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Universal Credit 101

Universal Credit is here. And it is the single biggest change to the welfare system since it began

There are two key ideas behind Universal Credit (UC). It replaces six benefits with a single, monthly payment. And it is designed so we should be better off in work than just on benefits.

It is likely to affect every working age benefit claimant across the UK. Existing claimants of the benefits below will all move over by the end of 2023, (latest estimate as at May 2019). So too will new claimants who would have received these on the old system:

Housing Benefit
✔ Working Tax Credit
✔ Child Tax Credit
✔ Income Support
✔ Employment and Support Allowance
✔ Jobseekers Allowance*

The biggest challenge facing people moving from other benefits to UC is going to be receiving all the different payments in one go. Whatever mix of the benefits above we qualify for will be merged in to one single, monthly payment.

We will also have to wait at least five weeks for it. Unless we have a budget in place, we might really struggle to make ends meet by the end of the month. Around one in five claimants have had problems with their claim, causing delays of up to three months. (To check you have everything in place to reduce the risk of delays, take our Future-Proof Finance Quiz here.)

The good news is that UC should make us better off in work. The government promises whatever work we do, we’ll lose less benefit than the money we earn, and be better off. This system is sometimes known as ‘tapering’. And before tapering starts many have a ‘work allowance’, a sum of money we can earn before any benefits are taken away.


Key changes to the system

  • Monthly payments in arrears*
  • One payment per couple, if partners are claiming*
  • A bank account or similar is required to receive electronic payments
  • Housing element (previously Housing Benefit) paid to claimant, not landlord*
  • Online management of claim, from applying to managing a ‘Journal’ where DWP keeps in touch with us about job search activity and what they expect us to do

* With some exceptions. In Scotland, for example, couples can make individual claims and payments can be requested fortnightly. Elsewhere partners can request individual payments if domestic abuse is taking place at home. Vulnerable people can request the housing element is paid direct to their landlord.

Read more

We’ve lots more information on the UC, including key details claimants tell us they wish they’d known. The 32-page Quids in! Guide to Universal Credit can be bought from the Quids in! Store for £1.50 here. In some areas, our unique 3 Bs money events can help you prepare for the changes, next steps and more here.

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