universal credit 2020

This is a short blog with a quick update in relation to Universal Credit. The roll-out of Universal Credit(U.C) has been delayed by an additional nine months. This appears to be as a result of claimants being reluctant to switch to U.C. The decision to delay the roll out is expected to cost an addtitonal £500m to the cost of the scheme and means it will now be implemented in 2024, seven years after it was originally planned to be completed!

Universal Credit, replaces the six existing or legacy benefit payments as they are called. this has caused claimants may financial difficulties including claimants having to wait at least five weeks or longer to receive money in most cases.

The six existing benefits are:

  • Housing Benefit;
  • Income-based Job Seekers’ Allowance;
  • Income-related Employment and Support Allowance;
  • Income Support;
  • Child Tax Credits; and Working Tax Credits.

This has led to people falling into debt and some having to resort to foodbanks as a result. Claimants in receipt of the legacy benefits are switched to Universal Credit if there is a change in their circumstances.

What triggers a change? Change in circumstance can include:

  • You change your address
  • you start or stop getting Income Support or Income Based Jobseekers Allowance
    your income and/or capital changes
  • the income and/or capital of your children or other people in your household changes
  • anyone joins or leaves your household
  • you or your partner go into hospital for more than four weeks or long term care in a nursing home.

The Department for Work and Pensions (DWP) said the reason for the delay is because the number of people moving on to the new system was “lower than forecast”
In an recent article in ‘Inside Housing’ Neil Couling, the senior responsible owner for Universal Credit, was reportedlly filmed telling colleagues: “We’ve got a lot of anecdotal evidence of people being scared to come to Universal Credit.
He also stated that ”I have to keep going to the destination or you have to set me a different destination, because there’s 2.6 million people, and if we get something wrong we could disrupt their lives and they’ve got no alternative. There’s no alternative bank they can go to get help. We are the payer of last resort.”

This appears worrying as it appears to mean that there is no going back in relation to the rollout as the Government has invested so much already in the roll out and is unlikely to acknowledge that UC is not working.

I know of a client who recently made a claim for UC she earns a low income and reported a change in her circumstances, whilst waiting for her payment she took an advance payment and the only option of repayment offered to her was £75.00 per month as the money was to be re-paid over a six month period and no other payment arrangement was offered to her. This is despite the fact that the option to repay over a 12 month period is available. she was not asked to complete a financial assessment to see if the repayment was affordable. In her circumstances she felt she has no option as she was still liable to contribute to her rent. The repayment of £75.00 per month is a large sum of money for someone to repay who is already on a low income and struggling.

UC advance payment

What is an advance payment?

An advance payment is a loan that you can ask for to help you through the five week wait for your first Universal Credit payment.

Please remember the DWP(Department of Work and Pensions) shouldn’t ask you to pay the advanced payment sooner than you can afford to repay it. Please tell your work coach if the repayments will cause you hardship.
A reminder of the amount of UC claimants receive please see below:

  • Single claimant aged under 25: £251.77 per month
  • Single claimant aged 25 or over: £317.82 per month
  • Joint claimants both aged under 25: £395.20 per month
  • Joint claimants either aged 25 or over: £498.89 per month

There are additional elements that can be added to your basic allowance. Your household may qualify for more than one of these:

  • Child element
  • Childcare costs element
  • Limited capability for work element (abolished for most new claimants from 3 April 2017)
  • Limited capability for work-related activity element (LCWRA element)
    Carer element
  • Housing costs elements

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