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Universal Credit

Universal Credit
 

What is it?

Universal Credit is for people of working age, designed to top up your income to a minimum level and help you with your housing costs (rent and some service charges). Universal Credit is for people on a low to moderate income. It does not matter whether you are working or not, or the reason why you are not working.

Universal Credit is replacing these benefits:

  • Housing Benefit
  • Income Support
  • Income-Based Jobseekers Allowance
  • Income-Related Employment and Support Allowance
  • Child Tax Credit
  • Working Tax Credit

IMPORTANT: Universal Credit does not include help with your Council Tax. You must claim Council Tax Support separately, from your local council.

Universal Credit is paid in one lump sum and on a monthly basis, and includes help to pay your rent. This help isn’t paid separately, like Housing Benefit. And usually all the Universal Credit is paid straight to you, so you have to pay your rent out of this money.

Most people will get the same amount of money as they would have under the benefits listed above – it just looks like more because of the benefits all being paid together, including help with your housing costs (rent, mortgage interest and some service charges) and is paid monthly, all at once.

See the Frequently Asked Questions for how to get help with managing the change to Universal Credit.

When is Universal Credit being introduced?

Universal Credit is being rolled out in 3 stages

Step 1 is complete – The Universal Credit ‘live’ (non-digital) service is now available in all areas of Great Britain – but only for certain people.

Whether you will need to claim Universal Credit or instead claim Income Support, Income Based Jobseekers Allowance, Income Related Employment & Support Allowance or Working Tax Credit, Child Tax Credit and Housing Benefit will depend on your circumstances. 

Step 2 has started - The ‘digital’ Universal Credit service is being introduced gradually – between May 2016 and September 2018.

The ‘full’ (digital) Universal Credit service has already started in Oldham from April 2017

Rochdale will begin from February 2018

Manchester from November 2017

Bury from May 2018

If you live in an area which has the ‘full’ digital service, and a change in your circumstances means you need to make a new claim for any of the benefits which are being replaced by Universal Credit – you will make a claim for Universal Credit instead.

Step 3 If you are working age and still getting any of the benefits which are being replaced by Universal Credit then, at some point between 2019 and 2022 you will be asked to make a claim for Universal Credit instead. The DWP call this stage ‘migration’.

 

Who has to claim Universal Credit in the ‘non-digital’ areas?

You are likely to need to make a claim Universal Credit if:

  • Your work has ended or
  • You have just left school, college or university and don’t have a job that will start immediately, or
  • You have been claiming Employment and Support Allowance (ESA) but have been found fit for work so that your ESA award has been terminated or
  • You have had problems with your Employment and Support Allowance (ESA) which mean that your ESA award has been terminated or
  • You have had problems with your Jobseekers Allowance meaning that it has been terminated (not just “sanctioned”) or
  • You have separated from your partner / spouse or
  • You have stopped being a carer for a disabled person
  • You are a lone parent on Income Support, living in an area where families can claim Universal Credit, and your youngest child has turned 5.

In most ‘non-digital’ areas it is only single people without children who will be able to claim initially but there are some areas where couples and people with children can claim.

 

When my area goes ‘digital’ will I have to claim Universal Credit straight away?

You will only need to claim Universal Credit if a change in your circumstances means you would normally need to make a new claim for any of the benefits which are being replaced by Universal Credit.

So, for example, if your Income Related Employment and Support Allowance ends because you have been found fit for work, you will not be able to make to make a new claim for Income Based Jobseekers Allowance – this will have to be Universal Credit instead. If you make a claim for Universal Credit and you have been getting Housing Benefit and / or Child Tax Credit, these will stop too. Even if you appeal the Employment and Support Allowance decision and you win your appeal, if you have claimed Universal Credit you will not be able to go back onto Employment and Support Allowance, but your Universal Credit award may increase and your Claimant Commitment should be amended to reflect that you are no longer claiming as a jobseeker. 

If your Employment and Support Allowance ends because you are found fit for work, contact us for advice. Some people, depending on their circumstances, might be better off if they do not make a new claim for benefit while they are waiting for the first part of the challenging process (known as mandatory reconsideration) to be completed. Once they have the mandatory reconsideration decision, they can lodge an appeal. They can then request payments of their ESA to be reinstated. As long as they have not made a claim for Universal Credit, their ESA can be put back into payment. And if they have provided 'fit' (sick) notes since their ESA ended, they can receive payments covering the whole period. Anyone who decides this is the better option for them should ensure their Housing Benefit claim continues by letting the Housing Benefit office know they have no income until they can get payments of their ESA claim re-started.

Another change which would mean you need to make a claim for Universal Credit would be  if you receive Housing Benefit and you move to another rented house in a different local authority area, which has the ‘digital’ Universal Credit service, you would have to claim Universal Credit instead of making a new claim for Housing Benefit; any Income Support / Income Related Employment and Support Allowance / Income Based Jobseekers Allowance or Tax Credits would also end.

Unlike in the ‘non-digital’ areas, there are no restrictions on who can claim Universal Credit – it does not matter what your circumstances are. The only exception to this is if you have 3 or more children.

If you have 3 or more children you will not be able to make a new claim for Universal Credit before the end of October 2018; instead, you will be told to claim Child Tax Credit and whichever of the following other benefits that would be appropriate for you instead: Housing Benefit; Income Support; Income Related Employment and Support Allowance; Income Based Jobseekers Allowance or Working Tax Credit.

If you are already getting one or more of the benefits which are being replaced by Universal Credit (and you continue to be entitled to these) and you do not have a change in your circumstances that triggers a claim for Universal Credit, you may not need to claim Universal Credit until the ‘migration’ stage, sometime between 2019 and 2022.

However, when the ‘digital’ service comes to your area, if you choose to move onto Universal Credit you can do so – you do not need to wait until a change in your circumstances means you have to. So you could get advice to check if you would be better off on Universal Credit – but seek advice before making any decisions!
 

How can I prepare for Universal Credit?

To prepare for Universal Credit think about:

  • How you would manage to make a claim online – where you can go if you don’t have your own computer.
  • Where you can go to build up your computer skills if you’ve never been online before.
  • How you will manage when the benefits that Universal Credit is replacing are paid to you as one payment on a monthly basis.
  • How you will manage until you have received your first monthly payment (it will probably be a longer gap between payments than you have been used to – and the first payment will be one month and 7 days or one month and 14 days after your claim).
  • How you will manage when you have to pay your rent to your landlord yourself.
  • Opening a bank or credit union account. “Basic” bank accounts don’t allow you to overdraw but still charge for unmet direct debits (if there’s not enough money in the account when they come out). 

See the Frequently Asked Questions for more information and advice on the help you might be able to receive. If you would like to talk through some of these issues, please don’t hesitate to get in touch with us.

 

Benefits Calculator 

Our benefits calculator includes full calculations of Unviersal Credit, so you can see exactly how much you will receive under Universal Credit once you switch. Use the Benefits calculator to find out how Universal Credit will affect you. 

Universal Credit postcode checker 

Not sure when your area will be affected? Use the Universal Credit postcode checker to find out.