Universal Credit - what's it all about? | believe housing

Universal Credit – what’s it all about?

22 September 2015 - Latest news

Universal Credit is a new government benefit for people of working age. It replaces a number of benefits and credits with a single monthly payment for people who are:

  • On a low income
  • In or out of work
  • Or working flexible hours.

It includes support for the costs of housing, children and childcare, as well as help for disabled people and carers.

Universal Credit is means-tested, which means that anyone who applies will have their income and savings assessed. If they, or a partner, earn over a certain amount of money or have a certain amount of savings they will not qualify.

There will be a basic rate called the standard allowance and extra amounts for people in different circumstances. For example, if they have children, a disability or need help with housing costs.

In County Durham, Universal Credit is being introduced from September 2015 for new applicants of Jobseeker’s Allowance who:

  • Are single
  • Have no dependants
  • Have no mortgage costs.

Why is the system changing?

Universal Credit aims to make the welfare system simpler. It replaces six benefits with a single monthly payment if you are on a low income or out of work, and aims to make it easier for you to move into employment and take short- or part-time work, which may lead to a longer-term job.

What six benefits and credits are transferring to Universal Credit?

The benefits and credits transferring to Universal Credit are:

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

Council Tax Reduction is not transferring to Universal Credit. To make a claim you will need to contact Durham County Council’s Customer Services Team on 03000 260 000.

You can view a full list of the benefits that will be affected by the introduction of Universal Credit here.

Which benefits are not included in Universal Credit?

The following benefits are not included within Universal Credit payments:

  • Council Tax Reduction
  • Child Benefit
  • Contribution-Based Jobseeker’s Allowance
  • Contributory Employment and Support Allowance
  • Statutory Sick Pay
  • Industrial Injuries Disablement Benefit
  • Disability Living Allowance
  • Personal Independence Payment (PIP)
  • Bereavement Benefits
  • Carer’s Allowance
  • Statutory Maternity Pay and Maternity Allowance
  • War Pensions.

Who will be able to claim Universal Credit?

Universal Credit is a ‘working age’ benefit available to people who are on a low income or are out of work.

To claim you must be aged between 18 and 60 years and six months, and satisfy other criteria.

It is being introduced in stages and when it affects you will depend on your personal situation, where you live and any benefits you currently claim. You will be informed by the Department for Work and Pensions (DWP), who are responsible for Universal Credit and not Durham County Council, when you will be affected.

How do I make a claim for Universal Credit and report changes?

Applications for Universal Credit will be made online, and if you have a smart phone a claims app has also been developed.

If you require help completing your online application you should contact your Jobcentre Plus office.

What if I don’t have access to the internet?

Even if you don’t have internet access at home you will still be expected to claim online.

Public internet access is available at Durham County Council’s Customer Access Points, libraries and also in some other community buildings.

Some venues can also give support to help you with the online claims process.

Important things you’ll need before you start your Universal Credit claim

It should take 20 to 40 minutes to complete your application, but this could be longer.

Please be aware that your session will time out and you’ll have to start again if you’re inactive for more than 20 minutes. You cannot save your application and return to it later.

Before making your claim you will need to have the following available:

  • Your postcode
  • Your national insurance number
  • Details of the bank, building society or Credit Union account you would like Universal Credit paid into
  • Your rent agreement (if you have one)
  • Details of your savings or other capital
  • Details of any income that’s not from work (for example an insurance plan)
  • Details of any other benefits you receive.

You may also need these details for people living in your home, like your partner.

How is Universal Credit calculated?

Universal Credit is made up of a standard allowance plus other elements, which depend on your personal circumstances. The elements are:

  • Child element/disabled child additions
  • Childcare element
  • Carer element
  • Limited capability for work element
  • Work-related activity element
  • Housing element.

The monthly Universal Credit payment covers everyone in a family who qualifies for support. This may be:

  • A person claiming for themselves alone
  • A person claiming for themselves and their child or children
  • A couple making a joint claim for themselves
  • A couple making a joint claim for themselves and their child or children.

How will I receive my Universal Credit payment?

Universal Credit will be paid to you monthly so you will need to manage your finances.

The amount you receive is calculated each month and depends on your circumstances and earnings during that time. This is known as an assessment period.

Your first assessment period normally starts seven days after you submit your claim; and the first payment will usually be received one month and 14 days after the claim is submitted. Future payments will be on the same date each month, unless your payday falls on a weekend or a bank holiday, in which case you will be paid on the last working day before that date.

You may be able to claim a short-term advance payment of Universal Credit to tide you over until you receive the first regular payment.

What if I don’t have a bank account?

There are a range of accounts you can use to receive and manage your Universal Credit payments. You may wish to consider an account that allows you to set up Direct Debits. This will make it easier for you to make regular payments, including those to your landlord.

With some accounts you may have to pay extra charges, for example to use an overdraft facility.

You may wish to consider one of the following:

Why is Universal Credit paid monthly?

Universal Credit is paid monthly to reflect working life, with 75% of all employees receiving their wages on this basis. The government believes this will help people manage their money better when they move into monthly paid work.

If you need help to manage your monthly payments or face difficulties moving from your benefits to Universal Credit you can access personal budgeting support, from an agency such as the Money Advice Service.

In exceptional circumstances different arrangements can be made, such as twice monthly payments or payments direct to your landlord.

