Universal Credit Q&A

The biggest change to the welfare system for the first time in decades begins with the introduction of Universal Credit, introduced by Iain Duncan Smith, the Work and Pensions Secretary, who says too many people are trapped on benefits. The idea behind Universal Credit is to make work pay. 

What is Universal Credit? 

This is a new single payment for people who are either on low incomes or looking for work. 

It aims to simplify the benefits system by bringing together working age benefits into one payment. 

The driving force behind Universal Credit is to ensure claimants are always better off in work than on benefit. 

How will it work? 

Six working age benefits will be merged into one, these are: Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, Child Tax Credits, Working Tax Credits, Housing Benefit. 

It will be paid once a month, rather than fortnightly or weekly, and will go straight into a bank account. 

Most people will apply online and will manage their claim through an online account. 

A single payment will be made per household – even if for example two people receive benefits at the moment. 

The Government describes Universal Credit as "responsive", because as people move in and out of work they will get ongoing support depending on how much they are earning. 

To ensure this system works properly employers will need to keep the tax office fully up to date so this information can be used to assess how much they are being paid and how much Universal Credit they are entitled to. 

When will the change happen? 

The system is being trialled from Monday 29th April in Ashton-under-Lyne in Tameside in Greater Manchester and will be implemented in stages across the country. 

From October more people will move over to the system if they have a significant change of circumstances, such as starting a new job. 

The full system, which will eventually handle millions of claims and pay billions of pounds, is not expected to be in full operation until 2017. 

What is different? 

Instead of support with housing costs going directly to a landlord these will now be paid to the claimant, as part of their monthly payment, who will need to use it to pay their landlord. Universal Credit does not include payments to people living in supported accommodation, such as accommodation provided by a charity or a county council, as this will be paid separately. 

Claimants will receive one monthly payment rather than weekly or fortnightly payments. 

Universal Credit will be available to people who are in work and on low incomes, as well as those out of work. T