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Money Matters

Universal Credit - what it means for students

The introduction of Universal Credit is the biggest change to our welfare benefits system in over sixty years - affecting millions of people with children or on a low income. It is steadily being rolled out across the country and will eventually replace most of the current benefits and tax credits systems. We have put together this guide to help you understand how Universal Credit affects students.

Firstly we explore what Universal Credit is and how it differs from existing benefits. Then we look more specifically at how it will affect students - including some 'real-world' case studies to show how dramatic the differences in amounts can be in certain circumstances.

What is Universal Credit?

Universal Credit is a new benefit that is replacing several existing benefits, including:

  • Income Based Jobseeker’s Allowance;
  • Income Related Employment and Support Allowance;
  • Income Support;
  • Housing Benefit and
  • Tax Credits.

The government is currently in the process of a national phased roll-out of Universal Credit. Some areas of the UK are already 'full-service', meaning that in those areas ALL new claimants would apply to Universal Credit instead of the benefits named above.

In other areas, it is currently only single unemployed claimants without children who would need to make a claim for Universal Credit. However, these areas will eventually become 'full-service' during the roll-out, meaning all new claimants would have to claim UC - including working people, couples and families.

It is in full-service areas that the benefit changes will start to affect student claimants.

To find out when your area will move to full service Universal Credit check here

Please note - Universal Credit will not replace DLA/PIP, Contribution Based Jobseeker’s Allowance and Contribution Based Employment and Support Allowance.


Who can apply for Universal Credit?

Under the current benefit system, not all full-time students are eligible to apply for benefits. The same applies to Universal Credit. Only certain students can apply if they fit into certain eligibility categories.

Full-time students can apply for Universal Credit if at least one of the following circumstances applies:

  • You have a dependent child
  • You have limited capability for work AND are in receipt of DLA/PIP
  • You have a non-student partner. They can make a claim which includes you as their student partner.

You will also need to live in a full service area. If you do not yet live in a full service area, you may be eligible for other benefits – feel free to contact or call into see us for more information.

How does Universal Credit differ from existing benefits?

Universal Credit is one single benefit, which can make it easier to adjust to a change of circumstance e.g. fluctuating income.

It is paid monthly, as opposed to weekly or fortnightly.

Student income, such as your Maintenance Loan, is also applied differently - meaning that students who already claim benefits may find their entitlement is reduced once they move onto Universal Credit.

It is paid to one claimant, including any assistance towards rent, with some exceptions. Payments cannot be split between two claimants in the case of a couple claim.

How is Universal Credit calculated?

A claimant’s maximum Universal Credit is calculated using a standard allowance for each adult/couple, plus additional elements for each child, plus childcare if you are working, and disabilities. Housing costs can also be included i.e. your rent or, in some cases, support for mortgage interest.

The claimant’s income, excluding some disregards, is then deducted from this to give the amount of Universal Credit awarded.

Therefore the calculation is:
Maximum Universal Credit - Allowable Income = Universal Credit to be paid

Income from student maintenance loan and certain grants will be included. This differs from Tax Credits, where student income is generally ignored. This is one reason why students with dependent children may find they receive less under Universal Credit than under the current benefits system.


I am a full time student and currently in receipt of some of the benefits which will be replaced by Universal Credit. When will I be affected by this?

Your current claims will be unaffected until either:

a) you have a change of circumstance resulting in a new claim for benefits or
b) the government starts the process of ‘managed migration’.

If you make a new claim - for example, you need to claim assistance with rent and are not currently claiming this and your area is providing full service Universal Credit, you will need to claim Universal Credit and your other claims will cease. Check here to find out when your area will provide full service Universal Credit.

If you do not make any new claims you will eventually be moved onto Universal Credit during ‘managed migration’ in the future. This is the process where the government will start moving people onto Universal Credit automatically.

The process of managed migration is not due to begin until 2019 and the Government hopes to complete the process by 2022. Therefore, if you do not need to make any new claims, your current benefits should remain until at least 2019.

Even then, you may benefit from ‘transitional protection’, meaning that if you are migrated you will not be made worse off under Universal Credit. Remember though, that transitional protection is not available to those who move to Universal Credit due to a change of circumstances or if you have to make a new claim.

You can find out more information about transitional protection here

Please be aware that you may also need to make a new claim if you separate from a partner or move in with a new partner. This is a change in circumstances that may result in a claim for Universal Credit.

