A guide to Universal Credit

17 Mar 2016

The following information has been compiled using publicly accessible sources. We can’t give individual benefit advice, however, we do recommend using the benefit helpline and websites listed at the bottom of the page, and speaking directly to your landlord if you have concerns.

What is Universal Credit?

Universal Credit (UC) is a single working age income related payment which will replace the following benefits:

  • Income Support
  • Income Based Job Seeker’s Allowance
  • Housing Benefit
  • Child Tax Credits
  • Working Tax Credit
  • Income Related Employment and Support Allowance

From October 2013, people of working age who want to put in a new claim for a means tested (income based) benefit will have to claim Universal Credit.

Many of the current benefit specific rules will be transferred into the UC. E.g. Claimants of UC who claim on the basis of being too sick to work will be subject to the Work Capability Assessment and conditions where applicable.

Universal Credit will provide a basic allowance to both working and non-working households, and will include additional elements for children, disability, caring responsibilities, housing costs and childcare. 

It will be paid direct to you. At the moment some benefits, such as housing benefit, may be paid straight to your landlord on your behalf. Others are paid weekly. This change will mean you need to get used to managing your money monthly, if you don’t already.

How do I get it?

To qualify for UC you must meet all of the following conditions:

  • be at least 18 years old (there are some exceptions for parents under 18)
  • have not reached the qualifying age for state pension credit
  • be resident in Great Britain (habitual residence and right to reside will apply)
  • not be currently receiving education
  • have accepted a ‘claimant commitment’
  • meet the financial tests

A “Claimant Commitment” sets out your responsibilities about the types of “work related activity” you need to do in order to qualify for benefits. This could include training, or voluntary activity.

Different groups

Claimants will be placed in one of four groups:
a) Full conditionality will apply to jobseeker claimants who will be expected to attend work focused interviews, undertake work preparation activities as well as be available for and actively seeking work

b) Work preparation will apply to those with disabilities or health conditions which do not prevent some engagement in work related activities

c) Work focused interview requirement – people with responsibility for caring for a child over one but under a prescribed age will be expected to participate in activities which will enable them to ‘keep in touch with the labour market’.

d) No conditionality – people with limited capability for work related activity, carers, lone parents or lead carers of a child under one will not be subject to conditionality

What if I don’t do what I’m supposed to do?

A new regime of ‘High Level Sanctions’ will be introduced for claimants who, without good cause, are said to have failed conditionality requirements due to the following:

  • Voluntarily left paid work or reduced paid hours
  • Left work due to misconduct
  • Failed to take a reasonable offer of paid work
  • Failed to apply for a vacancy when required to do so
  • Failed to participate in a Mandatory Work Related Activity or other type of placement
    (claimants must actively participate, attending will not be enough)

Sanctions will lead to a loss of 40-100% of a personal allowance and will usually be set for 91 days in the first instance.

When will Universal Credit apply?

Initially UC will only apply for new claims. Existing benefit/tax credits will be migrated to UC over a period of several years. All claims will be done electronically and claimants will have a UC online account.

Claims can be backdated for one month but only in limited circumstances, for example, because of language or learning difficulties. UC will not be payable for the first three days of a claim. It is proposed that UC will be paid monthly (it is not known if this is 4 weekly or calendar month).

No provision has been made regarding how some benefits such as free school meals, prescriptions and health vouchers etc. will be treated under UC.

Where can I get extra advice?

Speak to your landlord if you’re concerned about UC and how this will affect you. These other sources of information may help.

Benefit Helpline – 0800 882 200 (information enquiry line about benefits for disabled people and their carers)

www.dwp.gov.ukDepartment for Work and Pensions website provides access to consultation documents, policy briefing and updates to legislation and decision makers’ guidance

www.cpag.org.uk – access to information on welfare benefit matters including policy briefings and campaigns/consultations

www.disabilityalliance.orgDisability Rights UK website with factsheets and reviews on welfare reform proposals