Universal Credit is a type of cash benefit that is paid directly into your bank account.

The purpose of Universal Credit is to make sure you and your family have enough money to live on if you are looking for work, on low incomes, or unable to work due to health conditions or caring responsibilities.

The amount of Universal Credit you are entitled to depends on your circumstances, including: your age, household members i.e partners/children, savings, childcare expenses, caring responsibilities, and health issues. Some areas of the UK have different types of benefits, such as “old-style” or “legacy” benefits. Other areas use the newer system of Universal Credit.

It is very important to let your Employment Adviser know which type of benefits you are currently receiving, as this can affect how much you will be paid when you get a job in the future. Soon, everybody in the country who receives benefits will get Universal Credit.

If you are on legacy benefits, you may be moved onto Universal Credit if you have a “change of circumstance”, for example if: you get a job, start volunteering, lose a job, change your bank details, claim any new benefits, stop getting benefits, receive a one-off payment, have new income that isn’t from work, your rent changes, someone moves in or out of your home, you move in with and/or split up from a partner. You can use an online benefits calculator to work out how much you are likely to receive.

You can take out an “Integration Loan” which can cover rent, household items, or education and training for work. This is an interest-free loan, but you must pay it back. You should always speak to your Employment Adviser and JCP work coach for advice on whether to apply for this, though it will be your responsibility to make sure you can pay it back on time.

The benefit cap limits the amount of working age benefit you can receive. The exact amount will depend on factors such as total household benefits being received and location. In most areas of the UK, the benefit cap ranges from £13,400 to £20,000 per year, but it can be higher in London . You are exempt from the benefit cap if your household earnings are at least £658 per month or you receive severe disability and/or carer benefits.

If you are receiving Universal Credit, you will always be better off financially if you start working. When you start work, you will continue to be paid benefits, but your payment will reduce by 55p for every £1 you earn. This means that you will still be paid 45p in addition to every £1 you earn, so you will be earning £1.45 instead of the £1 you were initially receiving.

If you aren’t sure how working will affect your benefits, you should speak to your Employment Adviser, who can help you do a “better off calculation”. Or you can use the benefits calculator in the More Information section on the next page to try to do it yourself.

You can compare your “non-work end of the month” calculations with your potential “in-work end of the month” calculations by using the “save as” function on the online calculator. If you start working, JCP can also reduce the requirements in your Claimant Commitment, meaning you have more free time.

The Claimant Commitment that you agree with your work coach takes your circumstances into account, which means you should be able to meet JCP’s expectations. If you do not, your benefits could be reduced.

If your work coach says you might face a “sanction”, you should speak to your Employment Adviser as soon as possible. Sanctions can be challenged, but it is always worth speaking to an expert first.

Managing money is an important life skill, especially if you are looking after children or other family members.

Creating a simple budget can help you keep track of your income and spending on a daily, weekly, monthly, or even yearly basis. You can use an online tool to get started.