Universal Credit & Welfare Reform

Implications for The Prince’s Trust and the young people we

work with

"The Universal Credit will mean that work will pay for the first time, helping to lift people out of worklessness and the endless cycle of benefits. Whilst those people who need our help and support will know they will get it without question“

- Iain Duncan Smith, March 2012

• Too complex• Lack of incentive to work

Why?

Universal Credit – What?

It will combine all of the means tested support for working age adults and children into one benefit:

➔Income support➔Income-based jobseekers allowance➔Income-based employment and support

allowance➔Housing benefit➔Child tax credit➔Working tax credit

Universal

Credit

29 other benefits remain

Universal Credit – What?

Universal Credit - Who?

➔Unemployed➔In low paid work➔A lone parent➔Sick or disabled➔A carer➔Need help with living expenses,

including rent or mortgage

If you are...

...you will claim Universal Credit

Universal Credit – Who?

➔Aged 18 or over➔Resident in Great Britain➔Not in education➔Subject to ‘claimant commitment’➔Savings and capital below £16,000➔Income (or combined income) sufficiently

low

Conditions:

Universal Credit – How much?

➔ a standard allowance➔ an amount for each child➔ an amount for each disabled child➔ an amount for an ill or disabled adult➔ an amount if you are a carer➔ an amount for housing costs➔ an amount for childcare costs

The sum total of the above will give the maximum Universal Credit for an individual or a couple.

However, if the claimant(s) receive(s) any earnings and/or income or has any capital, the maximum amount is likely to be reduced.

Universal Credit – How?

➔ digital by design

➔ monthly assessment and payment

➔ direct payment of housing costs

➔ single payment per household

Universal Credit – Conditionality

Universal Credit – Conditionality

What have you done wrong

1st offence 2nd offence 3rd offence

Failed to apply for or take job

13 weeks 26 weeks 3 years

Failed to be available for work

4 weeks 13 weeks 13 weeks

Failed to undertake specific activity of attend JCP interview

Until comply and 1 wk after

Until comply and 2 wk after

Until comply and 4 wk after

Apr 2013 Apr 2014 Dec 2015 Oct 2017Sep 2013

Pilot

No new JSA, ESA or Income Support claims

Housing Benefit ‘phased out’

Can begin claims if in low-paid work, and no previous tax credits

No new claims for tax credits

No new housing benefit claims

All JSA, ESA and Income Support claims to UC

Leftovers transferred

Universal Credit – When?

Universal Credit – in summary

• There is a single payment which covers unemployment and low employment benefit, children, childcare, caring and housing costs.

• The number of hours worked does not affect entitlement

• As your income increases, your benefit reduces, but you keep 35p of every extra £1 you earn

• You do not need to report changes in your earnings, as there is real-time information from HMRC

• If you are in a couple, you will make a joint claim

• Claims are online and payments are monthly