What is Universal Credit and how it can affect you?
The government is in the process of rolling out massive changes to Welfare Benefits which will affect the money you receive so it’s important. It also means that you will be responsible for paying your rent, rather than the local council paying Irvine Housing Association. Universal credit will replace:
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
- Housing Benefit
- Budgeting Loans
If you’re already on benefits or you are thinking about applying for benefits in the future then it is important you know what this means.
Some people might have even started on Universal Credit. If you find out you are moving to Universal Credit, let us know as soon as you can. We can help you set up the right payments so you have control of your money and get all of the correct help and advice you need so you don’t fall into debt.
What is Universal Credit?
Universal Credit is a monthly payment to people of working age who are on a low income or out of work.
The reason it has been set up is to make it easier to receive benefits whatever your situation, especially if circumstances change.
For example if you are unemployed and get a small part-time job, your benefits won’t just stop. Instead, your Universal Credit will go down as your earnings go up.
It also means you don’t have to swap from benefit to benefit to suit your situation so it saves a lot of time and worry! You won’t be taxed on your Universal Credit money either. Still not sure? Here’s a simple video from the Government to explain the process a little bit more.
Can I get Universal Credit?
If you are thinking about making a new benefit claim, it is likely you will be put on Universal Credit. To make a claim you have to:
- Be 18 or over
- Live in the UK
- Not be in education
- Be under the Pension Credit age
- Have less than £16,000 savings in your name
How much Universal Credit will I get?
This depends on what your income is. Universal Credit is means-tested so they will assess how much you earn from your job (if any) and if you have any savings. If you have savings of more than £6,000 this will count as a monthly income and they will calculate that before they work out how much Universal Credit to give you.
What if I’m already on benefits?
For now, Universal Credit mostly only affects new benefit claims such as people losing their jobs. If you’re already getting Job Seeker’s Allowance or Housing Benefit you probably haven’t been moved over yet. It is slowly being rolled out over the next few years, so don’t worry you’ll be told by your Job Centre Work Officer in advance when this will happen and exactly what you will need to do.
What happens when I do move to Universal Credit?
- You need to be online – You make your claim and check your payments and updates online.
- You need a bank account – Your payment will be made into a bank account. See our ‘How to open a bank account’ page for a step by step guide.
- You need to pay your rent directly to us – Unlike before, the government will no longer pay your rent to your landlord. Instead they will pay the money straight into your bank account and you will be responsible for paying your rent.
We suggest setting up a Direct Debit payment to us for the day your Universal Credit payment arrives in your account. That way you don’t need to remember to pay or worry about how much you have left for other things.
We can set this up for you, all you have to do is give our Money Advisors a call on 01294 316 784 / 775.
Scottish flexibilities for Universal Credit
The Scotland Act 2016 gave the Scottish Government powers to vary how Universal Credit is paid in Scotland.
The new Universal Credit choices were made available from 4 October 2017 to people living in Scotland making a new Universal Credit claim, in full service areas. The choices are to:
- be paid monthly or twice monthly; and
- have the relevant housing costs in the Universal Credit award paid to yourself or directly to your landlord.
There is still going an initial six-week wait and a first payment before you can request the flexibilities.
Don’t delay…be prepared! If you need further assistance with any of the above, our specialist Money Advisors Clair Christie or Jocelyn McConnell are on hand to help tenants make the move to Universal Credit without the stress and the worry.