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25.10.2016

Changes to Benefits

Changes to the Benefits System – Universal Credit

Universal Credit is now available in nearly all Jobcentres in England, Wales and Scotland. However, it’s being rolled out gradually, so not everyone can claim it straight away.

 

What is Universal Credit?

Universal Credit is a single benefit for people of working age. It replaces the following existing benefits and tax credits:

  • Income Support
  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Housing Benefit
  • Working Tax Credit
  • Child Tax Credit

 

What’s different about Universal Credit?

People in receipt of Universal Credit will get one single payment, paid monthly in arrears, towards their living costs, housing costs and childcare costs if they have children.  If you’re in a couple, only one of you will get the payment for both of you.  If you pay rent, you’ll have to pay it directly to your landlord, housing benefit will no longer be paid directly to your landlord.

Your Universal Credit payment is paid into your bank account.  If you don’t already have a bank account that can make and receive payments you’ll have to set one up.

 

Will you be asked to claim Universal Credit?

At the moment if you live in England, Scotland or Wales and:

  • you’re single
  • you’re newly unemployed
  • you don’t have any dependent children

you will probably be required to make a claim for Universal Credit rather than the existing benefits and tax credits listed above.

If you live in the North West of England and live in a couple or have children, you could also be required to move to Universal Credit.

If you’re already getting any of the six benefits that Universal Credit replaces, you will eventually be moved onto Universal Credit but you don’t have to do anything until you’re contacted about what to do.

If you live in Northern Ireland, Universal Credit is expected to be introduced in 2017. Until then, you can continue to claim existing benefits.

 

Will you be worse off moving onto Universal Credit?

Universal Credit payments will be calculated using different rules to the current benefits.  If this means you are entitled to less money, your amount will be topped up to the same amount you were getting in your old benefits under what is known as Transitional Protection. It means you won’t be worse off on Universal Credit.

However, Transitional Protection will end if:

  • your Universal Credit payment increases to the amount you were getting under your old benefits
  • your Universal Credit entitlement decreases to nothing
  • your circumstances change significantly and your claim is reassessed

 

How long will you have to wait for your first payment?

One of the big differences between Universal Credit payments and the way existing benefit payments are paid is that you will be paid monthly in arrears.  It’s also important to know that you are not paid for the first seven days of your claim.  The DWP also needs time to pay the money into your account.

This all means you might have to wait several weeks for your first payment.  This is expected to be around six weeks on average.

If you think you will miss essential bill payments during this time, talk to people that you might owe money to, like your energy supplier, to discuss what you can do.  They may be able to offer support., like energy grants or lower tariffs.

 

If you’re worried about paying your rent

Making you sure you keep a roof over your head can be a major worry if you have to wait several weeks for your first payment.  It’s important you talk to your landlord straightaway and let them know you are waiting for the money to be paid.

When you know when your Universal Credit payment date will be, set up a Direct Debit or a standing order to pay your rent straightaway.  You may have to change your rent date.

If you’re already in rent arrears talk to a work coach at your local Jobcentre about setting Direct Payments to your landlord.  This means your rent payments will go straight to them until you can get back on your feet again.

The Housing element of your Universal Credit payment may not cover all your housing costs if you have too many bedrooms for your needs or your rent is higher than the amount that you are entitled to.  If you are facing a rent shortfall, talk to your local council about applying for a Discretionary Housing Payment.

 

If you have little or no money coming in

If you will really struggle to manage until your first payment you might be able to apply for a Universal Credit Advance.  You will have to be able to show that you have no other income. Talk to a work coach at your local Jobcentre about how to apply.  The work coach may also be able to put you in touch with local support and help with everyday costs, such as food and energy.

More information can be obtained from the following websites:

https://www.moneyadviceservice.org.uk/en/articles/universal-credit-an-introduction

https://www.gov.uk/universal-credit/overview

https://www.citizensadvice.org.uk/benefits/universal-credit/

If you need more information about the options available to you in dealing with your debt, you can always speak confidentially with one of our friendly advisors on 0808 2085 198.