What is it?
Universal Credit is a new means tested benefit for people of working age; it can be claimed by people who are in a low wage job or out of work.
It has started to replace 6 existing benefits with a single monthly payment. You may be affected if you currently claim or are about to apply for any of these 6 benefits:
- Income-based Jobseeker's Allowance
- Income-related Employment and Support Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
- Housing Benefit.
What are the main changes?
Universal Credit will be paid to the household not to a person. It cannot be claimed if a single person or a couple has savings of £16,000 or more. Partners will make a joint claim for universal credit. If one partner does not meet the conditions they will be ignored for the purposes of calculating the Universal Credit maximum amount, but their savings, income and earnings will still be taken into account.
There are no limits on how many hours a week a person can work if claiming Universal Credit. Instead, the amount will gradually reduce as earnings increase. This is intended to continually support you into work.
The benefit money will be paid monthly rather than weekly into a chosen bank account. If you receive the Housing Benefit element, you'll need to pay your landlord yourself.
Universal Credit will generally be managed online. You will have to apply online before attending a face to face interview.
Universal Credit will be paid by Job Centre Plus and you will need to sign a ‘claimant commitment’. This is a work related requirement which could result in benefit sanctions if it is not met.
The other main change is the introduction of a benefit cap.
What is a benefit cap?
The benefit cap will apply to England, Scotland and Wales and will limit the amount of benefit someone can claim to around £26,000 each year.
The level of the cap is:
- £500 a week for couples (with or without children living with them) or for single adults with children
- £350 a week for single adults who don’t have children, or whose children don’t live with them
This may mean the amount you get for certain benefits will go down to make sure that the total amount you get isn’t more than the cap level. Try the Government’s benefit cap calculator to see if the benefit cap affects you.
Will this affect disabled people?
The Government says that Universal Credit will remove the financial risks for disabled people moving back into employment. Universal Credit will help people with fluctuating conditions who want to work when their condition allows them to, or people who can only work limited hours because of their condition.
Some benefits that support disabled people will be exempt to the benefit cap:
- Working Tax Credit
- Disability Living Allowance (DLA) or Personal Independence Payment (PIP)
- Attendance Allowance
- Industrial Injuries Benefits
- the support component of Employment and Support Allowance (ESA)
However, Carer’s Allowance, Incapacity Benefits and ESA Work Related Activity Group payments are included in the benefits cap.
I think I will need help
As Universal Credit is being run closely by Local Authorities, social landlords and the jobcentre, you will be able to access a greater level of support. This includes IT support and budgeting advice.
If you are worried about paying on time, you may be able to receive an Alternative Payment Agreement to have rent paid straight to your landlord. When you are invited to transfer to Universal Credit, you should let the team know if you are worried.
When is this happening?
The Government has been rolling it out in phases since early 2013, it has most recently been announced that Universal Credit will be rolled out to all Local Authorities and Jobcentres from February 2015.
I need more information and advice
If you would like more information or advice, please contact: