Calculating Universal Credit
Last updated: 23/06/2022
The amount of Universal Credit you receive depends on your circumstances including:- the number of children you have, any disabilities, housing costs, childcare costs, savings, earnings and any other income. Your monthly Universal Credit payment will be based on these circumstances in the month before you are paid. This is called the assessment period. Your Universal Credit could vary each month if your circumstances change in the assessment period before your Universal Credit is paid.
Universal Credit is made up of different amounts called elements. The elements are all added together to give the maximum monthly amount of Universal Credit you could receive. This amount may be reduced if you have any other income.
Standard allowance element
This is an amount given for adults. There are 2 different amounts depending on your age.
Standard allowance under 25: £265.31
Standard allowance 25 or over: £334.91
This is an amount given for each child you are responsible for. This is usually each child, or young person, for whom you get Child Benefit. It is normally only given for two children but there are exceptions to this.
It is given for all children born before 6 April 2017. If you already have 2, or more, children born before this date and have another after it you will not get Universal Credit for this child.
Exceptions also apply where a third, or subsequent child, born on or after 6 April 2017, has been adopted, there is a kinship care arrangement, or the child was conceived as a result of rape. You will receive Universal Credit for these children.
If your third or subsequent child has a disability you will receive a disabled child element even if you are not getting the child element for them.
If you already receive Universal Credit for more than two children, born on or after 6 April 2017, you will continue to get it for all of them for as long as they remain your responsibility.
If you have two or more children born after 6 April 2017 then have another child, you will not get Universal Credit for the new baby.
Mary has a daughter born on 9 January 2014 and a son born on 16 February 2018. She will get Universal Credit for both these children. If she has another child she will not get Universal Credit for this child unless the child has a disability.
If Mary had 3 children born before 6 April 2017 she would get Universal Credit for all of them but would not get it for any other child born after this date.
First child or qualifying young person born before 06.04.17: £290.00
Child or qualifying young person: £244.58
Disabled child elements
If your child has a disability you will get one of these elements added to your award as well as the child element.
There are two disabled child elements:
- A lower amount for children getting Disability Living Allowance or Personal Independence Payment
- A higher amount for children getting the highest rate of Disability Living Allowance care component, the enhanced rate of Personal Independence Payment daily living component or who are severely sight impaired.
If your 3rd or subsequent child, born on or after 6 April 2017, has a disability you will get one of these disabled child elements but not the child element.
Disabled child or qualifying young person lower rate: £132.89
Disabled child or qualifying young person higher rate: £414.88
Limited capability for work elements
These elements are given to adults whose ability to work is affected by a health condition or disability. There are 2 elements. If you get one of these you are not expected to take a job.
To qualify you need to undergo an assessment. The result of this would determine what element would be added to your Universal Credit award.
The amount for each is equal to the standard allowance but there is an additional amount added if you have limited capability for work and work related activity.
Limited capability for work: £334.91
Limited capability for work and work related activity: £334.91 plus £354.28
For more details on benefits if you or your children have a disability or long term illness see Disability, sickness and care benefits.
This would be added to your award if you are caring for a severely disabled person for at least 35 hours per week. You do not have to be getting Carer’s Allowance.
Carer’s element: £168.81
Housing costs element
If you pay rent an amount up to the full cost will be added to your calculation.
For more information on help to pay rent see ‘What financial help is available to pay my rent.’
Childcare costs element
An amount to help pay for registered childcare is added to your award if you are working. It does not matter how many hours you work but there is a limit on how much you can get. 85% of your childcare costs can be paid but the most you can get is £646.35 per month for 1 child or £1108.04 per month for two or more children.
You can get help with childcare costs for more than two children.
You cannot usually get help with childcare costs if you are not working but can get help to pay them in the assessment period before you start work. You need to prove you have a firm job offer that you intend to accept.
Maximum amount for one child (85% of £760 limit): £646.35
Maximum amount for two or more children (85% of £1,300 limit): £1,108.04
Example of a universal credit calculation
Jenny is a single parent with 2 children aged one and nine. Her nine-year-old gets Disability Living Allowance high rate care.
Jenny is not working but gets Carer’s Allowance and pays rent of £477 per month.
Calculate maximum universal credit
Standard allowance: £334.91
First child element: + £290.00
Child element: + £244.58
Disabled child element high rate: + £414.88
Carer’s element: + £168.81
Housing element: + £477.00
Maximum Universal Credit: £1930.18
Adjust for unearned income:
Jenny has unearned income (Carer’s Allowance) which reduces her maximum award pound for pound:
Maximum Universal Credit: £1930.18
Unearned income (carer’s allowance): − £302.03
Universal Credit award: £1628.15
Jenny will receive Universal Credit of £1628.15 per month. She will also receive Child Benefit, Carer’s Allowance, Disability Living Allowance for her daughter and help with council tax.
How savings affect Universal Credit
If you have savings or capital over £16,000, you will not get Universal Credit. If you have savings or capital between £6,000 and £16,000, your Universal Credit award will be reduced by £4.35 per month for every £250 your capital exceeds £6,000.
How earnings and income affect Universal Credit
If you are working your earnings could affect the amount of Universal Credit you receive. Some of your earnings will be ignored when calculating your Universal Credit. These disregarded amounts are called the ‘work allowances’.
There are two work allowances that apply to single parents:
- Lower work allowance of £344.00 if you have housing costs included in your Universal Credit calculation.
- Higher work allowance of £573.00 if you do not have housing costs included in your Universal Credit calculation.
55% of you earnings over these work allowances will be subtracted from the maximum amount of Universal Credit you could receive.
Other taxable income, such as a pension or a contribution-based benefit, will also reduce the amount of Universal Credit you receive.
Disability Living Allowance, Personal Independence Payment and maintenance paid for children do not affect Universal Credit.
How when you are paid affects Universal Credit
If you are paid monthly
If you are paid every calendar month (12 times a year) and receive 2 months pay in one assessment period only one month’s pay should be counted for Universal Credit. The other payment should be counted in the assessment period it should have been paid.
For example you may get your Christmas pay early so receive 2 payments in your December assessment period and none in January. For Universal Credit only one payment will count in the December assessment period and the other in January. This will mean your Universal Credit payments will not change over this period.
If you are paid every 4 weeks
If you are paid every 4 weeks, so are paid 13 times a year, there will be one Universal Credit assessment period when you get 2 months pay. Both these payments will be counted for Universal Credit so your Universal Credit will be reduced or stop following that assessment period.
If your Universal Credit stops following the assessment period when you were paid twice, it should start again the following month. If Universal Credit does not restart the following month you should reapply for it. As you have already given all your details, reapplying is a much simpler process than when you first applied for Universal Credit. You will be only be asked to confirm your details are still correct and will not have to enter them all again.
If you are paid fortnightly or weekly
If you get paid every week or every 2 weeks your Universal Credit may change each month. How much Universal Credit you get will be based on how much you were paid in the previous assessment period.
Universal Credit if you are self-employed
If you are self-employed you will have to report your earnings (i.e. profit after deductions and expenses) in your online Universal Credit account every month. This information will then be used to calculate your Universal Credit.
If no profit is made a maximum Universal Credit award will be paid each month during the first year. After this first year start-up period an income of £617 per month will be used to calculate your Universal Credit if you earn below this amount.
Universal Credit for students
Single parents are one of the groups of students who can claim Universal Credit. Bursaries, loans and grants will affect how much you get.