Universal Credit

Universal Credit is a new benefit for people of working age which is being introduced in stages across the country.

It will eventually replace:

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

Universal Credit has now been introduced across the country for new claimants of working age instead of the benefits below (depending on your circumstances). 

You can claim Universal Credit online at gov.uk or contact the Universal Credit helpline on 0800 328 9344 if you need help making your claim.

See our Universal Credit page for further information.

Income Support

Income Support is a means-tested benefit paid to certain groups of people who do not have enough money to live on.

Income Support is a non-contributory benefit. This means that it does not depend on National Insurance contributions you have paid.  If you get Income Support you will also be entitled to Housing Benefit, and other help, for example, with your council tax, health costs and free school meals. If you have a mortgage, you may be eligible for help towards your interest payments in the form of a loan. 

If you are over pension age, you will not be able to claim Income Support but can claim Pension Credit instead.

To get Income Support, you must either not be working at all or work less than 16 hours a week. If you have a partner who lives with you, they must work under 24 hours a week. You can qualify for Income Support if you are bringing up a child aged under 5 (or a foster child aged under 16) on your own, or receiving Carer’s Allowance.  There are other categories of people who do not have to be available for work and may be able to claim Income Support if their income is very low. You can contact our advice service to find out whether you might be able to claim.

To claim Income Support phone 0800 055 6688 or download a form at gov.uk.

Income Support is gradually being phased out, to be replaced by Universal Credit. At present, whether you claim Income Support or Universal Credit depends on your circumstances. 

Jobseekers Allowance (JSA)

JSA is a benefit for people who are unemployed but capable of work or who are working less than 16 hours a week. To get JSA you must show that you are looking for work.

JSA is a benefit in two parts.  If you have paid enough National Insurance contributions in the past, you could qualify for contribution-based JSA.  This is paid at a flat rate for the first six months you are unemployed and can be paid even if your partner is working or you have savings .

Income-based JSA can be paid to top up any contribution-based JSA or on its own.  It is means-tested and the amount you get will depend on your financial circumstances.  If you have a mortgage, you may be eligible for help towards your interest payments in the form of a loan.

If you are living with a partner and claiming income-based JSA, your partner must either not be working or working less than 24 hours a week.

For information about how to make a claim for JSA, see gov.uk.

Jobseekers Allowance is gradually being phased out, to be replaced by Universal Credit. At present, whether you claim Jobseekers Allowance or Universal Credit depends on your circumstances. 

Working Tax Credit

If you are single and work at least 16 hours a week, you may be entitled to Working Tax Credit.  If you have a partner, you must work at least 24 hours a week between you (with some exceptions).

Entitlement to Working Tax Credit depends on your circumstances and how much money you have coming in. Self-employed people as well as people who are employees can apply.  Working Tax Credit can include extra amounts for disabled workers and people who work more than 30 hours a week.  It can also help towards childcare costs, for example for a registered  childminder, after school club or nursery.

If you are a foster carer, you can be treated as self-employed and you may be able to get Working Tax Credit. Your foster allowance will not be treated as income unless it is above certain limits.  Some foster carers can choose whether to claim Income Support or Working Tax Credit. Contact our advice service if you think this might apply to you.

You can check whether you qualify for Working Tax Credit here.

You can order a claim form online here or by calling the tax credits helpline on 0345 300 3900.

Working Tax Credit is gradually being phased out, to be replaced by Universal Credit. At present, whether you claim Working Tax Credit or Universal Credit depends on your circumstances. 

Housing Benefit

This benefit helps people on a low income to pay their rent. You may be able to get Housing Benefit even if you are working. The amount of help you get depends on your income and savings and your family circumstances.

Housing Benefit will be worked out differently once you’ve reached the age at which you qualify for Pension Credit so you may become entitled to Housing Benefit even if you weren’t before.

Housing Benefit is a local authority benefit which means you need to contact your local council for a claim form.

Private sector tenants
If you have a private landlord, your Housing Benefit will normally be based on the Local Housing Allowance. The Local Housing Allowance is based on rent prices for the area you live in and limits the maximum amount of help you can get. The amount you get also depends on the number of rooms the Housing Benefit rules say are needed for your household. This may not be the same as the number of rooms you are actually living in.

If you’re thinking of moving into private rented accommodation, you can ask the local authority’s Housing Benefit office to tell you which Local Housing Allowance figure will be used to calculate your Housing Benefit or you can check here.

