03 Jun Universal Credit

Universal Credit is the coalition’s new flagship benefits reform, they plan to bring several benefits under one roof and pay it out as one lump sum to the claimant. The idea behind the overhaul is to give more responsibility to the individual claiming and cut costs for the government. So far however Universal Credit has divided opinion across all the parties and public.

The man behind the overhaul is Ian Duncan Smith who says the new system is £600m under budget and is being carefully rolled out stage by stage. However people on the new system have already begun to express their concerns about the changes with rent arrears going up by 60% in the first few months.

What is Universal Credit?

Six working-age benefits will be merged into one. So, those receiving income-based jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit will receive a single universal credit payment.

This will mean big changes to the way those benefits are paid at the moment. Universal credit will be paid once a month, rather than fortnightly or weekly, and will go directly into a bank account. If both you and your partner each receive these benefits, then this will change to a single payment for the household.

In addition, if you receive help in paying your rent at present, this money goes directly to your landlord. Under universal credit, you will receive the money as part of your benefit payment and you will then have to pay your landlord.

How will it affect me?

Well if you currently claim any of the benefits mentioned above then it is likely that the changes will affect you. It may mean that you are responsible for paying your rent and managing your money. As well as this the service will be going digital so if you do not have access to the internet you may need to go to the local library or ask a friend for their internet access.

In terms of money the government estimates that 3.1 million people will be entitled to more benefits, while 2.8 million households will be entitled to less with couples without children typically receiving less money. This means that on average households will gain £16 a month more.

When will Universal Credit come in?

The government aims to phase in Universal Credit across England, Scotland and Wales from February 2015 and for it to be offered in some way by all job centres in Britain by spring 2016.

More claimants will gradually move on to universal credit as and when they have a significant change of circumstances, such as starting a new job or when a child is born.

Then by the end of 2017, the rest of all those eligible in England, Scotland and Wales will be moved on to universal credit, although Mr Duncan Smith has suggested that deadlines may be missed.