UNIVERSAL Credit is the government's welfare system, which has replaced six benefits with one monthly payment.
Here is everything you need to know about the new benefits system, whether you're eligible to make a claim and how much money you could get.
What is Universal Credit?
Universal Credit is a welfare scheme designed to wrap a number of benefits into a single monthly payment.
It replaces the following benefits:
- Child Tax Credit
- Housing Benefit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Working Tax Credit
This means that instead of getting lots of little benefits, you only receive one monthly payment – or twice monthly for some people in Scotland.
Almost all new claims for benefits will automatically get Universal Credit instead of tax credits.
The only group that can't currently make a new claim are those receiving the Severe Disability Premium who need to go through the old system.
If you already receive any of the six benefits it is replacing, you can't claim Universal Credit as well.
You will be be rolled onto the new system when its introduced in your area, or if you have a change of circumstances.
The deadline for shifting across has been pushed back to December 2024, so you may have a long wait.
If your circumstance do change, for instance if you get a pay rise or move in with a partner, you need to let the Department for Work and Pensions know.
How much will I get?
The payment is made up of a standard allowance and then various additional payments that depend on your circumstances.
The standard allowance has been temporarily boosted by £20 per week because of the coronavirus pandemic.
If you apply between now and September 2021 you will get the higher amount, but this is expected to drop back down again after then.
Here's how the amounts are changing:
- Single, under 25 – £342.72 (equivalent to £4,112.64 a year) – dropping to £251.77 from September 2021.
- Single, 25 or over – £409.89 (equivalent to £4,918.68 a year) – dropping to £317.82 from September 2021.
- Couple, joint claimants both under 25 – £488.59 (equivalent to £5,863.08 a year) – dropping £395.20 from September 2021.
- Couple, joint claimants, one or both 25 or over – £594.04 (equivalent to £7,128.48 a year) – dropping to £498.89 from September 2021.
You have to apply as a couple if you live together – even if you are not married.
You may get additional payments, for instance if you:
- have children
- have a disability or health condition which prevents you from working
- need help paying your rent
You could also get money to help pay your housing costs. How much you are entitled to depends on your age and circumstances.
You can use a benefits calculator to see how much you're likely to get in total.
You are assessed every month and if things change, it might affect how much you are paid for the whole assessment period.
If you start earning more, you'll get a reduction in payments due to something called the taper rate.
Your payment reduces by 63p every pound above your work allowance.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
Apply for an advance – Claimants can get some cash within five days rather than waiting weeks for their first payment. But it's a loan so repayments will be automatically deducted from your future Universal Credit payout.
Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which sends your payment directly to your landlord. You might also be able to change your payments to get them more frequently, or split the payments if you're part of a couple.
Budgeting Advance – You could get help from the Government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are for cases like your cooker breaking down or for help getting a job. It will need repaying through your regular Universal Credit payments, and still have to repay even if you stop claiming.
Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your existing ones aren't enough to cover your rent.
Foodbanks – If you're really hard up and struggling to buy food and toiletries, find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.
The monthly work allowance is £287 for people who get help with housing costs and £503 for those that don't.
As your income increases, your payment will reduce until you’re earning enough to no longer claim Universal Credit – then your payments will be stopped.
If your earnings change from month to month, you may find you need to keep reapplying for Universal Credit.
You can find out exactly how much you can earn without reducing your payments or losing them altogether with our step-by-step guide.
Claiming Universal Credit during the coronavirus pandemic
THE government has made several temporary changes to make it easier for people affected by Covid-19 to claim Universal Credit.
- The Government has announced the Universal Credit standard allowance will be raised by £1,000 a year for the next 12 months.
- In addition, Chancellor Rishi Sunak has suspended the Universal Credit minimum income floor.The minimum income floor is how much the Department for Work and Pensions (DWP) expects you to earn each month and applies to workers who have been self-employed for more than a year.
- Working Tax Credit has also been upped by the same amount, as part of a £7billion boost to the benefit system.
Am I eligible for Universal Credit?
Whether you are eligible will depend on your specific circumstances.
You may be eligible if you meet all of the following criteria:
- you’re on a low income or out of work
- you’re 18 or over (there are some exceptions if you’re 16 to 17)
- you’re under State Pension age (or your partner is)
- you and your partner have £16,000 or less in savings between you
- you live in the UK
Your partner’s income and savings will be taken into account, even if they are not eligible for Universal Credit.
There are other factors that might make you eligible for a claim, for instance if you care for a disabled person, you're in further education or if you've recently had a child.
You can read the full eligibility criteria on the government's website.
Will I be better or worse off under the new system?
The Government claimed around three million working households would see cash gains from Universal Credit.
Treasury officials said a couple with two children where one parent earns £30,000 a year would benefit by £425.
A single parent with one child and no housing costs earning £15,000 a year, will get £170 more, officials claimed.
But the Institute for Fiscal Studies has previously estimated 2.1 million families will lose while 1.8 million will gain.
And there has been controversy over five-week delays where people were left with no benefits and payments structures that leave people out of pocket.
Now, you can get an advance payment to plug some of the gap. Here's our step-by-step guide.
You can also calculate how much you'd be eligible for under the new system and see how it compares with your current benefits here.
New rules mean some claimants can get advance payments to plug the gap when they move across.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
One million people are already receiving it and by the time the system is fully rolled out in 2024, nearly 7 million will be on it.
But there are big problems with the flagship new system – it takes 5 weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the Government to:
- Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
- Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from 63p to 50p, helping at least 4 million families.
- Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email [email protected] to share your story.
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