Universal credit: Payments
How is Universal Credit paid?
When will the first Universal Credit payment be paid?
What are waiting days?
Advance payments
Contingency fund (Northern Ireland)
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 (including impact of different earning patterns)
Budgeting support
Third party deductions
Other information
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). From August 2019, when a new household registers for UC, DWP tells the claimant(s) that the payments should be directed to the bank account of the main carer. Claimants are responsible for ensuring they pay their rent to their landlord, although in some 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.
In Scotland and Northern Ireland, there are some payment flexibilities that allow for different payments to be made.
When will the first payment of Universal Credit be paid?
To start with, there was an initial 7-day waiting period before entitlement to UC began. This 7 day waiting period was removed from 14 February 2018. Even so, for new claims, payments can take at least 5 weeks. This is because once a claim is submitted there is:
- First monthly assessment period (1 calendar month)
- Payment made 7 days after end of the assessment period
This makes a total of 5 weeks and can cause hardship for many claimants. If there is a delay in processing the payment, the wait could be longer. If waiting for this first payment will cause a claimant financial difficulties they can request an advance payment, personal budgeting support and, in Northern Ireland, a grant from the UC contingency fund. Claimants can request an advance through their online UC account. A discretionary housing payment from the claimant’s Local Authority may also be available.
Note that in Northern Ireland, UC payments are normally made twice-monthly rather than monthly however the first payment is still made five weeks after the claim is submitted.
Before the changes were introduced on 14 February 2018, UC claimants in the all-work requirements group weren’t paid for the first 7 days after they made their claim – these were waiting days.
Since the changes announced in the Autumn Budget 2017 were introduced from 14 February 2018, 'waiting days' have been removed for UC.
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. DWP staff should offer an advance payment, but regardless of whether the advance is offered, claimants should be encouraged to discuss their request for an advance payment at their Universal Credit claim interview. Claimants can also request an advance payment through the online account. 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. Normally, 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). Advances are also available where financial need occurs after reporting a change of circumstances.
Claimants can receive up to 100% of their potential entitlement (previously it was 50%).
The advance is repaid from UC payments and the first deduction is taken from the first UC payment. Advances taken before 12 April 2021 should be repaid over 12 months and advances taken from 12 April 2021 can be repaid over 24 months. If the advance is taken following a change of circumstances – rather than at the start of a new claim – it should be repaid over 6 months.
DWP can agree to delay repayments for advances if the claimant cannot afford them. They can be delayed for 3 months if the advance is for a new claim or 1 month if the advance is for a change of circumstances.
There is some guidance on the GOV.UK website about UC advances.
Contingency fund (Northern Ireland)
Claimants who live in Northern Ireland and have applied for UC may be able to get a grant from the UC Contingency Fund if they're in financial hardship after receiving an advance payment. The grant does not need to be repaid.
If this applies, the claimant should speak to their work coach in the first instance about Discretionary Support including the contingency fund. See the NI Direct website for more details.
Alternative payment arrangements
UC is normally paid monthly in arrears to one member of a couple and housing costs are paid to the claimant (rather than 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, although claimants in Scotland and NI can still have an APA in the same way as any other claimant). These arrangements are not suitable for everyone and so DWP have legal powers to pay UC:
- Other than monthly in arrears
- Partly or wholly to a third party if this is necessary to protect the interests of the claimant, a child they are responsible for or a severely disabled person who the claimant is getting a carer's element for
- To one partner in a couple or in 'split payments' to both partners if it is in the interests of the claimant (or others listed in the bullet point above).
These are discretionary powers, which means there is no right of appeal against a refusal by DWP to allow a change to UC payments.
These three legal powers to change how payments are made are called 'alternative payment arrangements' (APA).
APA will only be considered for those claimants who cannot manage the single monthly payment and, as a result, there is a risk of financial harm to the claimant and/or their family.
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 0800 328 5644.
Landlords can also request payment of rent directly from a tenant’s UC by filling in form UC47.
From December 2017, claimants living in the private rented sector and whose Housing Benefit was previously paid directly to their landlord should be automatically offered this payment option when they join Universal Credit.
