Universal credit – an introduction
Universal Credit is a new simpler, single monthly payment for people looking for work or on a low income. It will replace some of the benefits and tax credits you might be getting now.
What is Universal credit?Universal Credit is a new simpler, single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that you might be getting now.
Universal Credit will replace:
- Income-based Jobseeker's Allowance
- Income-related Employment and Support Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
- Housing Benefit
If you're on a low income, you will probably still get Universal Credit when you first start a new job or increase your part-time hours.
Your Universal Credit won't suddenly be taken away, but steadily withdrawn as your earnings increase. This means that you will be better off for every additional hour you work.
All Universal Credit claimants will have a claimant commitment which clearly sets out your responsibilities and the consequences if you fail to meet them.
What’s different about Universal credit?Universal Credit will be paid in a different way to current benefits:
- it will be paid monthly into an account you choose
- if you and your partner are both eligible, you will get one monthly payment for the household
- if you get help with your rent, this will be included in your monthly payment – you’ll then pay your landlord yourself
Universal Credit will generally be managed online. You can make your claim online, then check on your payments and updates through your online account.
When does Universal credit start?Universal Credit will be introduced in stages between October 2013 and 2017, although it will start for some people in selected areas from April 2013.
April 2013 - Universal Credit begins in selected areas of Oldham, Tameside, Warrington and Wigan.
October 2013 - The national introduction of Universal Credit begins as groups of newly unemployed will be able to make their claim. Claims for existing benefits and credits will be gradually phased out.
From spring 2014 - Universal Credit will expand to accept new claims from people who are in work as claims to tax credits are closed down. Current benefit claimants will be moved onto Universal Credit in a phased approach.
2017 - Universal Credit roll-out complete.
Changes to other benefits in 2013There will be some important changes to a number of other benefits in 2013.
- Disability Living Allowance will be replaced by Personal Independence Payment from 2013.
- Council Tax Benefit will be abolished in April 2013 and replaced by a system of localised support.
- Pension Credit will be amended from October 2014 to include help with eligible rent and dependent children.
- Social Fund is also being reformed to introduce new local assistance.
- A cap on the total amount of benefits that can be claimed will be introduced in April 2013.
If you are interested in how the Universal tax credit work and would like to know more, be sure to get in touch.