Council and housing association tenants
If you are of working age, your Housing Benefit may be cut if your home is considered to be larger than you need. This is known as ‘the bedroom tax’.

Your Housing Benefit will be cut by 14% of your rent if you have one spare bedroom and by 25% of your rent if you have two or more spare bedrooms. You can check here whether your home will be considered too large for you.

In certain circumstances you will be allowed a spare bedroom. For example:

  • If an adult or child has a disability and an extra bedroom is used by a carer coming into your home to provide overnight care.
  • If you have a disabled child who receives the DLA care component at the middle or highest rate and who is unable to share a bedroom due to disability.
  • If you are unable to share a bedroom with your partner due to disability and at least one of you is in receipt of a relevant disability benefit.

Click here for more information about exemptions to the bedroom tax.

Benefit Cap

The benefit cap sets a limit on the total amount in benefits that most working-age people can claim. The cap applies to the benefits you get as a household. If you are affected your Housing Benefit is cut so that the total amount you receive in benefits isn’t above the cap level.

The benefit cap for couples and lone parents is currently set at £442 a week in London and £384 in the rest of the country (£296/£257 for single people). You can check here which benefits are included in the cap.

In most cases the cap will not apply if you or your partner have reached the qualifying age for Pension Credit or if you work enough hours to qualify for Working Tax Credit (even if you don’t claim it). You will also be exempt if you or anyone else in your household receives:

  • Disability Living Allowance
  • Attendance Allowance
  • Personal Independence Payment
  • Employment and Support Allowance – support component
  • Carer’s Allowance
  • Guardian’s Allowance
  • Industrial Injuries Benefit
  • War Widow’s/Widower’s Pension

If you’ve been employed for at least 50 weeks and you lose your job through no fault of your own, the cap will not apply to you for 39 weeks.

There is an online calculator at gov.uk where you can check if the Benefit Cap applies to you.

Shortfalls of Housing Benefit

If the amount of Housing Benefit you are entitled to doesn’t cover all your rent, you may have to make up the difference out of any other income you have, or find cheaper accommodation. Your other options could include applying to the council for a Discretionary Housing Payment to cover the shortfall, or negotiating a cheaper rent with your landlord.

If you’re affected by the benefit cap it’s worth checking whether anybody in your household can get one of the benefits that means the cap won’t apply to you.

You may also wish to consider contacting your council’s children’s services department, especially if you are looking after a disabled child or a child whose health or development is likely to be damaged because of the reduction in your benefit. They may be able to help with a cash payment or other assistance.

For more information about the options available to you if your Housing Benefit doesn’t cover all your rent, visit the Shelter website or contact our advice service.

Housing Benefit is gradually being phased out, to be replaced by Universal Credit. At present, whether you claim Housing Benefit or Universal Credit depends on your circumstances. The bedroom tax and benefit cap apply to Universal Credit as well as to Housing Benefit.

Council Tax Reduction

If you’re on a low income, you may be entitled to some help towards paying your Council Tax. This is known as Council Tax Reduction  or Council Tax Support.

Each local authority has devised its own support scheme so entitlement to support may vary depending on where you live. However, pensioners are protected from cuts to support.

Many councils have also set up a hardship fund providing discretionary payments to people facing difficulties paying their Council Tax.

You should contact your local council for details of the Council Tax Reduction scheme in your area.

The Social Fund

If you're on a low income, the Social Fund may be able to help you with certain one-off or occasional expenses.

Budgeting loans can be paid to people living on means-tested benefits, to help with essential lump sum expenses. These include costs of moving home or buying household equipment, furniture and clothing.  Budgeting loans have to be paid back to  the Social Fund, but they are interest-free.  You won’t necessarily get a budgeting loan just because you are eligible to apply.  The decision will be made following a review of your circumstances.

You can find more information and apply for a budgeting loan online at gov.uk. Alternatively, you can complete form SF500, which is available from local benefit offices.

For people in receipt of Universal Credit, budgeting loans have been replaced by budgeting advances.

There are other types of Social Fund payments including funeral payments and maternity grants. For more information about the Social Fund, contact our advice service.

Note that your local council may be able to provide you with help if you are in urgent need through an emergency or unforeseen event, through its local welfare assistance scheme. You can find details of your local scheme here.

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