When everyone has a home

Housing advice for Northern Ireland

Working out your Universal Credit payment

The amount of your universal credit payment will depend on several things, such as

  • Your personal and household circumstances
  • Your earnings and any other income
  • Your savings and assets.

Because you’ll be claiming online, it’s useful to gather up all the paperwork you’ll need to complete the claim before you start.

There are a lot of questions, and it’s tempting to start the claim and then finish it at a later date. But, the money will only be calculated and paid from the date you’ve completed every section of the form and completed the declaration at the end.

What information is needed?

When you claim, you’ll need to provide information about

  • Your personal circumstances
  • The circumstances of anyone who lives with you
  • Any sicknesses or disabilities you have, which mean that you are unable to work
  • Any work you carry out
  • Any savings you have or assets that you own
  • Your housing costs
  • Your childcare costs, including the name of your childcare provider
  • Your income, including any other benefits you receive.

How is universal credit calculated?

The amount of universal credit you receive depends on which of the allowances you are entitled to. The total of all your allowances is your maximum Universal Credit payment.

Deductions are made from your maximum payment. Deductions are made for

  • Earned income: you will have to declare a certain percentage of your earnings from work
  • Unearned income: you will have to declare other income, such as benefits and pensions
  • Savings: an amount will be deducted from your Universal Credit if you have savings or assets valued at over a certain amount

Your Universal Credit can also be reduced if you have to pay back an advance, if you are sanctioned or if you have to repay certain debts.

The amount you receive will be your maximum allowance minus your deductions.

EntitledTo’s benefit calculator can give you an idea of how much help you will receive.

Your total allowances

There are seven allowances in Universal Credit and the amount you receive in each depends on your circumstances.  The allowances are

  • a Standard Allowance, the amount of which depends on whether you are single or a couple and on your age
  • a Child Element, the amount of which depends on whether you have a single child or more than one child
  • a Disabled Child Element, the amount of which depends on the severity of the child’s disability
  • an element if you have been through Universal Credit’s work capability assessment and have been found to have a limited capability for work related activity
  • a Carer’s Element if you are caring for a severely disabled person for at least 35 hours a week
  • a Childcare Costs element, which will entitle you to up to 85% of your childcare costs as long as these are below set maximums
  • a Housing Costs element.

The "two-child" limit

Currently, families with more than 2 children cannot claim Universal Credit, but this will change from 1 February 2019. 

If you have three or more children and need to claim benefits after 1 February 2019, you will have to claim Universal Credit. The "two-child" limit in this benefit means that you will not always get an allowance for each child in your family. Whether you get an allowance for each child depends on the number of children in your family and on when your children were born. 

You will get an allowance for any child or young person who was born before 1 April 2017. 

If you have children who were born after this date, you will get an allowance for them if they are your first or second child. But, if you have three or more children and at least one of them was born after 1 April 2017, your Universal Credit payment may not include an allowance for this child. Speak to an adviser if you would like to find out more about this rule. 

What deductions are made from your total allowances?

Certain income will be deducted from your allowance. Universal credit has different rules for “earned income” and “unearned income” and will also make deductions from your total allowance if you have savings or assets valued at over £6,000.

What is unearned income?

If you have any “unearned income”, you must declare this when applying for Universal Credit. The type of income you have to declare includes:

  • Contributory benefits, such as contributory ESA or JSA
  • Rental income you get from any property you own
  • Private pensions or retirement pension
  • Student income or bursaries and any other bursary payments
  • Income from any insurance policies, trusts or annuities you hold
  • Spousal maintenance payments

If you have any “unearned income” like this, your Universal Credit will be reduced by the same amount. So for example, if you receive a small private pension of £75 per month, your Universal Credit will be reduced by this same £75 per month.

The following are not counted as income by Universal Credit:

  • Payments of Disability Living Allowance or Personal Independence Payments
  • Child Benefit, or
  • Child maintenance payments

What is earned income?

Universal Credit only counts 63% of your earnings as income, and some households will be able to earn some money without their Universal Credit reducing at all.

If you have children or a limited capability to work, you will be given a “work allowance” – this is an amount of money you can earn each month, without it affecting your Universal Credit.

The work allowance for a single parent getting help with their rent is £198. If this parent earns £800 per month, Universal Credit will only reduce their award by £379.26:

  1. Monthly earnings of £800
  2. Minus “work allowance” of £198 = £602
  3. 63% of £602 = £379.26

What happens if you have savings or assets?

Deductions can be made from your total allowance If you have savings or assets of more than £6,000. If you have more than £16,000 in savings and assets, you will not receive any Universal Credit.

Where your savings are between £6,000 and £16,000 a “tariff income” applies. This means that your Universal Credit will be reduced by £4.35 per month for every £250, or part of £250, you have in savings or capital. For example, if you have £6,400, your Universal Credit will be reduced by £8.70 (£4.35 x 2).