What is Universal Credit?
This is a means-tested benefit, which integrates a number of existing benefits into one monthly payment. These existing benefits are now referred to as ‘legacy benefits’.
Universal Credit is replacing the following benefits, which will be phased out:
- Income-related Employment and Support Allowance (ESA)
- Housing Benefit
- Income Support
- income-based Jobseeker’s Allowance
- Child Tax Credit
- Social fund budgeting loans (such as emergency housing payments).
When Universal Credit is implemented, it will also mean the end of the disability premiums used in the calculations for legacy benefits.
All other benefits, including Personal Independence Payments (PIP), Disability Living Allowance (DLA), Attendance Allowance, Carer’s Allowance and Council Tax Reduction/Support, will remain unchanged.
How does Universal Credit work?
It is paid in a single monthly payment, which is made up of a number of individual payments called ‘elements’. These elements are:
- standard allowance – the basic rate: this is available to everyone who is eligible for Universal Credit, in addition to your other elements
- child element – this is in respect of children under 16 and qualifying young people under 20, only if you are responsible for them
- disabled child addition – this applies to you if you have a child who is receiving DLA or PIP
- limited capability for work or work-related activity element – if you’re deemed to have a limited capability for work (this doesn’t apply to new claimants) or a limited capability for work-related activity
- carer element – when you are a carer
- housing element – this is awarded to help you with housing costs
- childcare costs element – this is awarded to help you with childcare costs.
Everyone who successfully claims Universal Credit will receive the standard allowance. On top of this, you can claim the additional elements (listed above) that apply to you.
Each element has a different rate of payment, and the elements you qualify for are all added together to make up your monthly payment.
If you have a muscle-wasting condition, or a family member has, you may be entitled to the child element, disabled child addition, limited capability for work/work-related activity element and carer element.
This depends on how the condition affects you or your family member.