Universal credit - how it will work

mrs_motivated

I hope this will be useful info for people on benefits.

The Government’s welfare reforms will introduce a new Universal Credit which will provide both in and out of work support for working-age claimants.

The Universal Credit will replace Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance.

It will NOT include Disability Living Allowance (DLA) or Carer’s Allowance. Measures in the Welfare Reform Bill will replace DLA with Personal Independence Payments, which will also be excluded from the Credit.

For most households Universal Credit will be paid in arrears as a single monthly payment, aiming to replicate the experience of most people in work. Where a couple make a joint claim they will have to decide who receives the single payment.



This raises a number of issues

1. How do people survive for the first month? As the payment will be monthly in ARREARS
2. Payment to one person in the family unit? This will surely lead to trouble for many
3. What happens when one component of the benefit changes? Will all be suspended until it is sorted.

Jumbo_Cod

Our housing/council tax benefits are paid in arrears by one month but it's no big deal because the housing association knows that's how it works and waits until the funds are credited. As for the other funds it might make a problem for people making initial claims but a month isn't that long in the grand scheme of things.

Right now thanks to my arrival we've had income support suspended for 1 month already! And we finally got the new form to make a joint-claim today. It'll be backdated to my arrival in the UK and won't change much but still my wife has all payments suspended since early June! Arghhhhhhhhhhhh

[Deleted User]

we get a joint claim for IS paid to me,and for around 3 years its been paid fortnightly,when they changed from weekly they gave us the option of a loan to be repaid over 6 weeks

BigAunty

mrs_motivated wrote: »

1. How do people survive for the first month? As the payment will be monthly in ARREARS

Perhaps the same resourceful methods used by those starting employment who are routinely paid this way.

mrs_motivated wrote: »

2.Payment to one person in the family unit? This will surely lead to trouble for many

It's supposed to be simplifying the system, so that makes sense. The govt shouldn't have to micromanage every benefit household income to the nth degree.

Jumbo_Cod

I fail to see how implementing a "one-size-fits-all" credit to millions of people with different situations simplifies things.

The government shouldn't micromanage, but it makes sense that if someone needs benefits/credits for different purposes they are evaluated differently based on their needs.

Universal credit makes no sense!

mrs_motivated

I appreciate the points made and as someone whose only benefit ever was child benefit can see where you are coming from, however, the loans mentioned will be at the local authorities discretion and for many who for whatever reason are totally reliable on benefits a month with no money will be very difficult and many will fall victim to loan sharks or these legit loans with ridiculous interest rates.

Thanks for your comments though, it's always interesting to see how people view things differently

Jumbo_Cod

I don't understand how loan sharks will prey on people. It's only one month. People don't jump out of a vacuum and suddenly need the government to support them from day one.

Anybody can wait 30 days for benefits to be paid.

Also loan sharks wouldn't be so keen to lend to destitute people, unless they have a paycheck guaranteed in the future to hold as collateral.

mrs_motivated

I work in a deprived community and see this already on a daily basis. So my assumptions re loan sharks are based on life experience and the high number of people I meet in this situation.

Jumbo_Cod

I live in a deprived community and haven't heard of people doing this in regard to benefits being paid one month in arrears. Is this a common complaint, that the people you meet must take out loans from loan sharks in order to cover their living expenses before their benefit claims come in?

mrs_motivated

A lot of the problem is poor money management and budgeting, but yes I assure you it is very common. Unfortunately it becomes a spiral of debt and these people with perhaps young children and previous credit commitments will not manage a month without money.

The bedroom tax and the reduction in council tax benefit will make it worse. 20 per cent of people are under occupying on my estate and if they are single on jsa have approx £70 per week when they have to find £22 out of that for rent, it doesn't leave much for food,gas, electric, tv licence etc.

Please understand, I agree that the benefit system needs an over haul and simplifying. However, the way it is happening will cause chaos. The only light point I can see is the IT system been created to deal with this will never be ready in time, even if the new call centre in Warrington who will deal with all benefits across the country is!

Building social housing and creating jobs needs to go hand in hand with welfare reform. Perhaps starting with the contract for the afore mentioned IT system been let to a company operating in the uk.

Anyway , apologies for rambling and going off topic, I certainly meant no offence to anyone and just wanted folk to be aware of the changes.

Jumbo_Cod

I understand.

Coming from The States I have to say that in comparison..the UK benefits system is extremely simple and straightforward! (It does help that there are generally only one set of rules for the entire country...as opposed to 50 state laws then another several thousand municipal ones).

I know it's derided as being inefficient and crazy (especially around renewal time) but in comparison I don't think people here in The UK really understand how good they have it. The fact that you can get your rent paid for, get income support, and pay no taxes whilst only working 16 hours a week is extremely generous.

As for people having a crunch trying to meet expenses, what about "crises loans" from the council? My wife received one ten years ago due to a rather crazy situation.