A Guide to Universal Credit

What is Universal Credit?

Universal Credit is the replacement of most of the current benefit system with one single payment which will include money for each family member, as well as their housing costs.  Universal Credit will be paid monthly in a lump sum, and will be paid to those in and out of work.

Which benefits will it replace?

  • Income Support (both for disabled people and parents)
  • Income-based Jobseekers Allowance
  • Income-based Employment & Support Allowance
  • Incapacity Benefit
  • Housing Benefit
  • Child Tax Credits
  • Working Tax Credits

Which benefits will remain?

  • Attendance Allowance
  • Carer’s Allowance
  • Child Benefit
  • Contributory Jobseekers and Employment & Support Allowance
  • Guardian’s Allowance
  • Pension Credit
  • Statutory Sick Pay
  • Statutory Maternity, Paternity and Adoption Pay
  • Winter Fuel Payments
  • Disability Living Allowance (until it becomes the Personal Independence Payment)

How is it different to the current system?

At present the amount of money someone receives while in work is determined by the number of hours they work. Under Universal Credit, it will no longer be based on the number of hours they work, but the amount of money they make.

However, the government may expect claimants to increase the amount of money they earn by applying conditions to their claim.  This means that they could be sanctioned or have their benefits reduced if they do not increase the amount of money they earn by increasing their hours or getting a better paid job.

When will claimants be affected?

The introduction of Universal Credit is being phased in between 2013 and 2017. For a full timetable of roll out click here.

For a more detailed guide to Universal Credit see the Citizens Advice website.

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