What is Universal Credit?

Universal Credit (UC) is a new benefit for people aged between 18and pension credit age including people who are carers, parents, people in work, people looking for work and people who cannot work due to their condition or disability.

UC is a means tested benefit for people who have a low income or no income and whose savings are below £16,000.

The introduction of Universal Credit, and the abolition of the six benefits that it replaces, are enormous changes to the benefits system and will have an impact on most benefit and tax credit claimants who are under pension credit age.

What benefits is UC replacing?

The following benefits will gradually be abolished and replaced by UC. If you or your partner are claiming any of these benefits you will be affected by Universal Credit:

  • Child Tax Credit: A benefit for people with children who are on a low or middle income.
  • Working Tax Credit: A benefit for people who work and are on a low income. 
  • Housing Benefit: A benefit for people who pay rent and are on a low income 
  • Income Support: A benefit for carers or lone parents who are on a low income and either do not work or only do a small amount of work. 
  • Income Related Employment and Support Allowance (ESA): A benefit for people who are not able to work due to their condition or disability. 
  • Income Related Jobseekers Allowance (JSA): A benefit for people who are out of work and are looking for work.

Universal Credit is only replacing these six benefits, other benefits such as Carers Allowance, Personal Independence Payment, Child Disability Living Allowance and Child Benefit are not affected.

When will I be affected?

UC is being introduced gradually and there have already been several delays. The government have said that they do not expect to complete the introduction of UC for all claimants until 2021. They expect UC will be introduced for all new claimants by June 2018ii.

Universal Credit has been introduced in stages to different ‘jobcentre areas’ on different dates, you can use this search to check which jobcentre covers your address http://los.direct.gov.uk/default.aspx?type=1&lang=en.

You can check whether UC has been introduced to your jobcentre area here: https://www.gov.uk/guidance/jobcentres-where-you-can-claim-universal-credit

Pilot stage: Universal Credit for people claiming as Jobseekers

During 2014, 2015 and early 2016 UC was introduced in a very limited way in some parts of the country for people who were making new benefit claims as a 'jobseeker', which means someone who claimed benefits on the basis that they were able to work and were looking for work.

'Full' Universal Credit

From May 2016 Universal Credit was extended, in stages based on Jobcentre areas, to cover all new claimants, and existing benefit claimants who have a change of circumstances which would mean that they have to change the type of benefit that they claim. The government say that Full Universal Credit will be extended to all of England, Wales and Scotland by 2018. To check if a start date has been set for your area yet see: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499616/transition-rollout-schedule-phase-1-to-2-2016.pdf

How will Universal Credit affect me?

UC is replacing several different benefits and is a very complex benefit, so it will affect different people in different ways. We have tried to answer some of the most common questions below.

Will I get the same amount of money as I would have done from existing benefits?

Some people with get more, some the same and some less.  Transitional protection will be given to existing claimants if they will be worse off under UC. This will mean that if, when you move over to UC, your entitlement is lower than your existing benefits your UC will be topped up to the level of the previous benefits. Transitional protection will not be increased if UC rates are increased until your UC entitlement is higher than your transitional protection. Transitional protection will end if you have a change of circumstances such as moving in with a partner or becoming single, starting or stopping work.

Is UC paid in the same way as existing benefits?

No. Universal Credit will be paid monthly in a single payment.  This will include all allowances for living costs for you and your children, childcare costs, housing costs, and extra payments if, for example, you are unable to work due to illness or disability or are caring for someone. If you live with your partner, all of the Universal Credit is paid to one member of the couple. Most new claimants have a seven day “waiting period” after you claim before your entitlement starts.  As UC is paid monthly in arrears you will have to wait at least five weeks before you receive your first payment.  You may be able to claim a short term advance if this will cause you hardship.

Because it is one payment for the month you will be responsible for budgeting and making sure you pay all bills (including rent or mortgage).

I currently get one of the existing benefits will I get UC?

In most cases, yes.  However some of the qualifying criteria are different so not everyone who receives existing benefits will qualify for UC.

I currently get one of the existing benefits, when will I have to claim UC?

If your circumstances do not change you will not be transferred onto UC until 2018 – 2022. If you live in a full UC area and have certain changes of circumstances you will have to transfer onto UC. Examples of changes that would prompt a transfer onto UC include: starting or stopping living with a partner, starting or stopping full time work and starting to pay rent.

Examples

Amy is 21. She has just finished University and is living with her parents and is looking for a job. She lives in a Universal Credit area and is claiming benefits for the first time. Amy claims UC as a jobseeker.

Brian is 45. Universal Credit has not yet been introduced into his area. He has separated from his partner and is now living alone and is not able to work due to his difficulties. He can claim old style benefits which, in his case, are Income Related Employment and Support Allowance and Housing Benefit. He will eventually have to claim UC, which will be after 2018 if his circumstances don’t change before then.

John is 20. He lives in a full Universal Credit area. He gets Personal Independence Payment and attends a residential school. His parents were claiming Child Benefit and Child Tax Credit for him but entitlement to these benefits ended when he turned 20. John has to claim Universal Credit. His PIP is unaffected.

Sandra is 35. She lives in a full Universal Credit area. Sandra works part time and is a lone parent with a 10 year old daughter who has autism and for whom she claims Disability Living Allowance. She also claims Child Tax Credit and Housing Benefit. Sandra has to stop work due to her caring responsibilities. Sandra’s Housing Benefit and Child Tax Credit entitlements end and she now has to claim Universal Credit. She can also claim Carers Allowance alongside the Universal Credit. The Child Disability Living Allowance entitlement continues as it is unaffected by UC.

Anita is 50, she lives in a full Universal Credit area. She has an adult son who has autism who lives locally, she is his full time carer. Anita has been claiming Carers Allowance, Income Support and Housing Benefit. Her son has his disability benefit reassessed due to the introduction of Personal Independence Payment, and he is found not to qualify any more. Anita loses her entitlement to Carers Allowance, Income Support and Housing benefit and has to claim Universal Credit instead.

Colin is 30, he lives in a full Universal Credit area. Colin claims Income Related ESA and Housing Benefit. Colin’s partner Jack moves in with him. Jack has been claiming Income Related Jobseekers Allowance. Colin’s Income Related ESA and Housing benefit and Jack’s Jobseekers Allowance claims will all end and they have to make a couple claim for Universal Credit instead.

Further information

Quick link to this page: www.autism.org.uk/universalcredit

Sources:

https://www.gov.uk/universalcredit

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/480317/proposed_benefit_and_pension_rates_2016_to_2017.pdf

www.citizensadvice.org.uk/universalcredit

i 16/17 year olds will be able to claim in future in some circumstances.

ii https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499726/transition-rollout-schedule-phase-1-to-2-2016.pdf