the first 12 months. They will do this to help you increase your income. Studying You cannot usually claim UC if you are a full-time student studying for: a degree, a postgraduate degree, a diploma of higher education, a higher national diploma, and any other qualification which is above advanced GNVQ or A level standard. You can claim UC when you are studying if: you have a child, or

7 you get Disability Living Allowance or Personal Independence Payment at any rate for any component, and have limited capability for work. If you are studying part-time and meet the conditions that are set out in your claimant commitment you can claim UC. 4. What if I care for someone or have children? Caring You can get the carer element of UC if you care for someone who needs a lot of support. You must care for them for 35 hours or more a week. The person you care for must also be getting: 23 Attendance Allowance, Personal Independence Payment, standard or enhanced daily living component, or Disability Living Allowance, high or middle rate care component. Carer element If someone has more than one carer, only one of them can get the carer element. They can get up to a month. If you are a couple and both of you care for two or more different people you could both get an additional carer element. You cannot get the carer element, LCW and LCWRA elements at the same time. If are entitled to both, you will get whichever is more. What if I have children? You can get more UC for each child younger than 16 that you look after. This is called the child element. 24 Child element is paid for children under 20. They must be studying at least 12 hours a week. They cannot be studying at degree level or higher. They are called qualifying young people. Every month you can get: for you first child or qualifying young person, or for any other child or qualifying young person. Disabled children You can get money for each disabled child or qualifying young person you are responsible for. This is called the disabled child element. 25 You will get each month if a child is entitled to: high rate care component of Disability Living Allowance. or the enhanced daily living component of Personal Independence Payment.

8 You will also get this amount if you care for a blind child. If you get any other rate of Disability Living Allowance or Personal Independence Payment for the child, you will get each month. Childcare costs If you are in paid work, you may be able to get help with up to 70% of your child care costs. Below are the maximum amounts you would get. One child up to each month Two or more children up to each month There are some rules around getting this element. 26 The childcare costs must be for a child under 16 years old, or before 1 st September following their 16 th birthday. The childcare must help you to start working or stay working. You must have a paid job or be about to start a paid job before the start of the next UC assessment period. If you are a couple, your partner must also be: o in paid work or have a limited capability for work, or o be a full time carer or be away from your home for a short time. You will only get help with childcare from a registered childminder, school or local authority on school premises out of school hours. You cannot claim this element to pay family or friends to mind your child unless they are registered. You must tell the DWP how much your childcare costs are every month. 5. What about my housing costs? Renting If you rent a house or flat, you may get the housing costs element to help with the rent and other costs. If you rent from the council or a housing association If you don t earn any other money apart from benefits, you can get help with your rent. Universal Credit (UC) will usually cover the whole of your rent if you live in social housing. Social housing is council or housing association property. But you may have to pay towards your rent if: 27 you have other income or savings, the local authority thinks you have more bedrooms than you need, part of your rent pays for bills or services, such as electricity, meals or laundry services, or

9 you have an adult child, friend or relative living with you. They will need to pay towards the rent. Your housing costs element will be reduced by per month for each non-dependent adult that lives with you. 28 This will not apply if the person that lives with you: 29 is under 21 years old, is under 25, claiming UC and who has no earned income, 30 gets pension credit, could, or does, get the middle or high rate care component of Disability Living Allowance, could, or does, get the daily living component of Personal Independence Payment, could, or does, get Attendance Allowance, gets Carer s Allowance, or is responsible for a child under 5 years old. Under-occupancy charge You will not get all of your rent paid if you have more bedrooms in your property than the government thinks that you need. This only applies to council or housing association properties. This has been called the 'bedroom tax' by some people. 31 Below is a list of the rules about bedroom tax. All adults and couples need their own bedroom. Boys under 16 should share a room. Girls under 16 should share a room. Boys and girls under 10 should share a room. Although if one of your children is disabled and your children need their own room this is possible. 32 If you have more bedrooms than these rules say you need, then you are under-occupying the property. From 1 st April 2017 you are allowed 1 extra bedroom if you, your partner, or your child are disabled and need a carer to stay over and provide overnight care. 33 You do not have to claim any particular benefits to get this. But you must show evidence that you need the extra room for a carer. The carer must also stay over regularly. From 1 st April 2017 you are also allowed 1 extra bedroom if you cannot share a room with your partner because one of you has a disability. 34, To get this one of you must be claiming: Attendance allowance at the higher rate, the care component of disability living allowance at the middle or higher rate, or the daily living component of Personal Independence Payment, or Armed Forces Independence Payment.

