How benefits are changing

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Universal Credit is being introduced between now and 2017. Disability Living Allowance is being replaced by Personal Independence Payment, and Council Tax Benefit has been replaced by local Council Tax Reduction Schemes. There are also changes to Housing Benefit and the Social Fund and an overall cap has been introduced to the amount you can get in benefits.

Universal Credit logo

Universal Credit is a new type of financial support for people of working age who are looking for work or on a low income. It's being introduced gradually between April 2013 and 2017.  It will be a simpler, single monthly payment for people in or out of work, which merges together some of the benefits and tax credits that you might be getting now. These are:

  • Income-based Jobseeker's Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credit
  • Working Tax Credit
  • Housing Benefit

Universal Credit will be a single, monthly payment into a bank account you choose.

If you get help with your rent, this will be included in your monthly payment – you’ll then pay your landlord yourself. If you and your partner are both eligible, you will get one monthly payment for the household.

Universal Credit will generally be managed online. You make your claim online, then check on your payments and updates through your online account. 

There are no limits on how many hours a week you can work if you’re claiming Universal Credit. Instead, the amount you’ll get will gradually reduce as you earn more, so you won’t lose all your benefits at once.

Get an estimate of how much Universal Credit you’ll be entitled to by using the benefit calculator from entitledto.co.uk which will estimate all your entitlements including Universal Credit.

Find out more information about these changes and Universal Credit from:

the Money Advice Service

Gov.uk - Univeral Credit


Follow this action plan to make sure you're ready for the introduction of Universal Credit between now and 2017.

Make sure you have a bank account (or similar)

Why?

To receive Universal Credit payments, you will need a bank or building society account, or an account with an alternative provider such as a credit union.

How?

If you don't have an account – or you want to check that the one you have is OK for Universal Credit – read the guide Choosing a bank account for your benefit payment.

Decide whether you need a joint account

Why?

If you live with your partner, and you’re both eligible for Universal Credit, you’ll get a single monthly payment which can be paid into either a joint or an individual account.

How?

Find out what changes you need to make and whether you need a joint account in the guide Joint Universal Credit payments for couples.

Check whether you can set up automated bill payments

Why?

If you get help with your rent, this will be included in your monthly payment - you'll then need to pay your landlord yourself.

How?

If you have a credit union account or a prepaid card account, check that you can set up automated payments for things like rent and bills. If you can't, you should open a basic bank account, or find a different provider.

If you have a Post Office® card account, you won't be able to set up automatic payments so you'll need to use a bank account instead.

Draw up a monthly budget

Why?

Because Universal Credit is paid monthly, you may need to make changes to the way you budget, especially when you move from the old to the new system.

How?

If you're new to budgeting or you want to improve your budgeting skills, read the guide How to budget for a monthly benefit payment.

Use a Budget planner to help you work out how much money you'll have coming in each month and what you need to spend it on.

Get an estimate of how much Universal Credit you’ll be entitled to – including how much better off you’ll be in work – with this calculator on the Policy in Practice website.

Make sure you have access to the internet

Why?

You will be expected to claim Universal Credit and manage your account online.

How?

If you need help getting online, your local library can help you to find a course. Most libraries and Job Centre Plus offices also have computers which are usually free of charge to use.

If you don't have a computer or laptop, find out where to get online for free on the UK Online website.

 

 

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Courtesy of the Money Advice Service
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