Universal Credit is here to stay – here’s what you need to know
Just over a year ago I wrote a blog about Universal Credit, and here is an update, hot on the heels of the Chancellor’s Budget statement. I was waiting for something rabbit-like to appear out of the fiscal hat, which would try and address some of the more obvious failings of Universal Credit. Well, there were some changes, nothing earth-shaking, but improvements nonetheless.
Here is an outline of how UC is looking now.
Universal Credit has been with us in some form or other since 2013, and was constructed to be a one-size-fits-all replacement for six old-style, complex and inconsistent means tested benefits: Jobseeker’s Allowance; Income Support; Employment and Support Allowance; Housing Benefit; Working Tax Credit; and Child Tax Credit. In Department for Work and Pensions jargon, these are now known as the ‘legacy benefits’.
Every Jobcentre in the country will have adopted the ‘Full Service’ version of UC by the end of 2018. This basically means that most people under pension age who need to make a new claim for a means tested benefit, for instance if they need help with living costs, childcare or rent will have to claim Full Service Universal Credit instead of one or more of the benefits listed above.
People who are getting any of the legacy benefits will have to move to Universal Credit at some point – and it could take years to move up to about 3 million people from the old legacy benefit system to the new Universal Credit one.
Most people who make a claim in a full-service area, will have a waiting period of about 5 weeks to get through, during which they will receive no money unless they claim an advance payment. This is paid in the form of a loan, repayable over the next 12 months. After the long wait, a lump sum will paid to them on the same date each calendar month – this will be a ‘standard allowance’ (an amount for basic living expenses), plus extra ‘elements’ where applicable for children, childcare costs, being a carer, being too ill or disabled to work, and for housing costs, both rent and mortgage interest. This means that most claimants will be expected to budget for their needs out of this single monthly payment of UC, plus whatever other income they have. Vulnerable or disabled people will be able to request different arrangements, such as more frequent payments, or having their rent paid directly to their landlord.
Concerns about Universal Credit
Many people are understandably anxious about the way UC is supposed to work. Stories in the press about the rising use of foodbanks in full UC areas are plentiful, along with accounts of rent arrears accruing due to delays in payment, and a growing reluctance on the part of private sector landlords to take on UC claimants. Other people are worried about how they will actually manage to make and maintain their claims – the requirement in a full service area is to both make and manage claims online, with digital communication taking the place of letters.
How to approach Universal Credit
As I have said in my previous blogs, my mantra is always to be prepared. Here are some essential tips for UC survival:
- Remember that UC only affects means tested benefits. If you or your family member gets a contribution based benefit (e.g. contributory ESA) or a non-contribution based benefit (e.g. PIP, DLA or Carer’s Allowance), then these benefits are not affected by the arrival of UC. Some of these benefits will count as income when UC is worked out, but not PIP, DLA or child benefit.
- If you or your family member currently gets a means tested benefit such as income support, income based JSA / ESA, tax credits or housing benefit, then you will not be affected by UC UNLESS your circumstances change significantly – the DWP calls this ‘natural migration’. An example of a change of circumstances triggering UC would be someone who is currently on income-based ESA and housing benefit who moves into a new area, with a different housing benefit authority. In a Full Service UC area, they will now have to claim Universal Credit in order to get any help with their rent (unless they live in a hostel or somewhere similar), as they will not be able to make a new claim for any legacy benefits.
- If you are on legacy benefits, and your circumstances don’t change, then you won’t switch to UC until the DWP decides it is your turn. The Budget put back the timetable for this ‘managed migration’, which is now not expected to start until July 2019, at the absolute earliest. The rules and guidance for this have still not been resolved.
- Try and steer clear of the hype and anxiety around UC. It is not perfect in any way, and its administration is patchy and often inconsistent. However, it’s happening here and is unavoidable, therefore you need to get the following pieces of preparation off your list if you think UC might affect you because you need to make a new claim for benefit or you are on legacy benefits and your circumstances change.
- Make sure that your current benefits are completely sorted and maximised. Use these excellent sites to help you: www.turn2us.org.uk or www.entitledto.co.uk.
- We can check that all your benefits are in good shape. If your benefits are as good as they can be, then this will protect you when it is your turn to claim UC. Let us know if we can help you with this.
- Make sure, if you possibly can, that you have a fully functioning bank account, NI number, email address, mobile phone, and a means of accessing the internet which is reliable and as cheap as possible.
- Try and get a current passport or driving licence, even if you don’t intend to drive anywhere or even leave the country – this will save so much hassle in terms of verifying your identity.
- If you have housing costs, make sure you have an up to date tenancy agreement/mortgage proof.
- Make sure your medical certificates (or sick notes/fit notes) are fully up to date.
- If you care for someone, make sure your appointeeship/Lasting Power of Attorney (LPA) is up to date and easily verifiable.
- Don’t panic – we can help you with your claim, and there are many local advice agencies in our area that are also able to help.
What help can we provide?
Jayne Knights and Amy Swinnerton are experienced at helping clients make claims for Universal Credit. They can also carry out a review of your current benefits, making recommendations that may increase your incomes, and can also assist in preparing for and support you at appeal tribunal hearings.
If you would like to discuss any help or support you need at either of these appeal stages, email the team.