10 You also have to prove that you cannot share a room to the local authority. If you still have more bedrooms than the rules say you need, the DWP says you are under-occupying. If this happens, you will get less housing costs element. How much less you get will depend on how many extra rooms you have: 14% less if you have 1 spare bedroom, or 25% less if you have 2 or more spare bedrooms. Renting from a private landlord If you rent from a private landlord, you will get a different amount of housing cost element. How much you get will depend on where you live, how many people you live with and how big the property is. If you are single and under 35 you will only get enough to rent a room in a shared house. You will be able to get more help if you get: 35,36 the care component of Disability Living Allowance (DLA) at the middle or highest rate, Attendance Allowance, the daily living component of Personal Independence Payment (PIP), any rate, or regular overnight care from a carer who needs their own room year olds and housing costs From 1 April 2017 you may not be able to get the housing costs element of UC if you are aged and single. There are some exceptions to this rule. 37 You can call or our advice service if you would like more advice on this. What if I have a mortgage? If you live in a house or flat with a mortgage and are not earning any money you may be able to get help with your mortgage. UC will help with the interest part of a mortgage up to the value of 200,000, for the loan. 38 It will not help pay back the amount you borrowed. The amount you get is based on the Bank of England s standard interest rate. You can find out how much the rate is at any time by checking the Support for Mortgage Interest webpage at: You will have to wait 9 months from the time you claim until you get your first payment. You will not get any help with your mortgage during this period If you have a repayment mortgage, you may have to find another way to top up the mortgage payments. You can ask your lender to switch to an interest-only mortgage.

11 What if I live in supported housing? You may live in supported housing. This is when you get care and support as part of your housing. Different organisations can arrange this including: the council, a housing association, a registered charity, or voluntary organisation. If you live in supported accommodation you will need to claim housing benefit. You will not get your housing costs paid through Universal Credit. The rules around supported housing and supported 'exempt' accommodation are complicated. If you need advice on supported 'exempt' accommodation, you can contact a specialist housing advisor. 6. How will income, savings and property affect my UC? What if I have savings or capital? Capital means how much your assets, shares or investments are worth. The DWP will not count your home and business as assets. Savings means money you have in your bank, building society or post office accounts, cash and ISAs. How much your capital and savings are worth may affect the amount of Universal Credit you get. We have set out the rules in a chart on the next page.

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14 What if I get some money from working? You will get less UC if you earn some money from: 39 being employed, working for someone else, being self-employed, working for yourself, or get statutory sick pay, maternity or paternity pay and adoption pay. You can earn some money without it affecting how much UC you get every month. This is the work allowance. For every 1 you earn above the work allowance, you will get 65p less UC until 9 April From 10 April 2017 for every 1 you earn above the work allowance you will get 63p less UC. 41 What your work allowance will be will depend on whether or not you get help with housing costs. If you get help with housing costs the work allowance is 397. If you do not get help with housing costs it is What if I get other benefits? Disability Living Allowance and Personal Independence Payment do not affect your UC. But the following benefits will be taken off your UC. Contribution-based Jobseekers Allowance Contribution-based Employment & Support Allowance Carer s Allowance Bereavement and widow s payments Maternity Allowance Industrial Injuries Benefit Money from an ex-husband or wife 7. How much could I get? There is a benefit cap which is the most money you can get from the following benefits. 43 Universal Credit Job Seekers Allowance Employment and Support Allowance Child benefit Carer s allowance Maternity allowance Bereavement and widow s allowance Below is the most money you will get every month. If you are single, able to work or do work related activity, earn less than 430 each month and live outside London If you are single, able to work or do work related activity, earn less than 430 each month and live in London If you are a couple, both able to work or do work related activity, earn less than 430 each month and live outside London 1, , ,666.67

