How Universal Credit works

Claims are made by households rather than individuals and the amount awarded depends on the income and circumstances of all the household members. The government claims that it intends to make sure that no one, whose situation has otherwise not changed, ends up worse off when transferred to UC. Additional payments will be given if necessary, so these claimants don’t end up with less than they were getting in benefits before.

A major change is that the new benefit is paid monthly (in arrears) and all benefit payments are made directly to individuals. There is a requirement for claimants to have a bank account or equivalent.

TUC senior policy officer Richard Exell points out that there is actually a five-week wait under UC from April 2015:

• after you apply, there’s a one calendar month assessment period when they work out how much UC you qualify for;

• then a week to administer paying you your benefit;

• so, if you lose your job, the chances are you will have to wait at least five weeks for your first payment.

There is a basic allowance with different rates for single people and couples and lower rates for younger people, much the same as those used in Income Support, Jobseeker’s Allowance and the assessment phase of Employment and Support Allowance (ESA) (see page 46).

There are also additional amounts available for those with:

• a disability;

• caring responsibilities;

• housing costs;

• children; and

• childcare costs.

All of these payments are subject to a Benefit Cap (see page 16).