Feel free to contact or call into see us if you require further information on the changes which may result in a claim for Universal Credit, or check out the information in our useful links below.

How will my income be affected if my current benefits are transferred to Universal Credit?

This will depend upon your full circumstances, although in many cases full time students may receive a smaller award under Universal Credit than under the current range of benefits.

Feel to contact or call into see us if you wish to discuss your individual circumstances. Also check out our case studies below for an in-depth look at how benefits are calculated in certain student scenarios.

Do I need to do anything now?

If you are concerned about how these changes may impact on your income, feel free to contact or call into see us so that we can discuss your circumstances and inform you on the impact of being transferred onto Universal Credit. We can also discuss ways to budget if your income drops.

Students who are currently claiming benefits and/or tax credits can seek guidance from our service when considering making any changes to their current claims. This includes claiming additional benefits during the summer, changing tax credits from a joint to single claim (or single to joint claim) and making new claims for assistance towards rent. Please note that these changes in circumstances will trigger a change to Universal Credit if you are in a full service area.

I am currently in receipt of Universal Credit. How will this change if I become a full time student?

You may become ineligible - unless you fit into one of the categories explained above in ‘Who can apply for Universal Credit?’

If you do fit into one of the categories, your student income will be taken into account, and this may reduce your award. However, this will depend upon your full circumstances - feel free to contact us for an appointment to discuss this further.

Is there anything else I need to know?

Universal Credit claims take some time to be processed. There may be a wait of up to six weeks between a claim being made and payment being issued.

Also, during this time, existing claims for previous benefits may cease. It is therefore very important to plan as much as you can in advance if you think you will need to change a benefit claim or make a new claim, as you could be moved to Universal Credit and be temporarily left with no income for that six week period.

Feel free to contact or call into see us to discuss how to manage financially during this period. It may be that you will need to budget your student finance Maintenance Loan for a longer period. You could try using our PANDA budgeting tool to help you. Or you may be able to apply to the University Hardship Fund or other funding sources.

It's sometimes possible to apply for an advance payment of your Universal Credit if you will be financially struggling while your claim is being processed. You should do this very early in the Universal Credit application process. Please see the Citizens Advice guidance on how to apply here.

Case Studies - see how students can be affected

In the sections above, we explained that Universal Credit calculations look at student income (e.g. Maintenance Loans) differently to the calculations of the current system of benefits.

To show you how this looks in real-world cases, we have put together some Case Studies that show what would happen in certain scenarios.

In all of the examples, we have shown the differences between what the students would receive in benefits under the current system versus what they would receive under the Universal Credit system if they had to make a new claim in a 'full service' Universal Credit area.

Each link opens up a separate Microsoft Word.doc which explains in detail exactly how the calculations are worked out. At the bottom of each example we show a user-friendly comparison between the two systems, to see if the students are better or worse off under Universal Credit.

Lone Parent Example 1 - Rey is a young student, lone parent of one child. See what would happen to her existing benefits if she puts in a new claim or undergoes a change in circumstances that results in a new claim.

Lone Parent Example 2 - Leia is a mature student, lone parent of one child. See what would happen to her existing benefits if she puts in a new claim or undergoes a change in circumstances that results in a new claim.

Lone Parent Example 3 - Finn is a mature student, lone parent of one child, and he works part-time alongside his studies. See what would happen to his existing benefits if he puts in a new claim or undergoes a change in circumstances that results in a new claim.

Married Student Example - Lyra is a mature student who is married. Her husband works and they have one child. See what would happen to her existing benefits if she puts in a new claim or undergoes a change in circumstances that results in a new claim.

As mentioned above, if you are currently claiming benefits and have any worries about Universal Credit and how/when it will affect you, please get in touch with us.

Useful links

Here are some useful external links that will help you prepare for Universal Credit and give you more information about how it is calculated:

Welfare Benefits Unit - - for a very in-depth look at the benefit. Look for the 'Universal Credit Focus' secion of the page, including the list of changes in circumstances that would trigger a claim for Universal Credit. Also includes advice on preparing yourself for the change to UC.

The official Government webgage - - gives an overview of the benefit and how to apply.

Citizens Advice - - gives information and advice on the application process, as well as advice on what to do if things go wrong.

EntitledTo - - part of their general advice pages on UC.

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