Changes to Benefit
Implementation of Universal Credit from October 2013
From 2013/2014 Universal Credit will replace:
Income Based Jobseekers Allowance
Income Related Employment Support Allowance
Child Tax Credit
Working Tax Credit.
Everyone who currently claims these will be moved onto Universal Credit by October 2017.
However these benefits will not be included within Universal Credit (this may change):
Council Tax Benefit (soon to be known as Council Tax Support)
Contribution based Job Seekers Allowance and Employment and Support Allowance
Disability Living Allowance/Personal Independence Payment
Statutory Sick Pay
Statutory Maternity Pay
Industrial Injuries Disablement Allowance
Universal credit is calculated as a basic allowance for a single person or couple plus additional amounts for:
- each child or qualifying young person you are responsible for (with extra additions if they are disabled)
- child care costs
- if you have a 'limited capability for work'
- if you have regular and substantial caring responsibilities for a severely disabled person
- housing costs (mortgage interest payments if you are unemployed and rent payments).
You will get the full allowance possible if your household has no other income and has less than £6000 savings.
There will be no award if your savings are over £16,000.
Earned Income (after disregards are applied) will reduce Universal Credit by a 'taper rate' of 65% (or 76% after tax and NI) which means you keep 35p in every £1.
Unearned Income will reduce Universal Credit by a 100% taper rate. So for every £1 or unearned income, Universal Credit will reduce by £1.
There will be one payment per household, paid monthly.
Timeline for the Replacement of Housing Benefit
The replacement will take place in 3 phases over four years between 2013 and 2017.
October 2013 to April 2014
500,000 people making new claims for the benefits Universal Credit replaces will get Universal Credit instead. This only applies to those who are out of work.
500,000 people who currently claim (and their partners and dependants) will move on to Universal Credit when they have a significant change of circumstances, such as starting a new job or when a child is born.
From April 2014
New claims for people who are working will move to universal credit from April 2014.
From the end of 2015 - the end of 2020
Around 3 million households will be transferred to Universal Credit by council boundary as the old benefit system winds down.
Further information about Universal Credit can be found by visiting The Department for Work and Pensions website.
Last updated: 28th August 2013
Further pages in Changes to Benefit
- Welfare Benefit changes
- Benefit Cap from July 2013
- Change to Disability Living Allowance from April 2013
- You are here Implementation of Universal Credit from October 2013
Tel: 01702 215001