Universal Credit

Universal Credit is a payment to help with living costs for people on a low income, out of work, or unable to work, paid monthly (or twice a month for some claimants in Scotland). Part 1 of the Welfare Reform Act 2012 contains the provisions establishing this 'integrated working-age benefit', which, depending on the claimant's circumstances, includes a standard allowance to cover basic living costs along with additional elements for responsibility for children or young persons, housing costs, and other particular needs.

Universal Credit is designed to replace six pre-existing means-tested benefits and tax credits: working tax credit, child tax credit, housing benefit, income support, income-based jobseeker's allowance, and income-related employment and support allowance. According to the Act's Explanatory Notes, the aim of Universal Credit is to smooth the transition into work by reducing the support a person receives at a consistent rate as their earnings increase.

Financial support under Universal Credit is underpinned by responsibilities that claimants may be required to meet, recorded in a claimant commitment, with the level of those requirements depending on the claimant's particular circumstances. Existing claimants of legacy benefits do not need to act unless their circumstances change or they receive a 'Migration Notice' requiring them to move to Universal Credit by a stated deadline, at which point their legacy benefits stop.