Universal Credit is a new benefit for people of working age. It is paid both to people who are out of work and to those in employment. It is replacing most of the current means-tested benefits for people of working age.
What benefits is Universal Credit replacing?
- Income support
- Income-based Jobseeker's Allowance
- Income-related Employment and Support Allowance
- Child tax credit
- Working tax credit
- Housing benefit
These are known as the 'legacy benefits'.
Listen to an adviser from our helpline explain what Universal Credit is.
New claims by families with disabled children
In many parts of the UK parents with a disabled child cannot yet claim Universal Credit. However the situation is different if you live in an area where the Universal Credit full service has been introduced.
If you live in a Universal Credit full service area and you try to make a new claim for one of the legacy benefits, you will be asked to claim Universal Credit instead.
This applies to most working age claimants, including parents of disabled children. However, it does not apply if you have three or more dependent children. This is because larger families cannot yet claim Universal Credit and must continue to claim legacy benefits.
For example, a lone parent with two children loses her job and tries to claim income support. Because she lives in a full service area, she will be asked to claim Universal Credit instead. The Universal Credit she will get will also then replace any tax credits or housing benefit that she already received.
However, if that parent had three or more children, she wouldn't be able to claim Universal Credit and would get income support instead.
If someone in a full service area already gets income-related Employment and Support Allowance (ESA) or Jobseeker's Allowance (JSA) but makes a new claim for contributory ESA/JSA, their income related ESA/JSA award will be abolished and a claim for Universal Credit may be needed instead.
To find out whether you live in an area where the Universal Credit full service already applies, use the postcode checker at universalcreditinfo.net
During November 2017 the Universal Credit full service is scheduled to be rolled out to the following jobcentres:
- Arbroath, Forfar and Montrose in Angus
- Birkenhead, Bromborough, Upton and Wallasey in the Wirral
- Birmingham Broad St, Birminghma City, Birmingham South West, Sutton Coldfield, Washwood Heath and Yardley in the West Midlands
- Cinderford and Coleford in the Forest of Dean
- Dewsbury, Huddersfield, Spen Valley in Kirklees
- Irvine, Kilbirnie and Saltcoats in North Ayrshire
- Newton Heath, Manchester Town Hall and Openshaw in Manchester
- St Albans
- Waltham Cross
The government will gradually roll out the full service to the rest of the UK, a process that should be completed by September 2018. Full details of the timetable for the transition to full service in England, Scotland and Wales are available at www.gov.uk.
In Northern Ireland Universal Credit is being rolled out between September 2017 and September 2018. For more details visit www.nidirect.gov.uk/articles/universal-credit
Universal Credit rollout to existing benefits claimants
For the time being, existing claimants who do not try to make a new claim for one of the benefits Universal Credit is replacing will not be affected, even if they live in a full service area.
However, between July 2019 and March 2022 the government intends to move all existing claimants of means-tested benefits and tax credits onto Universal Credit. They have called this process 'managed migration' onto Universal Credit.
Warning- If you live in a Universal Credit area, there is nothing preventing you from opting to move from your existing means-tested benefits onto Universal Credit. However, this may not be a good idea as many families with a disabled child will be worse off under Universal Credit.
In most cases you need to make a claim for Universal Credit online. In order to do this you will first need to set up an online account via the www.gov.uk website.
The Department of Work and Pensions (DWP) won't normally write or phone you about your Universal Credit claim. Instead they will send you messages via your online account, so you will need to check this regularly to see if there is anything they have asked you to do or any information that they have asked you to provide.
Listen to an adviser from our helpline explain how you make a claim for Universal Credit.
The claimant commitment
In order to be paid Universal Credit you will need to sign a 'claimant commitment' - this is an agreement between Jobcentre Plus and you, setting out what steps you need to take in order to be paid Universal Credit.
Some groups of claimants will need to look for work in order to be paid. Others, including many - but not all - full-time carers will be exempt from having to meet any work-related requirements.
Listen to an adviser from Contact a Family's helpline explain more about the claimant commitment.
Getting paid Universal Credit
Universal Credit is normally paid monthly in arrears, and there is usually a wait of at least six weeks before you will get your first payment. If this delay causes you hardship you can ask for a 'short term benefit advance'. This is a discretionary loan that needs to be repaid to the DWP from your future payments.
If you are renting a property then any help you get with rent will be paid to you rather than your landlord. This means that you will have to pass on part of your Universal Credit payments to your landlord to avoid falling into rent arrears.
The calculation starts with a 'maximum amount' of Universal Credit you would get depending on factors such as your family size, caring responsibilities, housing costs and childcare costs.
The amount of Universal Credit you will receive is reduced depending on what other income you have coming in.
- Earnings above certain levels will reduce your Universal Credit award.
- Other types of income will also be deducted from your Universal Credit award unless specifically disregarded (for example, both Disability Living Allowance and child support maintenance are ignored).
- Universal Credit will be reduced if you have capital above £6,000 and cannot normally be paid if your capital is above £16,000
Child disability addition for families with a disabled child
As part of the maximum amount calculation, a child disability addition is included for each dependent child in your family who gets Disability Living Allowance (DLA) (or Personal Independence Payment (PIP))
This is paid at one of two rates. The higher rate of £85.68 will be awarded for a child who:
- Is registered blind.
- Gets the highest rate of DLA care component.
- Gets the daily living component of PIP at the enhanced rate.
All other children on DLA or PIP will qualify for the lower rate of the addition. This will only be £29.10 per week.
Contact a Family is worried that many families with a disabled child will be worse off under Universal Credit. This is particularly likely if you are an out of work family with a disabled child who does not qualify for the higher disability addition.
This is because the lower rate of the child disability addition is set at £29.10 per week. Given that the equivalent additional payment under the existing benefits system is £60.90 per week, this represents a cut of £31.80 per week or just over £1,600 per year. Since the child disability addition is paid for each disabled child, those families with two children on the lower addition could lose twice this amount.
Won't families be transitionally protected to make sure they won't lose out under Universal Credit?
The government has said that it will transitionally protect some existing claimants. However, this will only apply to existing claimants with no changes in their circumstances who are moved onto Universal Credit by the government as part of 'managed migration' between 2019-2022. These families will be able to receive top-up payments to ensure they are no worse off under Universal Credit.
However, if you are someone who has to claim Universal Credit because you have had a change of circumstances and tried to claim one of the legacy benefits, you will not get any transitional protection.
This means that all those families in full service areas claiming Universal Credit between now and July 2019 will not be transitionally protected.