What is Universal Credit and am I eligible for a claim?

UNIVERSAL Credit has become a controversial policy of the Conservative Government since they came into power in 2010.

Critics argue it leaves claimants worse off as supporters say it's simpler than the previous system. Here's all you need to know about the new benefit scheme.

What is Universal Credit?

Universal Credit is a new welfare scheme designed to wrap a number of benefits into a single monthly payment.

Millions were expected to start being moved over to Universal Credit from their existing benefits in late 2017, and the scheme was piloted in some areas of the UK.

A national rollout was delayed in October, when it was revealed some Brits could get paid an extra two weeks to stop them going into debt when going on to the new system.

On January 5, 2019, Work and Pensions Secretary Amber Rudd announced she is to ditch a Commons vote on plans to move all existing claimants of relevant benefits on to the new all-in-one payment.

Instead she plans to seek approval to move just 10,000 claimants on to UC to monitor the way the new system works.

The majority of users may not go on to the new system until December 2023.

Up to ten thousand Brits on the old benefits system will start be moved onto Universal Credit summer 2019.

Universal Credit replaces the following benefits:

  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)
  • Working Tax Credit

The government claims around three million working households would see cash gains from Universal Credit.

Treasury officials said a couple with two children where one parent earns £30,000 a year would benefit by £425.

A single parent with one child and no housing costs earning £15,000 a year will get £170 more, officials claimed.

If you receive any of these benefits, you can’t claim Universal Credit at the same time – you will be moved to Universal Credit when it is introduced in your area.

Whether you can claim Universal Credit depends on where you live and your circumstances.

Currently, Universal Credit is mainly claimed by the unemployed, or those on a low income.

If you are unhappy with your Universal Credit decision and want to appeal it,  you can click here to find out how to do that.

If you currently receive any of these benefits, you can’t claim Universal Credit at the same time

What changes have been introduced?

From April 2018, those already on Housing Benefit continued to receive their award for the first two weeks of their Universal Credit claim – and this did not have to be returned.

The government also made it easier for claimants to have the housing element of their award paid directly to their landlord.

It was also announced that the limit on child benefit will no longer apply to families who adopt children or look after relatives.

The change will bring a boost of £231.67 per child for every Universal Credit claimant affected.

Currently, a family can only claim cash for their first two children – not for the third or any more – but if a family with two children adopt another, they are entitled to an increase in benefits.

Former Work and Pensions Secretary Esther McVey announced that from April 2018, the same rule will apply to all families with adopted kids – even if they adopted a child first, then had a biological third child later.

The rule change also applies to people who look after their relatives' children, but it will not apply to stepchildren as long as they are still living with one of their biological parents.

What is the taper rate?

The taper rate – the amount of money that's deducted from your benefits when you earn over a certain amount – was lowered in November from 65 per cent to 63 per cent.

Now, workers will lose just 63p – 2p less – for every pound they earn above their work allowance.

The work allowance is set at £198 a month – or £409 a month if you don't receive help with housing costs – meaning it amounts to either £2,376 or £4,908 a year.

Who introduced Universal Credit?

Former Work and Pensions Secretary Iain Duncan-Smith announced the introduction of a Universal Credit in 2010.

It is designed to simplify the benefits system and improve work incentives – making it the landmark policy of his time in government.

But the programme was cut by around £3.4billion under Chancellor George Osborne five years later, which led to Duncan-Smith dramatically quitting his post.

David Gauke, who led the DWP  at the time, announced a major expansion of the flagship welfare programme.

How have MPs reacted to the Universal Credit?

In his Spring Statement 2018, Philip Hammond ignored pleas to reverse Universal Credit changes.

Iain Duncan-Smith, who lead the fight against the cuts after resigning from the Cabinet over them in March, welcomed the move.

The former Tory leader told The Sun: “Putting money back into Universal Credit is a very welcome U-turn, and I’m very pleased Theresa and Philip have listened to us.

“It is a very good start to make work pay again.”

In September 2017 as the plans were being rolled out Tory rebels called for a halt.

Rebels feared the change could be as damaging to the party as the Poll Tax, reporting concerns that claimants were missing out on money when they switched from their existing benefit to the new one.

But defiant Theresa May insisted the roll out of the credit would continue as it was the "right thing to do."

Shadow Chancellor John McDonnell suggested it should go entirely, declaring: "The reforms haven't worked."

On October 8, 2018, it was revealed that ministers were aware that Universal Credit changes would leave poor families £200 worse off.

The Institute for Fiscal Studies has previously estimated 2.1 million families will lose while 1.8 million will gain.

MPs have blasted the DWP for leaving claimants "swimming against a tide of unmanageable repayments" which "pile debt upon debt, trapping people in a downward spiral of debt and hardship".

Currently, Brits shifts onto the new system have to wait five weeks before they get their first payment.

The DWP offers advance payments, but then slashes payments for the rest of the year as claimants have to pay the advance back.

Mp Frank Field has said the Government has been "irresponsible" to not brand this a "loan".

What to do if you have problems claiming Universal Credit

IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:

Apply for an advance – Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit pay out.

Alternative Payment Arrangements – If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.

Budgeting Advance – You may be able to get help from the government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.

Cut your Council Tax – You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your payments aren't enough to cover your rent.

Foodbanks – If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the Trussell Trust website.

What did a report say about who would be hit hardest by Universal Credit?

On October 14, 2018, a new report revealed struggling homeowners, working single parents and the disabled would be among those hit hardest under the new benefits system unless urgent action was taken in the Budget.

A comprehensive analysis of the impact of UC found that almost two in five households receiving benefits would lose an average of £52 per week.

The report, compiled by the Policy in Practice consultancy claims those affected would include around a million homeowners currently receiving tax credits, 750,000 households on disability benefit and some 600,000 working single parents.

New figures have also found that the under-30s have been hit hardest by more than 70 per cent of penalties under the Government's controversial new system.

In his 2018 Budget, Hammond included a multi-billion pound package to increase the work allowance by £1000 – meaning 2.4 million Brits on benefits will be able to keep £630 extra of their cash. That will come into place from April next year.

Ministers also revealed they will slash the rate that debt can be taken off payments from 40 per cent to 30 per cent – but again not until next October.

They will extend the period of time you can pay off debts as well from 12 to 16 months, but none of that help will come until October 2021.

A loophole in the system has allowed fraudsters to apply online and claim thousands of pounds for children, without needing to provide any proof.

What is The Sun's 'Make Universal Credit Work' campaign?

The Sun launched its Make Universal Credit Work campaign on December 17, 2018.

The campaign demands that the government acts now to fix its flagship welfare reform before it’s too late.

The Sun is supporting the new benefits system, which is much simpler than its predecessor.

However, it is still a system riddled with flaws leaving hard-working Brits without money through no fault of their own.

The government must act NOW to fix these problems, here’s what we demand:

  • Get paid faster: The government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7 million from being pushed into debt.
  • Keep more of what you earn: The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4 million families.
  • Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.

Our calls have been supported by campaigners, debt charities and top MPs including Ian Duncan Smith, Damian Green and Frank Field.

Industry experts have said our demands are "spot on" and urged ministers to act.

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