Within the next few years, all working age benefit claimants will be on Universal Credit. It’s quite different, so comes with a few surprises…

Millions have struggled with the Universal Credit (UC) system. Since it was launched, Quids in! has followed claimants sharing the ‘secrets’ they’ve learnt to make it work for them:

1. UC rolls six benefits into one
   UC replaces six previous benefits including child tax credit, housing benefit, income support, income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA), and working tax credit.
   
2. £16,000 savings? Computer says ‘No’
   To qualify for UC we can’t have more than £16,000 in savings – this includes our partner’s savings if we are making a joint claim. If we have £6,000 or more, any payments we are entitled to will be reduced by £4.35 for every £250 we have in savings.
   To make a claim we must also be:
   • on a low income or out of work
   • 18 or over
   • under state pension age (or your partner is)
   • live in the UK
   
3. We get a standard allowance each month
   The standard monthly allowance that claimants are entitled to changes each year. It’s different if we’re under or over 25, and if we’re single or in a couple. We could be entitled to more if we have children, caring duties or housing costs. The latest entitlements are listed here. We can use one of the free calculators online, like the Quids in! one here, to get a rough idea of what we can claim.
   
4. First payment takes five weeks
   It usually takes around five weeks to get our first payment. If this is too long to wait, we can apply for an Advance Payment. This will be repaid out of future UC payments. We can apply via our online Journal or Jobcentre Plus work coach. If we were already claiming Housing Benefit, this continues for a couple of weeks after we’ve made our UC claim.
   
   Quids in! says: “Claimants have regretted taking the Advance because they lose so much every month to repay it. Only take it if there is no other way or at least don’t take the full amount.”
   
   
5. The amount we’re paid can change each month
   UC is based on how much income we get during an ‘assessment period’. An assessment period starts on the day we made our first claim. So for example, if we claimed UC on 16 January, our assessment period would run from 16 January until 15 February. Our second assessment period would run from 16 February until 15 March.
   *In the past, this caused problems for thousands of workers when payday fell on a weekend or bank holiday. The automatic system sometimes made it look like we’d been paid twice in one month – leaving some without benefits for a whole month. Thankfully a recent rule change means if we are paid twice in one month, the system will register one payment in the following ‘assessment period’.
   
   Quids in! says: “Although it’s good news, we can’t assume the system will take care of this. We should make a note in our Journal when two payments come in during one assessment period.”
   
   
6. Our UC Journal is a must-read
   A UC claim is managed online and our UC Journal is where we’ll receive vital information from Jobcentre Plus (ie, the Department of Work and Pensions). Missing an important detail could result in a sanction, ie, our money being cut. Equally, though, letting Jobcentre Plus know what is happening using the Journal can be done any time, 24/7. It’s important to check the Journal often, daily if possible. See the introduction video to Journals here.
   
7. We can earn and still claim UC
   If we are employed, our Universal Credit payment will reduce by 55p for every £1 we earn. (Check if this has changed here.) This is known as the taper rate. There’s no limit to how many hours we can work. If we’ve got a job and a child or someone who depends on us, or we can’t work as much because of an illness, we may qualify for a work allowance. This means there are no deductions from our claim up to a certain amount of earnings. (Check the latest figures here.)
   
8. UC can be reduced if we owe debts
   If we have debts or loans, money can be taken from our UC payments to repay them. It is paid directly to the person or organisation we owe money to. We can discuss these deductions with DWP’s Debt Management team for details on 0800 916 0647, (Textphone: 0800 916 0651). We should speak to Citizens Advice or a debt advice charity if deductions mean we cannot afford to live on our UC payments.
   
9. An emergency loan might be an option
   Most new claimants won’t know we can get a cash loan for emergencies such as buying a new cooker, or money we need for a new job. A Budgeting Advance is available to UC claimants for help with unexpected costs and still needs to be repaid through deductions from UC payments. It is different to an Advance Payment, which is to help get through the initial assessment period.
   
10. We can get help with council tax
    Did you know Universal Credit claimants could reduce their Council Tax by up to 100 per cent? How much depends on things like household income, children, having a job and who we pay Council Tax to. Visit the government website here to find out if the local council offers a Council Tax Reduction – sometimes known as Council Tax Support – and how to apply.