Financial health & wellbeing

Universal Credit

Universal Credit

Whether you’re making a new benefit claim or there’s a change in circumstances or to your existing income support, such as housing benefits or working tax credits, you may have been offered to switch to Universal Credit. This new system is being rolled out across the UK, so here is some information about Universal Credit to help you understand how it works.

Depending on where you live in the UK, Universal Credit has been designed to replace:

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

Making a claim

  • Firstly, check to see if you’re eligible to make a claim by using one of the Government’s approved Benefits calculators. These will help you find out what benefits you are entitled to. You will also need to check to see if Universal Credit has been introduced in your area.

  • If Universal Credit is available, you can now make the switch from the older system of benefits known as ‘legacy payments’ to the new system. You may also move on to Universal Credit if there is a change in your circumstances and you notify the DWP.
  • You can only make a claim for Universal Credit online. If you don’t have access to the internet, you can use the internet to submit a claim at any Job Centre.

Payments

  • Claims are now paid as one single monthly amount into your bank account (except in Scotland where it is every two weeks) and are always paid in arrears. Your payment date is the date you submit your claim.
  • If you submit a claim before a job comes to an end, your claim date will default to the day after you finish employment.

Example
You submit a claim on the 14th, but don’t finish your job until a week later, your claim date will be delayed until the 22nd of the month. It may be obvious, but you need to be aware of it as it just adds to the time you may be waiting before your first payment.

Beware: First pay delay

  • When you submit a new claim or a change in circumstances, you could be waiting 4-6 weeks for the first payment. From the day you submit a claim there’s a process time of a full calendar month before the payment is released. You could then be waiting up to seven days for the payment to go through to your bank account. It’s important that you plan for a potential wait of (up to) six weeks (whether it is a new claim or a change from the legacy system).
  • If you are struggling while switching to Universal Credit, you can ask for an advance first payment to cover the first month before you reach your first claim date payment. However, this needs to be paid back within 12 months through monthly deductions off your normal payments.
  • Plan ahead and make sure you submit a claim when you have enough savings or can afford a potential gap in your income.

Change in circumstances

  • You should notify the DWP of any changes in your circumstances as soon as possible. The failure to report any changes within 14 days of them occurring will trigger a one-off fine of £50.00, which will be deducted from your next payment.
  • If you find new employment your Universal Credit payment will be modified or stopped from the first of the month when your employment begins. For example, if your claim date is 17th March and you are starting work on 25th March, your Universal Credit will be changed or stopped from 1st March.
  • If you work while also receiving Universal Credit and you are given extra pay for things like bonuses or overtime, this will affect the amount you receive the following month.
  • How much Universal Credit you get will depend on your earnings. Your Universal Credit payment will reduce gradually as you earn more – for every £1 you earn your payment reduces by 63p. There’s no limit to how many hours you can work.
  • As your income increases, your payment will reduce until you’re earning enough to no longer claim Universal Credit. Your payment will then be stopped. You’ll be told when this happens. If your earnings decrease after this and you want to restart your Universal Credit payment, you’ll need to make a new Universal Credit claim online.

For more information visit Gov.UK  or speak to one of our Helpline Advisors on 08081 311 333