Universal Credit

Universal Credit and Tax Credits — Universal Credit is a new single monthly payment for people in work or out of work (see page 9 for further details) which will eventually replace Child Tax Credit and Working Tax Credit. If you are already getting Tax Credits, you will continue to get them and will be able to renew your claim until you are transferred on to Universal Credit. The process of transferring everyone from Tax Credits to Universal Credit was initially expected to be completed by October 2017 but the timetable has slipped (see page 9).

Universal Credit was introduced in parts of Greater Manchester and Cheshire on 29 April 2013. From October 2013 it is being gradually introduced in other areas across the UK. Most people getting Tax Credits are not affected at this stage. Even if you live in one of the areas where Universal Credit is introduced, your Tax Credit payments will continue as normal.

Tax Credit awards are given for tax years. The tax year runs from 6 April in one calendar year to 5 April in the next. The amount you receive during the year is an estimate of your likely entitlement. Awards are only finalised after the end of the tax year.

The Tax Credit Office will tell you when you can make a claim for Universal Credit, and stop claiming Tax Credits. You won’t claim both at the same time. It will take more than four years before all Tax Credits claims are stopped so there is no need for concern if you are not contacted in the near future.

Universal Credit is made up of a standard allowance plus other “elements” — for example, for children, childcare, housing and caring. There will also be an element for those with limited capability for work. So the amount you could get will depend on your own circumstances.

Any rise in income of £5,000 or more during the award year is taken into account when finalising tax credit awards. Prior to April 2013 only income rises of £10,000 or more were taken into account.

If you qualify, your monthly payment will cover everyone in your family who qualifies for support. “Family” could mean you as a single person for example, or you might also be claiming for a partner and/or children.

Universal Credit will eventually replace all of the following:

• Tax Credits — both Child Tax Credit and Working Tax Credit;

• Income-based Jobseeker’s Allowance;

• Income-related Employment and Support Allowance;

• Income Support;

• Housing Benefit.

Universal Credit does not replace Child Benefit.

You can find more information about the Universal Credit on the Department for Work and Pensions (DWP) website at: www.dwp.gov.uk/policy/welfare-reform/universal-credit