In 2013 a new benefit called Universal Credit will gradually replace the current, complex system of working-age benefits and Tax Credits.
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What is Universal Credit?
Universal Credit will be means tested for people of working age. It will be one credit for people whatever their employment status.
Its aim is to be simpler than the complex system we have at the moment where separate benefits are administered by different agencies.
From 2013/14 Universal Credit will replace
- Income Support
- Income-based Jobseeker’s Allowance
- Income related Employment support allowance
- Housing benefit
- Child tax credit
- Working tax credit
How Will It All Change?
The change to Universal Credit will affect 5 million tax credit customers, 4 million DWP customers and 3.5 million housing benefit customers.
Oct 2013 – April 2014
500,000 new claims will go onto the new Universal Credit. 500,000 existing claimants will move onto Universal Credit when they have a significant change of circumstances. This is known as natural migration.
April 2014 – late 2015
From the remaining existing claimants, those who will benefit the most will be moved over to Universal Credit.
New claims and natural migration will continue.
End 2015 – Oct 2017
The remaining claimants will be moved to Universal credit as the old benefit system winds down.
What’s Not Included In Universal Credit?
- Council Tax Benefit
- Carer’s Allowance
- Contributory Benefits
- Disability Living Allowance
- Child Benefit
- Social Fund
- Passported Benefits.
- Statutory sick pay, Statutory Maternity Pay, Maternity Allowance, Industrial Injures Disablement Allowance and Bereavement Benefits will remain under the current system.
Amount Awarded
Claims will be made by households instead of individuals. The amount awarded will depend on income and circumstances of all the members of the household. The Government intends that no one, who’s situation is unchanged, ends up worse off when they are transferred to the new Universal Credit.
Maximum Benefit
It is proposed that the Universal Credit will have a maximum cap on the benefit payments a household can receive.
Payment
Universal Credit will be a single payment made monthly to the household.
What is your opinion on Universal Credit? Personally, I’m quite worried about it. Having had no end of problems setting up benefits when my daughter was born, I can’t see this being implemented without a lot of teething problems for families who can’t afford to have disruptions in their incomes. Also the change from weekly to monthly payments will cause budgeting issues for a lot of people, including me.
I can’t see it going smoothly and I’m not looking forward to going monthly payments instead of weekly. But I can see it may have some positives once its all moved across. The housing benefit, tax credits being in one place will save a few weeks back and forth.
I am hoping it will be beneficial to me, I’m a single mum working 16hours a week, I have a mortgage (with my ex) but pay for this by myself , I get child and working tax credits and that’s it – I’m not entitled to housing benefit as its a mortgage so not rented – so my wage basically disappears just to pay for it ! a person in the same situation but renting is £300+ better off a month , gets council tax benefit and alot of other help, my tax credits are £10 a month more instead of the £300 claimed by someone renting which is not counted as income , so gets the council tax benefit) hoping for a fairer system