How much you would get in universal credit if you lost your job today

Ministers cut universal credit – the benefit more than 5.5 million people rely on – by £20 per week in October.

It amounts to a £1,040 annual loss for claimants and could, according to anti-poverty charity the Joseph Rowntree Foundation, push half a million people into poverty.

It is a means-tested benefit for people who are unemployed or on a low income and are of working age. 

It replaces child tax credit, housing benefit, income support, income-based jobseeker’s allowance, income-based employment and support allowance, and working tax credit. 

The government planned to move everyone on these so-called legacy benefits onto the new system by September 2024, though this is now uncertain due to Covid-19 delays.

People on universal credit have repeatedly reported having to turn to food banks, struggling to pay rent and going cold in the winter months because payments don’t cover their living expenses.

The amount someone receives is dependent on a number of factors – including age and if you are claiming while single or with a partner you live with – and is not exclusive to unemployed people. Around 40 per cent of people receiving the benefit are already in work.

People aged 18 or over can claim universal credit (though some exceptions are made for 16 and 17 year olds) but must be under state pension age. They also must live in the UK and have less than £16,000 in savings.

Universal credit is awarded based on a person’s circumstances rather than there being a set income threshold.

What would your experience be on universal credit?

Standard allowance

The standard rate of universal credit is what a person is entitled to before any add-ons, but can change depending on work earnings and other income.

After the cut – which amounts to £86.67 per month – the standard allowance for someone is as follows:

Single person aged under 25: £257.33 a month

Single person aged 25 or over: £324.84 a month

Joint claimants both aged under 25: £403.93 a month

Joint claimants where one or both is over 25: £509.91 a month

Increased payments for housing, children and childcare

Your universal credit entitlement will increase if you need help paying for housing, if you have children or need to cover childcare costs.

There are also extra elements given to people who are caring for someone else, or to those who are unable to work through illness or disability.

What would I get on universal credit?

A single 27-year-old living in privately rented housing in Pontefract, Wakefield – one of England’s most deprived postcodes – who is unemployed and looking for work could be entitled to £591.33 per month.

If the same person got a job paying minimum wage for 16 hours per week, their universal credit entitlement would drop to £202.15 per month. This is because for every pound earned, the government takes 63p from universal credit payments.

This would bring their overall monthly income to £861.51. 

Payments would be different for a couple in their 30s living in social housing in Druids Lane, Birmingham. One person does not work due to disability and receives £60 in personal independence payments (a benefit given to disabled people who struggle with daily tasks) per week, the other – who does not qualify as their carer – works 30 hours per week for minimum wage. Between them they have £2,000 in savings.

This would mean their total income was £327.30 a week. They would be entitled to just £2.61 per week in universal credit.

A single mum in Tower Hamlets, east London, with two young children, lives in a privately rented flat. Her childcare costs are around £328 per week for both children to spend 25 hours with a childminder. She works 21 hours a week for £9 per hour and does not receive child maintenance payments.

Her family would receive £467.84 per week in universal credit plus £35.15 in child benefit. If she had another child, she would not be entitled to extra cash support because of the two-child limit.

Each of these claimants would face a five-week wait to receive a first payment, during which they would have no income or earnings from work only. The government offers advanced payments, which effectively work as loans as they are paid off through a person’s universal credit entitlement over the next year. They could also be hit by the benefit cap, which limits the amount someone can claim. 

The examples detailed here are estimates. Get more information on how much you would be entitled to using a benefit calculator.