Payments

Universal Credit Payments: An Overview – How Your Benefit is Calculated and Paid Universal Credit is designed to provide financial support for living costs, whether you are in or out of work. Understanding how your payment is calculated, when it arrives, and what factors can affect the amount is crucial for managing your finances. This guide provides a comprehensive overview of Universal Credit payments, including the assessment period, common payment methods, key financial concepts like the Benefit Cap and Earnings Taper, and where to find your payment details. How Universal Credit Payments Are Calculated Universal Credit is assessed on a calendar monthly basis and is paid monthly in arrears, regardless of the number of days in that month. This means your payment is for the previous month's period. Your payment amount is calculated at the end of each assessment period and is based on your known circumstances on that specific date. For example, if a child was on your claim for part of the assessment period but was no longer on it on the last day, the award would not include a payment for that child. Conversely, if your circumstances change on the last day of an assessment period, it can affect the payment for the entire period. The Assessment Period An assessment period is a fixed period of 1 calendar month. Your first assessment period starts on the date you make your Universal Credit claim, unless your claim is backdated. Most 'to-dos' (actions you need to complete) are created during your first assessment period, and it is essential to complete these activities correctly and in the specified time, otherwise, your payment may be delayed or incorrect. For more in-depth information, see our Payment cycles and assessment periods guide. Universal Credit Payment Methods Universal Credit is typically paid directly into a bank, building society, or credit union account that is in your (or your partner's) own name. If you do not have your own account, you are required to open one. Payments will usually be made on the same date each month, and if this date falls on a weekend or bank holiday, the payment will typically be made earlier. Universal Credit is an online service, and all notifications, including payment award notices, are made through your online account. You can usually print your payment award notice directly from your online account. The DWP does not provide physical proof of benefit letters. Payment Methods by Exception In situations where you have tried to open a bank account but have been refused, or are unable to access standard banking products, different payment methods may be considered for a first payment or for a limited time. • Payment Exception Service (PES): This service provides payments to claimants who cannot open a bank account. You may receive a payment card, an email/text message with a voucher code, or a PDF voucher (collected from the Jobcentre). This allows you to collect your payment from any PayPoint or Post Office that has sufficient funds. PES vouchers are valid for 90 days. • Hospital Account: If you are a hospital inpatient and are expected to be in hospital for some time, your Universal Credit can potentially be paid into the hospital's account, with notification from both you and the hospital. • Third-Party Bank Account: You may ask for your payment to be paid into someone else's account. This is used by exception and only when all other options have been reviewed and discounted. You must confirm you have the account holder's permission, and they will be asked to confirm their details. You must be sure you can access your money. If you don't have ID or the correct ID needed to open an account, the Help to Claim service (provided by Citizens Advice) can support you in gathering the evidence needed to open a bank account. For more details on payment methods, visit our Method of Payment page. Key Financial Concepts Affecting Your Payment Several key concepts can significantly impact the amount of Universal Credit you receive each month: • The Benefit Cap: This is a limit on the total amount of benefit a household can receive. The cap varies for single claimants, couples, and lone parents, and also differs for claimants living in Greater London compared to those living nationally. The Benefit Cap may reduce the overall amount of Universal Credit you receive. There are exemptions to the Benefit Cap. To understand more about this, see our Benefit Cap guide. • The Earnings Taper: This rule is designed to ensure you are always financially better off when you work. Universal Credit 'tops up' your wages each month. As your earnings increase, your Universal Credit payments will gradually reduce. This is known as the Earnings Taper. If your job ends or your earnings reduce, your Universal Credit payments will increase. Once you are earning enough money through work, you will no longer receive Universal Credit, and your claim will be closed automatically. • Work Allowances: If you are responsible for a child or qualifying young person, or have limited capability for work, you may be entitled to a Work Allowance. This is an amount of earnings you can keep before your Universal Credit payment starts to be reduced by the Earnings Taper. There is a higher Work Allowance (if you don't receive housing costs in your UC) and a lower Work Allowance (if your housing costs are included in your UC). o Higher Work Allowance (no housing): £673.00 (2024-2025 rates). o Lower Work Allowance (housing included): £404.00 (2024-2025 rates). • Tariff Income: If you have capital (savings, investments, etc.) between £6,000 and £16,000, it is treated as if it provides an assumed income, known as 'tariff income'. For every £250 (or part of £250) above £6,000, your Universal Credit award is reduced by £4.35 per