How to Calculate Universal Credit

How to Calculate Universal Credit

The calculation can be quite complicated and so if there is something that you are not sure about, please do feel free to book in with the Benefits Advisor (details below)

Universal Credit is an income replacement benefit consisting of six legacy benefits namely; Income based Jobseekers Allowance, Income Related Employment and Support Allowance, Income Support, Housing Benefit and Tax Credits. It can be claimed by those in or out of work.

There is support available for you to help you make your claim for Universal Credit and there are some useful videos here – https://www.understandinguniversalcredit.gov.uk/making-a-claim/before-you-claim/

NB – The migration process of moving people over to Universal Credit from the old legacy benefits has begun and you should refer to the Universal Credit migration factsheet (link below).

It is a good idea to have a rough understanding of how to calculate your entitlement so that you can easily find any problems in your award easily.

The steps are as follows:

Step 1

Looking at the number of adults in the house – you will be awarded one of the ‘elements’ below.

Personal Allowance
Single Under 25	£316.98
25 +	£400.14
Couple both under 25	£497.55
One or both aged 25+	£628.10

Next you will be awarded amounts for the number of children in your household.

Please note that if you have 3 or more children, you are not entitled to claim Universal Credit and will need to claim Child Tax Credits and other ‘legacy benefits’. If your oldest child is born after April 2017, you will only receive the lesser amount of Child Element

Child Element
Eldest Child (born before April 2017)	£339
Child Element	£292.81

You will then be awarded additional amounts for any disabled children you may have.

You will receive the lower rate for each child in receipt of DLA/PIP and the higher rate for those in receipt of high rate DLA for care/enhanced daily living of PIP.

Disabled Child Element
Lower rate (Low and medium rate DLA)	£156.76
Higher rate (High rate DLA)	£495.87

If you have had a Work Capability Assessment and have been found to have limited capability for work, or work related activity this will then be added. If both of you in a couple have been found to have this, you will receive only one element. If you have been assessed as having limited capability for work after April 2017, you will not receive this element. Please refer to the Work Capability Assessment Factsheet for more information.

Any appeal decisions which relate to claims made before this date can still have this included.

Limited Capability for Work Element
For Work (claims made before April 17)	£
For Work Related Activity	£423.17

Next if anybody in the household is classed as a Carer, whether they are receiving Carers Allowance or not, this can be added to the claim

Carer Element
Carer Element	£201.68

Please note that a person who has been classed has having limited capability for work or work related activity cannot claim for this and the carer element. In this instance the highest element would be added. In the case of a couple, a partner can claim caring responsibilities for the other partner and this element can then be added.

Next if somebody in the household is working and eligible for help with childcare costs these can be added in as follows to the maximum amounts below:

Childcare Costs 85% of the following
1 Child	£1031.88
2 + children	£1768.94

If you are renting your property and have a tenancy agreement, you can claim for assistance with your eligible rental costs. This will include bedroom tax, LHA shortfalls and non-dependant deductions

Total Eligible Rent (minus B/tax, non-dep deductions, LHA)

If you have any other income from benefits or savings this needs to be deducted from your award.

Benefits include – Carers Allowance, Contribution Based JSA and ESA, Industrial Injuries Disablement Benefit. DLA, PIP and Child Benefit are excluded.

Any Pensions

Any savings that you have above £6000 -£4.35 will be deducted from your benefit for every £250 or part of this over the limit. So for example, savings of £6300 will result in loss of £8.70 of Universal Credit. This is called tariff income.

This will then give your entitlement to Universal Credit as a monthly figure excluding any deductions you may have for repayments and arrears.

If you are not in employment, you can stop now, if not you will need to continue with the stages below.

Step 2

You will need to calculate your net income from employment on a monthly basis and if you are unsure, you can use an online tax calculator such as; www.listentotaxman.co.uk.

Next, if you have children or somebody in the household has been classed as limited capability for work or work related activity, you will be eligible for a work allowance, meaning that some of your earned income is disregarded as below.

Minus Work Allowance
For those with LCWRA/LCW/Children and no housing costs	£684
For those with LCWRA/LCW/Children and housing costs	£411

The next stage of the process is to calculate 63% of your income which can be disregarded when working out your Universal Credit Award.

For example, if your net income from employment was £480 per month, you were a single person, with no children, no housing costs and no disabilities, and you didn’t qualify for any of the work allowances above, you would calculate 55% of £480, £264 which would be deducted from your original step 1 £400.14 leaving an entitlement to £136.14 per month.

Total income after deductions	£480.00
Minus 55% of excess income	£264
Total UC award	£136.14

The calculation can be quite complicated and so if there is something that you are not sure about, please do feel free to book in with the Benefits Advisor (details below)

This advice is provided by our Benefits Advisor, Robert Mandelstam. The information provided above is up to date for the financial year ending 5th April 2026.

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