Universal Credit

As a result of the Welfare Reform Act 2012 the Department for Work and Pensions (DWP) has started to introduce a new benefit called Universal Credit, which is intended to roll the 6 current schemes of income related benefits and tax credits into one single benefit scheme for working age claimants. The intention is that the payment method of Universal Credit will normally be one single monthly payment directly to your bank account. Any help for housing costs such as rent, mortgage interest or service charges, would be included as an element of the single monthly payment.

Whenever universal credit is introduced throughout the UK, the intention is that it will be assessed using the following 7 elements:

• Standard allowance (for single adult or couple)

• Child element for each child

• Disabled child amount, for each disabled child (lower or higher rate)

• Childcare element

• Amount for an ill or disabled adult (lower or higher, depending on limited capability for work or limited capability for work-related activity)

• Carer element

• Housing element.

• A further intention is that Universal Credit will replace:

• Income-based Jobseeker's Allowance

• Income-related Employment and Support Allowance

• Income support

• Support for housing costs in the above 3 benefits

• Child tax credit, and

• Housing benefit (to be replaced by the housing costs element of Universal Credit)

If you receive one of the above benefits the DWP's aim is that you will be moved onto Universal Credit sometime between 2014 and 2017.

Originally, in 2012 the government had announced a plan to launch Universal Credit across the whole of the UK in October 2013, but later had to abandon that idea. At the time of writing this guide, the DWP had withdrawn most of its specific target dates for introduction of the full Universal Credit scheme, except for the final target of UK-wide introduction by 2017. It is therefore not possible to say exactly when most people will experience the introduction of Universal Credit.

A test version of Universal Credit was introduced for newly unemployed single jobseekers only in certain areas of the UK called Universal Credit "pathfinder areas." It was first introduced in Ashtonunder-Lyne and Wigan from 29 April 2013 and then in Warrington and Oldham from 29 July 2013. From October 2013 onwards the government started a programme to roll out the test version of Universal Credit gradually to newly unemployed single jobseekers in 6 further pathfinder areas, which are Hammersmith, Rugby, Inverness, Harrogate, Bath and Shotton. The roll out programme is intended to be complete for those 6 areas by the spring of 2014. Note that the only pathfinder area so far identified in Scotland is Inverness.

The DWP further intends that, at some point after spring 2014 Universal Credit will have expanded to include people who are newly unemployed living elsewhere in the UK and people who are already claiming the benefits that are to be replaced.

The government's longer term plan is that the gradual roll-out of Universal Credit will continue to 2017, by which time the aim is that Universal Credit will have replaced all income related benefits and tax credits for all working age claimants.

As things stand at present, Universal Credit has only been introduced for certain newly unemployed single job seekers in pathfinder areas, which in Scotland means only in Inverness, where it started on 25 November 2013. Even for people in the pathfinder areas, most of the elements of Universal Credit, such as the disability and carer amounts, and the child related elements, have not yet been introduced. Only the standard allowance for a single adult and the housing costs element are used in the current test version of universal credit in the pathfinder areas.

For everyone else in the UK, Universal Credit has not been introduced, and the 5 income related benefits it is intended to replace remain in existence. This is expected to remain so for most people in the UK for some considerable time to come.

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