If you require help with managing your money, you should contact Jobcentre Plus.

Both my partner and I live together and receive benefits. Will we receive two payments of Universal Credit?

Couples will usually receive one payment, which will be paid into a suitable account of your choice. This could be a joint account or a single account in either your or your partner’s name. You and your partner will need to decide which account to use and manage your money together.

Will Universal Credit include help towards paying rent?

Universal Credit is paid monthly and may include money towards housing costs, known as the ‘Housing Element’. This may not cover all of your rent so you are expected to make up the shortfall.

IMPORTANT: It is your responsibility to pay the full rent amount to your landlord on time.

What about service charges?

Universal Credit may include an amount towards service charges that you need to pay your landlord. Your landlord will be able to tell you which charges will be covered within Universal Credit.

Can I have my rent paid direct to my landlord?

You will be responsible for paying your rent to your landlord.

Only under certain circumstances can your rent be paid direct to your landlord on your behalf; for example:

  • Where you owe more than two months’ full rent
  • Or certain circumstances mean you may need help to manage your money.

You will need to discuss your circumstances with Jobcentre Plus if you are having difficulties.

Will money be deducted from my Universal Credit if I am behind with my rent?

Yes, up to 20% can be deducted and paid to your landlord for rent arrears. If you have other deductions already it may be lower.

You can ask for a reduced level of deduction if this causes you financial hardship. Your landlord may be able to support you making this request.

Will I need to do anything in return for receiving Universal Credit?

In return for Universal Credit, you will have to accept a ‘claimant commitment’ and agree to complete certain tasks. These will depend on your health, responsibilities at home and how much help you need to find work or to work more hours. This will also apply to your partner. You will also have to attend interviews at Jobcentre Plus.

If your income is above the identified threshold you will not have to agree to the claimant commitment.

What if I do not complete the tasks agreed in my claimant commitment?

If you or your partner do not complete the tasks and can’t give a good reason to explain why, your benefit will be reduced or stopped.

How will I be supported into work?

There are many different things that you can do to find work. Jobcentre Plus will help you to identify the necessary steps that you can take, which may form part of your claimant commitment (for example registering with a recruitment agency, going on training courses, or writing a CV).

You can also start searching for work online through Universal Jobmatch.

What happens when I start work?

You will need to tell the DWP if you start working on 0345 600 0723 or 0845 600 0723.

They will check whether your new employer is registered on the Pay As You Earn (PAYE) in real time system through Her Majesty’s Revenue and Customs (HMRC). This system shares information about what you earn with Universal Credit.

If your employer doesn’t use this system you will need to ring the Universal Credit helpline to tell them your earnings yourself to make sure you receive the right amount.

There are no limits to the number of hours you can work a week if you receive Universal Credit. Instead, the amount you receive will go down as your take home pay goes up, so you won’t lose all your benefits at once if you’re on a low income.

Can I get hardship or advance payments on Universal Credit?

You can ask to receive an advance payment before your first Universal Credit payment is made. However, your ongoing payments will then be reduced in order to pay this money back.

If your Universal Credit is reduced as a result of a sanction, you can ask for a hardship payment. Contact the Universal Credit Helpline or your local Jobcentre Plus office.

Will I receive less money on Universal Credit?

Most households will either receive more under Universal Credit, or the same amount as they do now.

If you are moved to Universal Credit but your circumstances have not changed, you will be entitled to transitional protection. This means that you will not receive less than you did under your old benefit or credits. This protection is not permanent – if your circumstances change your income will no longer be guaranteed.

What should I do to prepare for Universal Credit?

  • Open a bank account by considering the benefit of Direct Debit/standing order facilities, but be aware of charges and seek advice first
  • Find out where you can use the internet
  • Think about how you will manage your money when your income is paid to you each calendar month, and consider paying a little extra rent now so that when you are paid a month in arrears, you have a buffer in your account
  • Think about increasing your working hours/pay
  • Think about how much living space you need – the spare room subsidy/under-occupancy charge still applies to Universal Credit
  • Have a benefit check before Universal Credit is introduced.

Where can I get further support?

  • The DWP can explain everything you need to know about Universal Credit, or alternatively you can call the Universal Credit Helpline on 0345 600 0723 or Textphone 0345 600 0743
  • Jobcentre Plus can offer advise on how you will be affected, arrange help to complete your online application and organise support to manage your household budget
  • The Money Advice Service provides free, independent advice to help you to plan a budget, save and make the most of your money
  • Durham County Council’s Customer Services Team can advise you on how Universal Credit is being rolled out, how it may affect you and where you can find internet access by calling 03000 260 000
  • Durham County Council’s Welfare Rights Team work with a variety of organisations to ensure that customers receive their full benefit entitlement by
    • Providing information on what benefits you might be entitled to, how to claim and checking you are receiving the right amount of benefit
    • Advising you on what will happen if your circumstances change
    • Giving you advice on how to appeal against a decision on your claim
  • Durham County Council Housing Solutions Service has trained advisers who can offer assistance on housing issues, including legislation, financial support, support with addiction, employment, applying for a home, supported living;, floating support, and private rented accommodation
  • Citizens Advice County Durham provides free, confidential, independent and impartial advice on a wide range of issues including benefits, debt and money, employment, education and housing.

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