Housing Systems: Combating poverty and sustaining tenancies.
Calculating UC Escape Room - How UC is Calculated
Universal Credit is a means tested benefit paid to top up the claimant's income to help them pay for essential goods and services - including their rent and eligible childcare costs.

As a means tested benefit, how much the claimant will get depends how much they are deemed to need to live on (according to government figures) - their Maximum Universal Credit - against how much income they already have coming in. 

So to work out a claimant's entitlement you will need to know about their personal circumstances - how old they are, whether they have any children,  whether anyone in the family is disabled or a carer and so on, as well as details about their income.

Universal Credit is a monthly benefit and is reassessed every month - all the figures used are therefore monthly ones.

Once you have the information, to save you doing the maths you can use our Quick UC Calculator - click here.

There are three key steps to working out how much Universal Credit a claimant will get.

Step 1: Calculate the claimant's 'Maximum UC' amount
You start by working out the claimant's Maximum Universal Credit - the most UC they could receive.

You do this by adding together the various Allowances and Elements they are entitled to based on their personal circumstances.

Each of these have their own eligibility rules.

Click here for more information.

Step 2: Reduce due to income
Once you have worked out a claimant’s Maximum Universal Credit you then look at their income.

If they already have some income coming in then their Maximum UC will be reduced


Any net earnings they receive for work will reduce their maximum Universal Credit Figure by 55p for every £1 in net earnings they have above their Work Allowance. 

More more information on net earnings click here.

For more information on the Work Allowance - click here.

Unearned income

Other income, such as certain benefits, pensions and savings can then reduce their Maximum Universal Credit even further - this time £1 for £1.

But certain income is disregarded - this includes Child Benefit, Child Maintenance, Disability Living Allowance and Personal Independence Payment
For a full list click here.

Step 3: Reduce due to Benefit Cap
Once you have reduced the claimant's Maximum Universal Credit by any 'assessable' income ie earnings and unearned income, you then need to check whether this should be further reduced by the Benefit Cap.

Only large families and some people with high rents will be affected by the Benefit Cap- and there are certain exclusions too.

Click here for more information on the Benefit Cap.

What you are left with is the claimant’s entitlement to Universal Credit.