Universal Credit – what’s changing?
Universal Credit is bringing a lot of changes – when you are asked to apply you will need to be ready to do things differently and quickly.
Only newly unemployed single jobseekers are being invited to apply at the moment and other claimants will move over between now and 2021. You can find further detailed information on the Understanding Universal Credit website
The good news is that the sooner you start getting ready the easier it will be.
Here are the main changes and what you need to start thinking about:
Six benefits become one monthly payment
Universal Credit is a single monthly payment to replace all working age means tested benefits
- Job seekers allowance – Income based
- Income Support
- Housing Benefit
- Employment and Support Allowance – Income related
- Working Tax Credit
- Child Tax Credit
Receiving all your benefits in one monthly amount could help you:
- get better deals, e.g. for electricity, gas and phone
- plan ahead, e.g. buy and cook food in bulk
- be better prepared for getting a monthly wage – most employers pay monthly so helps you get used to this
Get ready – if you are used to receiving smaller amounts spread out across the month start practicing planning ahead for a whole month.
You pay rent yourself
Your Universal Credit payment will include any amount payable to you as housing benefit.
You will have to know exactly what your rent is, pay it on time and make sure that your rent money does not get muddled with other household costs.
Make sure you keep all the paperwork for your tenancy in one safe place and keep a copy of any rent statements that your landlord gives you. If you are not sure what your rent statement includes ask your landlord now.
Get ready – Find your paperwork and try and get ahead on your rent payments as your Universal Credit will be paid monthly in arrears.
Paid monthly in arrears
Your Universal Credit payment will be monthly in arrears.
Following the budget in 2017 the delay for first payment will be reduced to 5 weeks. However, it might still take longer, and you need to be prepared for this. Although you can apply for an advance payment to help you manage, this won’t cover everything and you will need to careful plan ahead so that you don’t get behind with important bills like rent, heating, lighting, council tax and TV licence.
Get ready – if you have no savings, try and set aside a small amount each week e.g. 50p a day for one year would give you over £180, £5 a week would give you £260.
Paid to household
A household is your partner and dependent children (that can be counted).
Universal Credit is calculated and paid as a single sum into one account for the whole household based on your combined needs and income.
- You can plan your money and work and needs of your family together
If you are in an abusive relationship and/or there is a real risk of financial harm through being paid jointly you will need to find out if you can get an Alternative Payment Arrangement – these are not automatic and you should get independent advice, e.g. from Citizens Advice.
Get ready – get used to talking about money with your partner. Regularly set aside time to look at your bills and plan ahead.
Based on earnings not hours
Universal credit is adjusted and checked each month and can go up or down
These changes will be based on your needs and your earnings that month – this has advantages:
- Easier to take on temporary work or just a few hours
- Less paperwork – employer reports earnings
- There are no ‘cliff edges’; payment stays with you until you earn more than the maximum assessed for your household needs
- Rapid reclaim – easy to reclaim if you lose work within 6 months of moving off Universal Credit
But – it also means that if earnings paid to you in the previous month are more than your assessed need for Universal Credit you will not receive a payment that month – this can be a particular problem if you are paid more frequently than monthly.
It also means that you agree with the Job Centre that you will keep looking for work until your income is more than the maximum Universal Credit payable. The requirements for this are in your claimant commitment. If you don’t stick to your claimant commitment there can be sanctions which affect payments to your household
Get ready – make sure you are confident about managing your claimant commitment and know all the places in the community where you can get help with finding work.
Universal Credit is claimed and managed online.
Although this puts you more in charge you need to decide how and where you will be able to get online. When the full digital service is rolled out, as well as claiming your Universal Credit online all of your contact with the DWP will be via an online account. You will need to be able to get online, manage an email account and have regular access to the internet.
Get ready – find out the benefits of being online and get more confident with using the internet to find work, manage bills and claims and keep in touch.
There is lots of help in this section of our website.
Know what you are entitled to
The rules around benefits and what can be claimed are changing all the time.
It is hard to keep up but you can check for yourself regularly online or pop into a local advice service – see our service directory under help with benefits.
It is important to keep a check so that you can feel more prepared. For example changes are planned to social housing rent allowances from 2019 which will affect single under 35 households significantly.
Also make sure you update your check whenever there is a change in your circumstances or health or those of the people you live with as you may be eligible for additional support.
Get ready – You can check your benefit entitlement online at www.turn2us.org.uk
Main places to go for online help with Universal Credit
Money Advice Service