15 If you are a couple, both able to work or do work related activity, earn less than 430 each month and live in London If you earn 430 or more each month If you or your partner cannot do work or work related activity If you, your partner or your child gets DLA or PIP 1, No limit No limit No limit How much Universal Credit will I get? You work out how much UC you will get you need to follow the steps below. Step 1: Add up all the different parts of UC you should get. Step 2: Work out how much your UC will reduce because of savings or capital. Step 3: Check the amount is not above the benefit cap. Will I get less money on UC? If your UC is less than what you were getting before, you will get extra money to make up the difference. This extra money is called transitional protection. 44 If you get this payment, you will not get the yearly increase in your benefit, This is called up-rating. You may get it again when you have spent the transitional protection. You will lose this extra money if you stop claiming UC, or if: your partner leaves the household, you start to earn more, or you start to get more UC, for example if you have a child. 8. How do I claim? You will need to claim UC online. If you can t get online you might be able to claim by phone. You cannot claim by post. Go to this link below to claim online: If you need help claiming UC online, call the UC helpline: Telephone: Textphone: How will I get my UC payments? The DWP will pay your Universal Credit (UC) into your bank account once a month. If you claim as a couple, you can choose which of your accounts to get the money in. You may have a joint account and you can get the money paid into here.

16 If you are struggling with monthly payments, you might be able to get your UC weekly or fortnightly which is personal budgeting support. You can find more information about this in the Personal Budgeting Support Guidance: ata/file/181400/personal-budgeting-support-guidance.pdf. 10. What is the claimant commitment? You may be able to look for, or prepare for work. In this situation, the Department for Work and Pensions (DWP) will expect you to do this to claim Universal Credit (UC). If you have a part-time job, you may have to look for more work. If you are in a low paid job, you may have to look for a higher paid one. If you claim UC and are looking for work you must agree to a list of conditions called a claimant commitment. This will explain what: you have to do to prepare for, or look for, work will happen if you don t do these things, and information the DWP needs you to give. Depending on your situation, you might have to: show that you are looking for full-time work, and take some steps to prepare for work if you are too unwell to work. You will have to go to work focused interviews. If you are so unwell that the DWP does not think you should go this must be a condition of your benefits claim. These are meetings with an adviser. You will talk about the type of work you can do and what problems you would have in work. You will work out how to deal with these problems. What if I have to look for work? If you have to look for work, you will have to be available to start work immediately unless you have a good reason you can t. This is the work availability requirement. The work search requirement is when the DWP will expect you to spend time looking for or preparing for work. Your claimant commitment should say what meetings you have to go to and how long you have to spend looking for work. If you need the commitment changed, speak to a personal adviser at Jobcentre Plus. What if I don t follow the rules in my claimant commitment? If you don t follow the rules you could lose some of your benefit, this is called a sanction. There are four levels of sanction the DWP can apply depending on what happens. If your UC is sanctioned at the lowest level, you will lose 40% of your standard allowance. This will continue until you start doing what the Jobcentre asked you to do or they say you don t have to.

17 If you are claiming as a couple, you will lose 40% of the couple s allowance if one partner is sanctioned. You will lose 80% if both of you are sanctioned. Hardship payments If the DWP sanction your benefit you may be able to apply for help through a hardship payment. The DWP must pay you some money if you: cannot pay for important things like rent, heating, food and hygiene, have tried to spend less and get other kinds of support, or have met all work related requirements in the previous 7 days. You will have to apply for a hardship payment every month if you need it. You will have to pay it back. You will pay it back using 15% of how much UC you get. 11. Can I appeal if I disagree with a decision? You can ask the Department for Work and Pensions to look at their decision again. This is called a mandatory reconsideration. You have 1 month from the date of the decision to ask for this. You have to go through this process before you can appeal. You can appeal against most Universal Credit (UC) decisions. There are some things you cannot appeal against including the benefit cap and having to pay back overpayments. Any appeal goes to an independent tribunal to look again at the facts. You can find more information in our Appealing Benefits Decisions factsheet on Or call and ask for a copy to be sent to you. 12. When will I have to claim? Universal Credit (UC) is available in different parts of the country now but will be available everywhere. At first, it will only be available to certain people in particular areas. You will be able to claim UC if your Jobcentre is taking claims for UC. From April 2015, more Jobcentres are taking UC claims. Please see the following link for a list of jobcentres that accept claims for UC. These are listed alphabetically Everyone will be able to claim UC eventually but now you have to claim UC if you: are single, don t live with a child,

