The Universal Credit, How It Works

If you need specific advice regarding benefits contact your local CAB for independent advice or alternatively your local council benefit advice centre. The dust hasn't yet settled on this particular plan, changes have been suggested and implemented since this feature was originally published. Details were correct at the time of writing but the reader should assume some changes have been made to the Universal Credit stsyem since this feature written.

We cover the first stages of the introduction of this new benefit, outline what the published plans are and try to paint a simplified but realistic picture about the future of benefits in light of the latest changes. We welcome feedback from anyone who may be affected by these changes or that has a view regarding the Universal Credit. Our contact details are at the foot of the page. This link leads to our Universal Jobsmatch feature.

Understanding How Universal Credit Affects You

It is expected that Universal Credit will almost completely replace six of the leading forms of means tested benefits by 2017. At this early stage we expect to see an initial introduction of Universal Credit is being introduced in parts of Cheshire and Manchester towards the end of April and the beginning of May 2013. It is expected to take from four to five years for the system to be rolled out across the whole country.

The welfare system will take some time to unravel but it is the government's declared intention to come up with a new benefits system that will: increase the incentives to work, facilitate the passage from unemployment into work, make the means tested benefit system as easy to understand as possible, decrease the levels of poverty from people in work and reduce the incidence and fraud.

It's widely thought that the Universal Credit first saw the light of day at the Conservative Party Conference in 2010, but the debate over incentivising work for recipients of means tested benefits have been around as long as the welfare state itself. The essence of the system is to allow benefits to be reduced gradually when a claimant moves from benefits to paid employment, making it increasingly impossible for recipients of benefits to be 'worse off'' by being involved in paid employment.

Who Will It Affect?

The drift to the Universal Credit has already begun, it will eventually see the virtual end to: Child Tax Credits, income-based Jobseeker's Allowance and Employment & Support Allowance, Income Support, Working Tax Credits and eventually even Housing Benefit. If you are in receipt of any of these benefits the Universal Credit is likely to have an impact at some level on the benefits that you see receive. It should also be stressed that the DLA is going to be replaced by the PIP.

How Can You Apply

More details will be published here later but we do know the government will be encouraging as many people as possible to apply online.

What’s New With This Benefit?

With any new system there are opportunities for positive change, the government has published the follow list of changes that will be part and parcel of the introduction of this new system:

  • It will be available to people out of work as well as those in employment
  • It is expected that the majority of applicants will apply and manage their claim online
  • There will be an ongoing commitment to support people moving into and out of employment as seamlessly as possible.
  • In general most people in receipt of this benefit will receive only one monthly payment which will be paid into online accounts where ever possible

More Help

There is a strategic document that sets out the current position in the form of Local Support Services Framework which includes some general draft guidance. The direction of the document is set out by the opening Ministerial Foreword:

"The majority of people will make their claim online and payments will be made monthly and direct to the household – reflecting the 75 per cent of people in work who are paid that way.

"Most people on low incomes manage their money well and regularly use the internet to carry out everyday activities such as shopping, banking and carrying out job searches. But the introduction of Universal Credit and Universal Jobmatch provides us with an opportunity to look again at the support households may need in this new environment.

"This includes making sure that claimants who are not yet ready to budget for themselves on a monthly basis, or are unable to use the internet, are protected and assisted onto the new system."

Government Job Search Feedback & Disclaimer

If you find that any links are broken or content out of date let us know.This is a page under constant improvement. We welcome feedback on from users with direct experience of Universal Credit, www.gov.uk/jobsearch.gov or Jobcentres and their services. Please see our disclaimer.

Your Comments

"Is the personal independence payment (PIP) a straight swap for the DLA. Or are there more hoops to jump through?

Carl, Widnes"