Children's handbook Scotland
Chapter 1: Benefits and tax credits
19. Universal credit
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19. Universal credit

Universal credit (UC) is a new means-tested benefit which is being gradually introduced across the UK.

UC replaces the following benefits and tax credits:

income support;

income-based jobseekers' allowance;

income-related employment and support allowance (ESA);

child tax credit;

working tax credit;

housing benefit, for most claimants.

By the end of 2018, it is expected that UC will have been rolled out across all parts of Scotland. For most people, this means that if you have to make a new benefit claim and you would previously have claimed one of the benefits being replaced by UC (often called 'legacy benefits'), you will have to claim UC instead. If you are already on a legacy benefit and you have a change of circumstances which means you have to make a new claim, you will probably have to claim UC. Eventually, people who are on legacy benefits will be transfered to UC.

The Department for Work and Pensions is responsible for the administration of UC.

Who can claim universal credit

You can claim UC if:Footnote

you come under the UC system; and

you are aged 18 or over (although certain 16- and 17-years-olds can claim); and

you are not receiving education (although there are exceptions to this); and

you satisfy certain residence and presence conditions, and are not a 'person subject to immigration control'. See CPAG's Welfare Benefit and Tax Credits Handbook for details; and you have accepted a 'claimant commitment' (see Cross reference); and

your savings and other capital are £16,000 or less; and your income is low enough.

Amount of benefit

The amount of UC you get depends on your circumstances and the circumstances of your partner, if you have one. It also depends on whether you have dependent children. The steps set out below show how UC is calculated.

Step one: capital
If your capital is over £16,000 you cannot get UC. Some kinds of capital are ignored. For details, see CPAG's Welfare Benefits and Tax Credits Handbook.
Step two: work out your maximum amount

This is an amount for basic needs. It is worked out on a monthly basis and includes a 'standard allowance', plus additional amounts ('elements') if you have dependent children, certain housing costs or some other additional expenses.

Standard allowance

Your standard allowance is paid at either a single or couple rate.

Circumstances   £ per month
 Under 25  251.77
 25 or over  317.82
 Both under 25  395.20
 One or both over 25  498.89

Additional elements

You get one 'child element' for each dependent child who normally lives with you (subject to a 'two-child limit' – see below).Footnote You get £277.08 a month for your only or oldest child if that child was born before 6 April 2017, and £231.67 a month each for any other child. You get an additional amount for a child who gets disability living allowance (DLA), personal independence payment (PIP) or has a visual impairment.Footnote This is paid at £126.11 a month or £383.86 a month if your child gets DLA highest rate care component, PIP enhanced daily living component or is severely sight impaired or blind.

A 'two-child limit' was introduced on 6 April 2017.Footnote In general, this means that from that date there is a maximum of two child elements included in your UC, even if you have more than two dependent children. You can continue to get three or more child elements already included in your claim before this date. There are exceptions to this, including some adoption and kinship care situations. See the relevant chapter of this Handbook for more information.

There are special rules about when the child element is paid where a child is absent from home. Whether it continues to be paid depends on the circumstances. See the relevant chapter of this Handbook for information on what happens to the child element when a child is away from home. There are also special rules which mean that some people cannot get the child element for a child even though the child is living with her/him. See the relevant chapter of this Handbook to see how you might be affected.

You may get an amount for rent or certain service charges if you own your home.  This is called the 'housing costs element'. The amounts are limited and may, for example, not cover all your rent. See CPAG's Welfare Benefits and Tax Credit Handbook for more information.

For claims that started before 3 April 2017, or are linked to a claim which existed before that date, if you have limited capability for work you get the 'limited capabilty for work element' of £126.11 a month. New claims made from 3 April 2017 do not include the limited capability for work element. For more detail about these rules see CPAG’s Welfare Benefits and Tax Credits Handbook. Alternatively, if you have limited capability for work-related activity, you get a 'limited capability for work-related activity element' of £328.32 a month. The tests used in ESA are used to decide whether you should get either of these elements.

You get a 'carer element' of £156.45 a month if you satisfy the rules for carer's allowance (CA) or would satisfy them except that your earnings are too high.Footnote You must be caring for someone who is in receipt of certain disability benefits. Your caring responsibilities must be for at leat 35 hours a week. You do not have to have claimed CA to get the carer element. You cannot get an element for being a carer and an element for your own illness. If you are entitled to both, you only get the one which is higher.

You get a 'childcare element' if you are working and have childcare costs in respect of a dependent child.Footnote You can get help with up to 85 per cent of these costs, up to a maximum limit. You must be in paid work and the childcare costs must be necessary to allow you to work. If you have a partner, you must both be in paid work unless your partner is ill, disabled or a carer.

Step three: work out your earnings and how much can be ignored

Some of your earnings may be ignored for UC: this is called the 'work allowance'. You only get a work allowance if you have a dependent child or children or if you have limited capability for work. There are two levels of work allowance depending on whether you are getting help in your UC with housing costs. 

Monthly work allowance


 Higher work allowance

(no housing costs)

Lower work allowance

(housing costs)

   £ per month  £ per month
 Single or couple, no children  0  0
 Single or couple, responsible for a child, or one or both has limited capability for work  409  198


If your earnings are less than your work allowance they are ignored. If they are more than your work allowance, 63 per cent of the excess counts as income. If you do not have a work allowance, 63 per cent of your earnings counts as income.

Step four: work out your other income and how much can be ignored
If you have other income apart from earnings (eg, other benefits), unless it is ignored, it reduces the UC maximum amount pound for pound. See CPAG's Welfare Benefits and Tax Credit Handbook for more details of what income is ignored. See the relevant chapter of this Handbook for more information on how specific income (eg, fostering allowances and payments from the local authority) is treated.
Step five: calculate your total income
Add together the income that is to be taken into account under steps three and four.
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