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Government announces changes to its plans for Universal Credit

Friday 11th January 2019

Earlier today, Amber Rudd, the Secretary of State for Work and Pensions announced a number of changes to the government's plans for Universal Credit. The new proposals include:

  • Exempting children born before 6 April 2017 from the two child limit once it is applied to Universal Credit;
  • Delaying the start of the process of managed migration where existing benefit claimants are asked to move onto Universal Credit;
  • Where a Universal Credit claim includes children, making payments to the main carer in the family, which is usually the mother;
  • Making it easier for Universal Credit payments for rent to be paid directly to the landlord;

Mrs Rudd also confirmed that she has no plans to extend the current 4 year freeze on benefit rates once it ends next year.

What is the two child limit?

Currently families with more than two children are exempt from having to claim Universal Credit. However, the government plans to extend Universal Credit to larger families from February. At that point, a rule called the two child limit will apply to some new Universal Credit claims.

Usually a family gets an extra Universal Credit payment known as the child element for each dependent child they have. However, under the two child limit a family will not receive a child element for a third or subsequent child who was born after 6/4/17. Before today's announcement the government had planned that no Universal Credit payments would be made for any third or subsequent child - even if they had been born before April 2017!

Is the government scrapping the further roll out of Universal Credit?

No, it is still likely that many tens of thousands of families will still end up having to claim Universal Credit during 2019.

There are two ways that a family can end up on Universal Credit. These are:

'natural migration'- where someone has a change of circumstances that means they try and make a new claim for a means tested benefit and are told they must claim Universal credit instead. For example because they have separated from their partner or stopped working.

'managed migration'- where a claimant is already getting means tested benefits, has no changes in circumstances but is contacted by the Department for Work and Pensions and asked to claim Universal Credit.

Many thousands of families have already moved onto Universal Credit as a result of a change in their circumstances. This natural migration onto universal Credit will continue as normal.

However the government had originally planned to also start moving large numbers of existing claimants onto Universal Credit via managed migration from July 2019. This will now be delayed, with only a small sample of 10,000 claimants being migrated during 2019. This does not mean managed migration is likely to be abandoned. The government says it still expects to have moved all three million existing claimants of means tested benefits and tax credits onto Universal Credit by the end of 2023.

MORE INFORMATION

Read Contact's comment on the government's changes to Universal Credit.

For advice on what Universal Credit means for your family, please visit our  webpages written by our specialist family finances helpline or call them on 0808 808 3555.