Universal Credit

Universal Credit (UC)
This is a single system of online means-tested support for working age people who are in or out of work.

UC combines
• Income related Job Seekers Allowance (JSA)
• Income related Employment and Support Allowance (ESA)
• Income Support (IS)
• Working Tax Credit (WTC)
• Child Tax Credit (CTC)
• Housing Benefit (HB)

People who might claim UC are those who are:
• Unemployed and seeking work
• Unable to work due to ill health or disability
• Caring for a disabled person
• A lone parent with a child under 5
• Working and either a lone parent or a couple with children
• A single person or a couple without children working but on a low income
• Liable for housing costs such as rent or a mortgage
Note that UC will have a savings limit of £16,000.

The testing of UC started in April 2012, the pathfinder pilot studies started April 2013 and new claims will start from October 2013. The plan is that all existing claimants will be transferred to UC by 2017.

We were given some illustrations as to how work will be made to pay (note all figures are given per month since that is how UC will be paid)
• Single person aged 22 unemployed £508 (inc housing costs)
• As above but working 12 hours/week at min wage £693
• As above but now working 20 hours/week £768

We have the following concerns:
1. UC will be claimed online – many people will find that a challenge
2. UC will be paid monthly to one person in each household and we’re not sure how people used to weekly and fortnightly payments will manage to budget over that period and how they will cope with 4 and 5 week months
3. Housing benefit will be paid to claimants rather than directly to landlords and we could see more cases of rent arrears.
You may by now have realised that major organisational changes will be necessary. Responsibilities will move as follows:
a) Housing Benefit will go from the Local Authority to the DWP
b) Working Tax and Child Tax Credits will go from HMRC to the DWP
c) As far as the Social Fund is concerned, Community Care Grants will be replaced by a new Local Welfare Provision administered by each Local Authority and Crisis Loans will be replaced by

Short Term Benefit Advances administered by the DWP.
So staff will be run down in the Local Authorities and HMRC and be increased in the DWP at the same time that a new and complex IT system is introduced.
Unfortunately the government hasn’t got a good track record for introducing major IT systems but we must hope that this enormous project confounds the pessimists.
Keep watching the Journal for more information – this all we could cope with this time!

To discuss any issues arising from this overview contact Michael Waters on debtsupport@thecrossway.org.uk

14th May 2013 Posted in: Hidden Posts by Stella Jennings 0

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