What is Universal Credit?

Definition of Universal Credit

Universal Credit is a UK benefit payment for adults who have little or no income.

Universal Credit is a means-tested benefit, which means that recipients are entitled to different levels of payment based on personal circumstances such as age, household income and whether recipients have caring responsibilities for children or other family members.

Who is eligible for Universal Credit?

Universal Credit is available to people who:

• are based in the UK
• receive low income or are out of work
• are over 18 (there are some exceptions for those who are 16 and 17)
• are below the state pension age

I’m a sole trader. Am I eligible for Universal Credit?

If you’re a sole trader, you may be entitled to Universal Credit as a means of topping up your earnings. To be eligible, you need to be gainfully self-employed. The Department of Work & Pensions may deem your self-employment to be gainful if it provides regular, profitable work.

I’m a limited company director. Can I apply for Universal Credit?

Yes. According to Universal Credit decision maker’s guidance, if you’re a limited company director, you’ll be subject to the same requirements as sole traders and may be able to use Universal Credit to top up your earnings.

If you’re a limited company director, your shares in the company will be taken into account when your eligibility for Universal Credit is assessed.

How do I apply for Universal Credit?

You can apply for Universal Credit through the UK government’s website.