Universal Credit rates: Is Universal Credit taxable?

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Universal Credit is a Government benefit, made up of several payments depending on your circumstances. You may be eligible to get Universal Credit if you are on a low income, out of work or you cannot work.

Universal Credit is paid monthly – or twice a month for some people in Scotland, and is replacing six benefits.

The payment is replacing the following benefits:

  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • income-based Jobseeker’s Allowance (JSA)
  • income-related Employment and Support Allowance (ESA)
  • Working Tax Credit

Read More: Universal Credit claimants could get bonus paid into bank account

Is Universal Credit taxable?

Some state benefits are taxable, while others are classed as tax-free.

State Pension, Jobseeker’s Allowance and Carer’s Allowance are all payments which are subject to income tax, as well as other benefits.

Income tax is not payable on other taxes such as Pension Credit and Housing Benefit.

In the case of Universal Credit, the benefit is regarded as a non-taxable source of income.

This means it can be left off tax returns and any other forms HMRC sends you asking about taxable income.

How much is paid on Universal Credit?

The amount you receive on Universal Credit is entirely dependent on your circumstances and what you are eligible for.

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Monthly standard allowance

  • For those single and under 25 – £342.72
  • For those single and 25 or over – £409.89
  • For those in a couple and you’re both under 25 – £488.59 (for you both)
  • For those in a couple and either of you are 25 or over – £594.04 (for you both)

How to apply for Universal Credit

You can apply for Universal Credit online and can do so on the Government’s website here.

You will have to apply as a couple if you and your partner live together, however you do not need to be married.

The Universal Credit team might phone you after you’ve sent your application if they need more information or if you cannot verify your identity online.

What you need to apply

You will need to have some items to hand to apply for Universal Credit. 

This includes: 

  • your bank, building society or credit union account details (call the Universal Credit helpline if you do not have one)
  • an email address
  • information about your housing, for example, how much rent you pay
  • details of your income, for example, payslips
  • details of savings and any investments, like shares or a property that you rent out
  • details of how much you pay for childcare if you’re applying for help with childcare costs

If you do not provide the right information when you apply it might affect when you get paid or how much you get.

You also have to verify your identity online. To do this you will need proof of identity such as:

  • driving licence
  • passport
  • debit or credit card

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