month. Universal Credit Monthly Rates (2024-2025) The rates for Universal Credit allowances and additional amounts are typically uprated annually, effective from 8 April each year for assessment periods starting on or after that date. Type of Claim / Addition 2024 to 2025 Monthly Rate Universal Credit minimum amount £0.01 Standard Allowance: Single under 25 £311.68 Single 25 or over £393.45 Joint claimants: both under 25 £489.23 Joint claimants: one or both 25 or over £617.60 Carer amount £198.31 Child amount: First child born before 6 April 2017 £333.33 First child born on or after 6 April 2017 £287.92 Second and subsequent child £287.92 Disabled Child Additions: Lower rate addition £156.11 Higher rate addition £487.58 Childcare costs amount (Maximum): Maximum for one child £1014.63 Maximum for two or more children £1739.37 Non-dependants housing costs contributions £91.47 Limited capability for work amounts: Limited capability for work amount (health-related claim started before 3 April 2017) £156.11 Limited capability for work and work-related activity amount £416.19 Work Allowances: Higher Work Allowance (no housing) £673.00 Lower Work Allowance (housing included) £404.00 Tariff Income (per £250 over £6,000) £4.35 Administrative Earnings Threshold (AET) (From 13/05/2024): Single claim £892.00 Couple claim £1437.00 Please note: These rates are subject to change based on government uprating. Always check official GOV.UK sources for the most current figures. For more comprehensive information on payment amounts, see our Rates page. Other Payment-Related Topics Universal Credit payments can be affected by various other circumstances: • Advance Payments: If you need financial support before your first Universal Credit payment, you can request an Advance Payment. Learn more on our Advance Payments page. • Alternative Payment Arrangements: In some circumstances, if you struggle to manage a single monthly payment, alternative arrangements can be considered. Find out more about Alternative Payment Arrangements. • Cost of Living Payments: The government may provide additional support through Cost of Living Payments in specific situations. Visit our Cost of Living Payments page for details. • Hardship Payments: If your Universal Credit is reduced due to a sanction and you are facing severe financial hardship, you may be able to apply for a Hardship Payment. See our Hardship Payments guide. • Overpayments and Underpayments: Understand what happens if you are paid too much or too little Universal Credit and how these are addressed. Read more on Overpayments and Underpayments. • Sanctions: Learn about how sanctions can affect your Universal Credit payments if you don't meet your claimant commitment requirements. Our Sanctions page has more information. • Cold Weather Payments and Winter Fuel Payments: These are additional payments to help with heating costs during colder months for eligible claimants. See our pages on Cold Weather Payments and Winter Fuel Payments. • Split Payments: In joint claims, it may be possible to request that the monthly payment is split between partners. Our Split Payments page explains this in detail. • Third Party Payments: In some cases, Universal Credit can be paid directly to a third party, for example, for rent arrears. Find out more on our Third Party Payments page. • Insolvency: Understand how your Universal Credit claim might be affected if you are facing insolvency or bankruptcy. Visit our Insolvency page for guidance. Money Guidance and Debt Advice Some claimants may experience difficulties setting up their claim and taking the required actions to ensure their first payment is correct and on time. Citizens Advice offers a 'Help to Claim' service that assists with providing evidence, using your online account, and requesting financial products like Advances and Alternative Payment Arrangements. If you require further money guidance or debt advice, you should be referred to additional support by Help to Claim or by Universal Credit agents. Frequently Asked Questions about Universal Credit Payments • Q: How often is Universal Credit paid? o A: Universal Credit is assessed monthly and paid monthly in arrears, usually on the same date each month. • Q: What is an 'assessment period'? o A: An assessment period is a period of 1 calendar month. Your Universal Credit for that month is calculated at the end of this period, based on your circumstances on that date. • Q: What is the 'Earnings Taper'? o A: The Earnings Taper is a rule where your Universal Credit payments gradually reduce as your earnings increase, ensuring that you are always financially better off by working. Where to Get Further Help & Advice For more detailed information on specific payment elements, deductions, advances, or how to manage your budget, please refer to our other guides in the 'Payments' section. For personalised financial advice or support with debt, always consult official GOV.UK guidance or contact an independent advice service like Citizens Advice. ________________________________________ Disclaimer: The information on this page is for general guidance only and is not a substitute for professional advice. Universal Credit rules and rates can change, and your individual circumstances may affect your entitlement. Always refer to official GOV.UK guidance or seek personalized advice from a qualified advisor. Last Updated Date: June 7, 2025 ________________________________________ Internal Links for Further Reading: • Advance Payments • Alternative Payment Arrangements • Benefit Cap • Cold Weather Payments • Cost of Living Payments • Hardship Payments • Insolvency • Method of Payment • Overpayments • Payment cycles and assessment periods • Rates • Sanctions • Split Payments • Third Party Payments • Underpayments • Winter Fuel Payments