Universal Credit Taxes 2022: Are UC payments taxable?


The time of year has arrived in the United Kingdom where taxes are at the forefront of many people’s minds, but if you are someone who claims Universal Credit, you might be wondering if this applies to you.

The interesting thing is that while there are some elements of state benefits which are subject to tax, others are tax free.

For example, some of the things that may be subject to income tax are the state pension, Jobseeker’s Allowance, and Carer’s Allowance, in addition to a number of other typical benefits.

Are Universal Credit payments taxable?

The good news for anyone claiming Universal Credit is that income tax is not payable on this benefit.

Other state benefits that are not taxed include Pension Credit, the Winter Fuel Payments and Christmas Bonus.

There is a standard allowance paid to people who claim Universal Credit, with this depending on situations like your age and relationship status.

In total, the list of state benefits which are not taxed are:

  • Attendance Allowance
  • Bereavement support payment
  • Child Benefit (income-based – use the Child Benefit tax calculator to see if you’ll have to pay tax)
  • Child Tax Credit
  • Disability Living Allowance (DLA)
  • free TV licence for over-75s
  • Guardian’s Allowance
  • Housing Benefit
  • Income Support – though you may have to pay tax on Income Support if you’re involved in a strike
  • income-related Employment and Support Allowance (ESA)
  • Industrial Injuries Benefit
  • lump-sum bereavement payments
  • Maternity Allowance
  • Pension Credit
  • Personal Independence Payment (PIP)
  • Severe Disablement Allowance
  • Universal Credit
  • War Widow’s Pension
  • Winter Fuel Payments and Christmas Bonus
  • Working Tax Credit

However, the state benefits which are subject to tax are:

  • Bereavement Allowance (previously Widow’s pension)
  • Carer’s Allowance
  • contribution-based Employment and Support Allowance (ESA)
  • Incapacity Benefit (from the 29th week you get it)
  • Jobseeker’s Allowance (JSA)
  • pensions paid by the Industrial Death Benefit scheme
  • the State Pension
  • Widowed Parent’s Allowance



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