Introduction of Universal Credit

The current system of working-age benefits and tax credits is being replaced by Universal Credit which is being phased in over four years between 2013 and 2017.

Starting in April 2013, the Department for Work and Pensions, with HM Revenue and Customs (HMRC) and local authorities, will introduce Universal Credit to claimants within certain areas of the North-West of England.

The coalition government describes the main differences between Universal Credit and the current welfare system as follows:

• Universal Credit will be available to people who are in work and on a low income, as well as to those who are out of work;

• most people will apply online and manage their claim through an online account;

• Universal Credit will be responsive, as people on low incomes move in and out of work, they will get ongoing support, giving people more incentive to work for any period of time that is available;

• most claimants on low incomes will still be paid Universal Credit when they first start a new job or increase their part-time hours;

• claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary;

• support with housing costs will go direct to the claimant as part of their monthly payment.

From April 2013 there is a limited launch in Tameside, Oldham, Wigan and Warrington, known as the Pathfinder stage.

From October 2013 — April 2014, all new claims for out-of-work support will be treated as claims to Universal Credit. No new Jobseeker’s Allowance, Employment and Support Allowance, Income Support and Housing Benefit claims will be accepted. People moving from out-of-work benefits into work will move on to Universal Credit if they are eligible. This is known as natural migration.

From April 2014-late 2015, existing claimants (and their partners and dependants) who will benefit most from the transition will be moved on to Universal Credit. This is known as managed migration. New claims and natural migration will continue. No new claims will be made for Tax Credits.

From the end of 2015-October 2017, transition to the new system is completed under managed migration as the old benefit system winds down. New claims and natural migration will continue.

Further information at: www.dwp.gov.uk/policy/welfare-reform/universal-credit/