18 are able to look for work, are making a new claim for benefits, and your claim is processed by a Jobcentre that accepts UC claims. Sometimes you can transfer to UC if you are claiming other benefits even if you are not single or a job seeker. Please get advice from a welfare benefits specialist before you do this because you may get less benefit under UC. If you apply for benefits and you meet the criteria for UC you may have to claim this benefit. At the time we wrote this factsheet you cannot claim UC if you are too unwell to work. If you are not well enough to work, you need to apply for Employment and Support Allowance. You can find more about Employment and Support Allowance at Or call and ask for a copy to be sent to you. If you do not live in one of the areas where UC is available your benefits won t change. The DWP are rolling out Universal Credit in stages. It is expected that the roll out of Universal Credit will completed by From 1 st October 2013 the Claimant Commitment has been rolled out all over the country. It applies to people who claim benefits, even if they do not receive Universal Credit. 1 s4 (1). Welfare Reform Act 2012 c.5. 2 Reg 3(2)(a) The Universal Credit Regulations SI 2013/376 London: TSO: As note 2 (SI 2013/376), Reg 3(3)(b). 4 As note 2 (SI 2013/376), Reg 19(1). 5 As note 2 (SI 2013/376), Reg 19(4)(a). 6 As note 2 (SI 2013/376), Reg As note 2 (SI 2013/376), Reg As note 2 (SI 2013/376), Reg 27(1)(a). 9 s12(2)(a) Welfare Reform and Work Act As note 2 (SI 2013/376), Reg 27(1)(b). 11 As note 2 (SI 2013/376), Reg 28(2). 12 As note 2 (SI 2013/376), Reg 28(5)(a). 13 As note 2 (SI 2013/376), Reg As note 2 (SI 2013/376), Reg As note 2 (SI 2013/376), Reg As note 12 (MRWA), s 13 & s As note 12 (MRWA), s As note 2 (SI 2013/376), Reg As note 2 (SI 2013/376), Reg s5 (WRA 2012). 21 The Housing Benefit and Council Tax Benefit (Consequential Provisions) Regulations 2006 SI No.217 para 4, sch As note 2 (SI 2013/376), Reg As note 2 (SI 2013/376), Reg 30 (1). 24 As note 2 (SI 2013/376), Reg 24 (1). 25 As note 2 (SI 2013/376), Reg 24 (2). 26 As note 2 (SI 2013/376), Reg 33.

19 27 As note 2 (SI 2013/376),Sch As note 2 (SI 2013/376), Sch As note 2 (SI 2013/376), Sch 4(16)(2). 30 Department of Work and Pensions. Housing Benefit and Council Tax Benefit Circular. HB/CTB A8/ [Accessed July 2016] 31 House of Commons Library. Under-occupying social housing: Housing Benefit entitlement Number [Accessed June 2016] 32 Burnip, Trengove and Gorry v Secretary of State for Work and Pensions [2012] EWCA Civ Reg 6(a) The Housing Benefit and Universal Credit (Size Criteria) (Miscellaneous Amendments) Regulations SI 2017/213. London: TSO; As note 33 (SI 2017/213), Reg 6(e) 35 As note 2 (SI 2013/376), Sch 4 (15)(2). 36 As note 2 (SI 2013/376), Reg 4(12). 37 As note 37 (SI 2017/252), Reg 2(3)(c). 38 House of Commons Library. Support for Mortgage Interest scheme. SN [Accessed July 2016] 39 As note 2 (SI 2013/376), Reg 22(1)(a). 40 As note 2 (SI 2013/376), Reg 22(1)(b). 41 Reg 2(2) The Universal Credit (Reduction of the Earnings Taper Rate) Amendment Regulations SI 2017/348 London: TSO: Department for Work and Pensions. Work allowance for Universal Credit. edit.htm [accessed November 2016] 43 As note 18 s96 44 Universal Credit Policy Briefing Note Transitional Protection and Universal Credit

20 Rethink Mental Illness 2014 Last updated March 2017 Next update July 2017 Version: 3.1 This factsheet is available in large print. Last updated 01/10/2010