More information on APA, including when DWP will consider an APA, can be found:
From 4 October 2017, people living in Scotland who make a claim for UC have had some additional choices in relation their claim. These are sometimes called 'Scottish flexibilities' or 'Scottish choices'. You cannot have Scottish flexibilities/choices and an APA at the same time.
Claimants can choose to:
- Be paid monthly or twice monthly
- Have their housing costs paid to themselves or their landlord
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.
More information for advisers is available on the Scottish Government website.
Northern Ireland – flexible payments
In Northern Ireland, UC is normally paid twice a month to a household, but a request can be made to have it paid monthly. The first payment is still made five weeks after a claim has been submitted.
How often are payments after the first assessment period?
Universal credit payments are paid monthly, in arrears (except in Northern Ireland where the default is twice monthly payments). 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.
Impact of earnings on payments
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, where the regular monthly pay date falls on a non-banking day and their employer pays early or late as a consequence, or the employer reports their earnings late for some reason, this could cause two pays to fall into one assessment period - depending on what date the employer put on their submission to HMRC. See our RTI section for more information.
If they are paid four weekly or fortnightly, it is possible that they will receive more earnings in some assessment periods than others because they have more than one pay-day in an assessment period. This could mean their income in one assessment period may be too high to qualify or they may receive a reduced amount of UC and will have to budget carefully. If they do not qualify for UC in an assessment period where they have more than one pay-day, they may need to re-claim UC in the following assessment period.
The DWP have produced some guidance showing how different payment frequencies can impact on UC.
Personal Budgeting Support aims to help claimants adapt to UC payments by providing support to claimants who need help managing their money. This includes money advice and APA (see above).
If the claimant feels they need help with managing money they should speak to their work coach who will direct them to appropriate support. DWP is working with local councils and other organisations to provide support.
More information is available in the DWP guidance on Help with managing your money.
DWP have worked with Money Advice Service on a money manager tool for UC claimants.
Third party deductions, sanctions and alternative payment arrangements can all affect the amount of payment from a UC award. Conditionality sanctions are deducted from the UC Adjusted Award and then amounts for Third Party Deductions (TPDs) and Alternative Payment Arrangements (APA) are deducted from the overall UC Award, not from individual elements that have been used as part of the process to calculate that Award. If the level UC payment remaining after deduction of sanctions and then the TPDs is less than the total value of the housing costs element, any remaining amount of UC will be paid out to a landlord as an APA.
The principle of how deductions are taken from a UC award is outlined below:
Calculation of UC entitlement
An entitlement to UC is decided as follows
- Stage 1 - Calculate the "UC Maximum Amount" by adding up the sums of money which are attached to the various UC elements (see Calculating section).
- Stage 2a - Take the UC Maximum Amount and then calculate the "UC Adjusted Award" by taking the UC Adjusted Award and then (a) making any necessary reductions in light of the capital, income and earnings available to the assessment unit and then (b) making any necessary adjustments in light of the Benefit Cap and Transitional Protection requirements (see Calculating section).
- Stage 2b - Take the UC Adjusted Award and then calculate actual "UC Award" by taking the UC Adjusted Award and making any reductions necessary for conditionality sanctions (i.e. imposed for non-compliance with conditionality requirements) attributed to the benefit unit. This then represents the UC Award for the benefit unit.
- Stage 3 - Take the UC Award and calculate the actual "UC Payment" by taking account of any other penalties and then any Third Party Deductions, sums for overpayment recovery and (repayments of) any finally short-term/budgeting advances and APA. This is the actual amount of UC that will be physically paid in the assessment period.
Regulation 2 (1) of the Universal Credit, Personal Independence Payment, Jobseeker's Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013 confirms that the Secretary of State may deduct an amount from a claimant's UC award and pay that amount to a third party to discharge (in whole or part) a liability of the claimant to that third party. As illustrated, deductions are made from the UC Award and not from any 'element'.
There is more information about deductions that can be taken from payments of UC on the GOV.UK website.
- DWP Advice for Decision Making: Staff guide B1
- DWP publications
Last reviewed/updated 25 May 2022