What is Universal Credit?

Universal Credit was introduced as part of the 2012 Welfare reform. If you currently claim any benefits it is important for you to know about the changes.

Under Occupancy otherwise known as bedroom tax

Bedroom tax is applied to your ‘net rent’. The housing benefit office calls this your ‘eligible rent‘ the amount of net rent is cut by 14% if you have one spare bedroom and 25% if you have two or more spare bedrooms. For example, if your net rent is £100 a week, you need to pay the following extra rent yourself: £14 if you have one spare room, £25 if you have two spare rooms. If you want to check how many bedrooms you are entitled to under Housing Benefit law you can look here

Four-year benefit freezes

Four-year freeze to working age benefits whilst still protecting pensioners, and benefits related to the extra costs of disability.

Benefit Cap

Since November 2016 the Benefit Cap for families was reduced to £23,000 in London (£15,410 single claimants) and £20,000 elsewhere (£13,400 single claimants). Exemptions apply for people receiving Guardians’ Allowance, Disability Allowance, Personal Independence payments, carers allowance and the carer’s element of Universal Credit.

Your Universal Credit Work Coach:

Your Universal Credit Work Coach will offer help and support to help you to meet your claimant commitment, and job search. It is important to tell your Work Coach if you have any commitments I.E. Caring, school runs or anything that may impact on your work search at your interview in the Job Centre.

They can also offer practical advice regarding travel to and from interviews, how you should dress and help you prepare for work.

Improve Your Chances of Success:

One of the things you could do to improve your chances of success is to plan your journey to interviews in advance, you can do this by using Google Maps or Mersey Travel Journey Planner.

If you are going to struggle to afford travel costs to an interview, please discuss this with your work coach.

Bereavement Support

Three different benefits are being replaced with one new Bereavement Support Payment. It’s worth £3,500, plus £350 a month for 18 months, for claimants with dependent children (£2,500 plus £100 a month for other claimants).

Further Changes

Following the recent Budget, there have been a number of changes made to the proposed Welfare Reforms. Make sure you know how these will affect you, and what you need to do.

Universal Credit – Budgeting Advance terms extended

Currently, new claimants can ask for a Budgeting Advance of their personal element payment.

100% of the personal element can be requested. This is a loan that is paid to the customer to cover any immediate bills or household costs that they would otherwise not be able to afford while they wait for their first Universal Credit payment (5 weeks).

This advance will also include any housing costs due. The loan is then deducted back, being taken directly from your personal allowance in your Universal Credit payments for up to 12 months.

Universal Credit – Help with childcare costs

New regulations, in force from 16 October 2019, will allow more time for Universal Credit claimants to report their childcare costs. Currently, if someone pays for childcare within a Monthly Assessment Period (MAP), but does not report this to the DWP by the end of that MAP, then no Childcare Cost Element can be included for that MAP.

From 16 October 2019 the deadline to report childcare costs will be extended – the childcare costs must be reported before the end of the MAP that follows the MAP in which they were paid. The government has also provided information about the type of help that is available for up-front childcare costs.

The Flexible Support Fund can be used to pay 100% of the upfront childcare that a claimant incurs between starting work and receiving their first wage. This is paid directly to the childcare providers and is not repayable.

Once a claimant has received their first wage, Work Coaches can offer Budgeting Advances (where the claimant is eligible) to help pay for further upfront childcare costs. This could help during school holidays, when there is a change of childcare provider, or additional childcare in order to increase work hours.

Budgeting Advances are repayable, however once the childcare is paid for, a Childcare Costs Element can be included in the UC award.

The government’s current* no-deal Brexit proposals for EEA nationals claiming benefits, and obviously subject to change:

The rules around free movement rights would remain until primary legislation is changed, including the existing Habitual Residence Test for EEA nationals.

Any EEA national who has arrived in the UK before Brexit day (31/10/19) could still apply to the EU Settlement Scheme until 31/12/20 and may be able to get means-tested benefits based on this status.

EEA nationals who arrive after a no-deal Brexit would be able to enter the UK as they do now and could then apply for a new European Temporary Leave to Remain (EuroTLR). The EuroTLR will last for three years and would then require another application under a new system.

*As at 17/10/19

Universal Credit – 2 week Housing Benefit rollover period for new claimants

Universal Credit claimants will continue to be paid housing benefit, by the Local Authority, for two weeks after the claimant begins their claim for Universal Credit. This rollover period should cover the gap in payment time, meaning that no arrears are accrued in this time.

This change has been done to resolve the issue of a shortfall in housing benefit that would have occurred. This will mean that claimants will not have to pay any rent shortfall from other income or from the personal element of their benefit payment.

Here to Help

If you need support applying for Universal Credit or on any of the points covered here, please get in touch.

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