In 2013 a new benefit called Universal Credit will gradually replace the current, complex system of working-age benefits and Tax Credits.
What is Universal Credit?
Universal Credit will be means tested for people of working age. It will be one credit for people whatever their employment status.
Its aim is to be simpler than the complex system we have at the moment where separate benefits are administered by different agencies.
From 2013/14 Universal Credit will replace
- Income Support
- Income-based Jobseeker’s Allowance
- Income related Employment support allowance
- Housing benefit
- Child tax credit
- Working tax credit
How Will It All Change?
The change to Universal Credit will affect 5 million tax credit customers, 4 million DWP customers and 3.5 million housing benefit customers.
Oct 2013 – April 2014
500,000 new claims will go onto the new Universal Credit. 500,000 existing claimants will move onto Universal Credit when they have a significant change of circumstances. This is known as natural migration.
April 2014 – late 2015
From the remaining existing claimants, those who will benefit the most will be moved over to Universal Credit.
New claims and natural migration will continue.
End 2015 – Oct 2017
The remaining claimants will be moved to Universal credit as the old benefit system winds down.
What’s Not Included In Universal Credit?
- Council Tax Benefit
- Carer’s Allowance
- Contributory Benefits
- Disability Living Allowance
- Child Benefit
- Social Fund
- Passported Benefits.
- Statutory sick pay, Statutory Maternity Pay, Maternity Allowance, Industrial Injures Disablement Allowance and Bereavement Benefits will remain under the current system.
Claims will be made by households instead of individuals. The amount awarded will depend on income and circumstances of all the members of the household. The Government intends that no one, who’s situation is unchanged, ends up worse off when they are transferred to the new Universal Credit.
It is proposed that the Universal Credit will have a maximum cap on the benefit payments a household can receive.
Universal Credit will be a single payment made monthly to the household.