Universal credit: Payments
How is Universal Credit paid?
When will the first Universal Credit payment be paid?
What are waiting days?
Alternative payment arrangements
Scotland - flexible payments
Northern Ireland - flexible payments
How often are the payments after the first assessment period?
Impact of earnings on payments
Universal credit, including any part of the award which is an amount included for housing, is paid directly to the claimant. In a joint claim, both claimants nominate which claimant is to receive the payment (in some cases DWP can split the payment or decide which of the joint claimants will receive the payment). Claimants are responsible for ensuring they pay their rent to their landlord, although in exceptional cases, DWP will consider paying the housing amount of the award separately and directly to the landlord (see alternative payment arrangements below).
Payments are made by automatic transfer to the claimant’s bank account. Bank account details are completed as part of the claim process and any subsequent changes to those details should be notified to DWP. DWP have arrangements to make payment by a separate service for those unable to make use of mainstream bank, building society or credit union account and this method of payment should be discussed with the claimants work coach.
For new claims, payments can take up to 6 weeks. This is because once a claim is submitted there is:
- A 7 day waiting period
- First monthly assessment period (1 calendar month)
- Payment made 7 days after end of the assessment period
This makes a total of 6 weeks and this is likely to cause hardship for many claimants. If waiting for this first payment will cause a claimant financial difficulties they can request an advance payment and personal budgeting support. A discretionary housing payment from the claimant’s Local Authority may also be available.
UC claimants who are in the all-work requirements group won’t be paid for the first 7 days after they make their claim – these are waiting days. There are some exceptions to the waiting days policy which are explained on GOV.UK.
DWP can award an advance payment of Universal Credit for new claimants who expect to struggle meeting essential expenditure whilst waiting for their first payment and claimants in this situation should be encouraged to discuss their request for an advance payment at their Universal Credit claim interview. Advance payments will only be granted where DWP consider the Universal Credit claim looks likely to result in an award. The advance payment is a loan from DWP and must be repaid, usually by deducting the agreed repayment amount from subsequent payments of Universal Credit.
Claimants can ask for an advance payment at their UC interview, which will be booked after the online application is completed. This will take place at a local Jobcentre. If the claimant has already had their interview, they should contact the UC helpline on 0345 600 0723 (Textphone 0345 600 0743).
Claimants only get one advance payment and will have to explain how getting an advance payment will prevent damage to them or their family’s health or safety.
During his comments at the Conservative Party conference in September 2017, the Secretary of State for the DWP confirmed that staff guidance regarding advance payments would be refreshed. The revised guidance was provided to the Chair of the Work and Pensions Committee. The revised guidance states:
‘Claimants should be made aware that advances are available to them if they are in financial need. To establish if the claimant has a financial need and requires an advance they should then be asked if they have enough money to live on until the first payment of Universal Credit is due. This might be money from savings, earnings, redundancy payments or support from the claimant or partner’s parents, family or friends. If the answer is no, then a claimant should be offered an advance.'
Advances are also available where financial need occurs after reporting a change of circumstances.
UC is normally paid monthly in arrears to one member of a couple and housing costs are not paid directly to the landlord. Where a UC award includes the housing element, claimants themselves are responsible for paying their housing costs to the landlord (for flexible payments in Scotland and NI, see below). These arrangements are not suitable for everyone and so DWP have legal powers to pay UC in other ways including:
- Paying the housing costs directly to the landlord (called managed payments)
- Twice monthly payments (or exceptionally four payments per month)
- Split payments to each member of a couple
DWP can make these arrangements without an application from the claimant if they feel it is appropriate. Otherwise claimants can request an APA by speaking to their Workcoach at the Jobcentre, calling the UC helpline on 0345 600 0723 (textphone 0345 600 0743) or by applying on form UC129 (which does not appear to be available online).
Landlords can also request payment of rent directly from a tenant’s UC by filling in form UC47.
From 4 October 2017, people living in Scotland who make a claim for UC in a full service area will have some additional choices in relation their claim. They can choose to:
- Be paid monthly or twice monthly
- Have their housing costs paid to themselves or their landlord
These flexibilities are available to full service claimants only (not live service claimants).
According to the Scottish Government website, eligible claimants will be offered the choice after they have received their first payment of UC. This means the offer will be made at the start of the second assessment period, when the expected UC award is known. The offer should be made in the claimant’s online account.
If an Alternative Payment Arrangement has been applied for prior to the start of the second assessment period, then the corresponding choice will not be offered.
If the claimant does not make a choice within 60 days of the offer being presented, it will be removed from their online account, but they will still be able to request it at any time using their journal online.
Discussions are ongoing around existing claimants being able to access the choices from early January 2018.
More information for advisers is available on the Scottish Government website.
During discussions on the implementation of UC in Northern Ireland, it was agreed that three flexibilities would be introduced for UC claimants. It was agreed that:
- Twice monthly payments will be available to all households as the default, with monthly payments available on request.
- Split payments (paid into separate bank accounts) will be possible between parties in a household. This would be possible on the basis of the main carer and children to be determined by the Department. It would also be possible for a split payment for a couple with no children.
- Managed payment of the housing element of UC direct to the landlord will be available to all, with a direct payment to the household available on request to those who meet the criteria.
It is not clear how claimants will access these flexibilities and we will add more information as we find out. For now, claimants should speak to their workcoach.
The Northern Ireland Executive has announced that extra support will be available for working families claiming universal credit.
Universal credit payments are paid monthly, in arrears. Each monthly payment should be credited to the claimant within 7 days of the end of the assessment period that it covers. DWP expects claimants to be responsible for budgeting their finances accordingly, although they do have some flexibility to alter payments in exceptional circumstances and claimant should discuss this with their work-coach.
Depending on the frequency of a claimant’s employed earnings, their UC may vary even if they receive the same pay.
If they are paid once a month and the amount is static, then their UC should be the same each month (unless there are any other changes of circumstances that might affect entitlement).
However, if they are paid four weekly or fortnightly, it is possible that they will receive more earnings in some assessment periods than others. This could mean their income in one assessment period may be too high to qualify or they may receive a reduced amount and will have to budget carefully.
The DWP have produced some guidance showing how different payment frequencies can impact on UC.
Various organisations offer information and advice for Universal Credit claimants about budgeting. DWP work closely with Local Authorities to provide suitable budgeting support arrangements.
DWP have worked with Money Advice Service on a money manager tool for UC claimants.
- DWP Advice for Decision Making: Staff guide B1
- DWP publications
Updated 25 October 2017