Universal Credit

When will it take effect?

Piloted in 10 live areas (including Bath) and tested until end of 2014 and thereafter expanded to other areas. 2016 will see all new claimants placed on Universal Credit with the existing claimants being brought onto it by 2017.


What does it replace?

  • Income support
  • Income based jobseekers allowance (JSA)
  • Income related employment and support allowance (ESA)
  • Housing Benefit
  • Child Tax credit
  • Working tax credit
  • (Budgeting loans)


Who is it for?

  • All working age people (18+, though 16/17 can claim in special circumstances) up to pension credit age (rising to 65 by 2018) in or out of work, claiming the benefits listed above
  • Resident in UK
  • Not in education
  • Income and capital must be low enough
  • Claimants must agree to a ‘Claimant Commitment’


Key Features

  • Claims must usually be made, and managed online
  • Paid in arrears and monthly, to one member of a household (if more than one member is claiming)
  • Housing Benefit element is paid direct to the claimant, not the landlord
  • Requires a bank or credit union account
  • Promises that claimants who go into work will be better off – UC does not deduct earnings pound for pound from benefits


How to claim

  • Stage 1 – Online claim (must be completed in one session and so claimant must have all information to hand as outlined on the Universal Credit website). This will determine whether claimant is eligible. If not, they will be directed to further information on benefits and credits they may be able to claim. If eligible, they will be able to submit their claim and this will be their claim date.
  • Jobcentre will then post a decision letter and invite the claimant to an interview (Stage 2).
  • Stage 2 – Interview will require supporting documents (Wage slips/proof of savings/I.D). Claimant will agree to conditions set out in a ‘Claimant Commitment’


How much?

This is complicated as it depends on the individual and the different elements of their claim (eg, JSA + Housing Benefit, or Working Tax Credits, etc). Calculated on a monthly basis by jobcentre as follows:

  1. Takes existing capital (Jobcentre ignores anything under £6,000 but if over £16,000, Universal credit is not available. Anything between will be considered as part of unearned income)
  2. Takes the maximum amount that you are eligible to after consideration of certain elements (Children/Caring responsibilities etc)
  3. Calculates your income (Split as earnings and unearned income)
  4. Deducts income from maximum amount
  5. Adds ‘Transitional Addition’ (a sum given when transferred from an existing benefit to ensure in the short term that your UC payment is not less than a claimant’s existing benefit)
  6. Applies benefit cap

Note:  UC payments may be further reduced in cases of sanctions, recovery for overpayments, to repay debts or if a family member has committed benefit fraud.


How is it paid?

  • The claim itself takes at least five weeks to process.
  • Each month UC will be paid into the claimant’s account (or nominated household member’s account) as one lump sum in arrears (paid for the preceding four week period). Anything that was formally paid as a benefit for which UC is set to replace will form part of this figure (eg, your housing benefit)

Note: There are exceptions regarding payments in exceptional circumstances (ie, if  the individual is in arrears with their rent).


Useful websites and detailed info


(Research by Jamie Braithwaite)