Introduction to Universal Credit
Universal Credit is the result of a large overhaul of the way benefits work, putting more emphasis on being in work and being better off as a result - rather than the due to be phased out system where the Government felt it was possible to be better off out of work. The Government has proposed the Universal Credit system as a way to remove this problem, as well as simplifying the process, integrating with taxation and reducing liability to fraud.
We have used the prelimary legislation provided by the Government to condense the rather complex new legislation into a fast, free and easy to use online calculator, which will take a few details from you and produce an estimate of how much Universal Credit you can claim as well as the difference between being in and out of work under the new scheme.
With the 2013 UK Budget just a week away, and Universal Credit a big focus at the moment, it is a good idea to find out where you stand.
Universal Credit will begin to be phased in from October 2013 in Great Britain, and April 2014 in Northern Ireland, replacing the following current benefits:
- housing benefit
- tax credits - working tax credit and child tax credit
- income support / income related employment and support allowance / income based jobseeker's allowance
- components of the social fund - payments for hardship and other circumstances
It will take up to 2017 for everybody on the current 'old' system of benefits to be switched over to Universal Credit, with the first movements starting next month (April 2013).
Can I claim Universal Credit?
The easiest and quickest way to find out is to the use the calculator - the notes will explain why and how your claim is calculated. But we will provide a general outline of how Universal Credit works here for you.
Who can claim?
- Be Over 18 - If you are under 18, at or over 16 you can claim if you have dependants (or pregnant and between 11 and 15 weeks before the expected birth date), are sick and meet the conditions of a work capability assessment, are caring for a disabled person, are without parental support.
- Be under state pension age
- Be in the UK
- Are not in education
- You have accepted the claimant committment. - This is a record of your responsibilities in relation to the payment of your Universal Credit.
You can make either a single claim or claim as a couple if you have a partner. As long as one of the couple meets the conditions the claim can go ahead. Both of your incomes/savings will be taken into consideration. If one of you is over state pension age, both will claim Universal Credit. If in a couple and one of you is in full time education, both will be asssesed to claim Universal Credit.
Students will not be able to claim if the following apply:
- if a parent can claim universal credit for you - the child element.
- if you are in advanced education
- if you are in full-time education and receiving a loan or grant/bursary.
- Be participating in a course within expected hours or work or work related requirements.
Students can claim Universal Credit, if:
- you have dependants or are a foster parent.
- you satisfy the conditions for attendance allowance/disability living allowance/PIP (personal independence payment) and have a limited capability for work.
- you are over state pension age, but have a partner who is not.
- you are under 21, non-advanced education with no parental support.
Universal Credit - Breakdown of payment
A universal credit payment is made up of elements (i.e. Base, Child, Childcare, Disability, Housing, Carer), for which you have to satisfy criteria.
Once a payment has been calculated, your income and savings are taken into consideration in order to calculate how much of the credit will be paid to you.
You will be subject to an earnings disregard, which the amount you are allowed to earn after deductions (tax etc) before your Universal Credit payment is reduced/tapered.
The benefit cap may apply. This will cap the maximum payment you can claim to an upper level. There are exceptions to the cap, these will be detailed by the calculator.
Help with the calculator
- LCW - This is limited capability for work.
- LCWRA - This is limited capability for work related activity.
You can read more about the assessments in order to claim these, here
- minor - This is equivalent to a child who receives DLA (mobility or care) - if the DLA level is not the highest rate. Otherwise select serious.
- serious - This is equivalent to a child who receives the highest rate of DLA, or who is registered blind.
If you care for a severely disabled person for a minimum of 35 hours per week, you can claim the carer element. Select Yes. If you also have a work disability, your calculation will automatically remove the carer element.
If you select mortgage/owner-occupier, you can get support for mortgages interest as well as some service charges. In addition the interest you claim for can include all loans secured against your property. You will not be paid a housing element for mortgage interest/service charges if you are in any paid work.
If you are renting, please enter your rent costs, however we will automatically cap this to the max amount you are eligible for.
We have used a factsheet from Disability Rights UK to produce this calculator. A more in-depth fact sheet can be downloaded from Disability Rights UK, here.