Universal credit: Payments

How is Universal Credit paid?
Housing Benefit transitional payment
When will the first Universal Credit payment be paid?
What are waiting days?
Advance payments
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

How is Universal Credit paid?

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.

In Scotland and Northern Ireland, there are some payment flexibilities that allow for different payments to be made.

Housing Benefit transitional payment

The Autumn Budget 2017 introduced a Housing Benefit transitional payment for UC claimants from April 2018. This means that from April 2018, claimants who have been receiving Housing Benefit immediately prior to claiming UC will receive a transitional payment of two weeks Housing Benefit payment run-on when they claim UC. This will be unrecoverable and should be received in the first assessment period.

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. Changes were announced in the Autumn Budget 2017 which removes that initial 7-day waiting period and the change takes effect from 14 February 2018. Even so, for new claims, payments can take up to 5 weeks. This is because once a claim is submitted there is:

This makes a total of 5 weeks and can 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. From Spring 2018, claimants should also be able to request an advance through their online UC account. A discretionary housing payment from the claimant’s Local Authority may also be available.

What are waiting days?

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.

Advance payments

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. From Spring 2018, DWP have said they expect that claimants will be able to request an advance through their 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. 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.'

The rules around advance payments are to be further enhanced following the Autumn Budget 2017 announcements so that from January 2018, new UC claimants will be offered an advance of up to 100%. The effect of this change should be available fairly quickly, for example, new claimants in December 2017 who could already receive an advance of up to 50% of their overall entitlement, could then receive a second advance to take it up to 100% in the New Year.

Payments of advances will be made recoverable over 12 months, rather than over 6 months.

There is some guidance on the GOV.UK website about UC advances, and CPAG have written an excellent guide explaining advances and linking to the latest DWP guidance.

Advances are also available where financial need occurs after reporting a change of circumstances.

Alternative payment arrangements

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:

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 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.

Scotland – flexible payments

From 4 October 2017, people living in Scotland who make a claim for UC in a full service area have had some additional choices in relation their claim and from 31 January 2018, these choices are also available to anyone whose claim for UC in a full service area was made before 4 October 2017. They can choose to:

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.

From 31 January 2018 the Universal Credit Scottish choices are also available to people who:

More information for advisers is available on the Scottish Government website.

Northern Ireland – flexible payments

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:

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.

How often are payments after the first assessment period?

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.

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, 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.

Budgeting support

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.

Other information

Last reviewed/updated 14 February 2018