What is Universal Credit: As Universal Credit continues to evolve, some claimants may not understand how it operates. People receiving older legacy benefits are being gradually transitioned to the new benefit, and rules regarding the duties claimants must complete have recently changed, which may cause confusion among claimants.
Universal Credit is not predicated on an individual’s work hours.
The amount of Universal Credit a person receives is not determined by the number of hours they labour, but rather by their income.
What is Universal Credit, how much will I receive, and what other assistance is available?
Universal Credit provides millions of low-income individuals with regular payments to assist with essential expenses.
As Universal Credit continues to evolve, some claimants may not understand how it operates.
People receiving older legacy benefits are being gradually transitioned to the new benefit, and rules regarding the duties claimants must complete have recently changed, which may cause confusion among claimants.
Here are five misconceptions about Universal Credit that people may find clarifying useful. Universal Credit is not predicated on an individual’s work hours.
The amount of Universal Credit a person receives is not determined by the number of hours they labour, but rather by their income.
A person will receive a standard allowance and, depending on their circumstances, additional payments.
Current monthly standard honorarium payments are as follows:
- Single under 25: £292.11
- Single 25 or over: £368.74
- Under-25 joint claimants: £458.51
- One or both claimants must be 25 or older to qualify for a joint benefit of $578.82.
There is a taper rate that progressively reduces a claimant’s maximum payment as their earnings increase if they are employed.
The taper rate is 55%, indicating that a person’s Universal Credit payment is reduced by 55p for every £1 they earn.
Some claimants receive a work allowance, which is a predetermined quantity of money they can earn before their Universal Credit is reduced.
The benefit is typically restricted to claimants with parental responsibilities or who have a disability or health condition that hinders their ability to work.
These are the current rates for the labour allowance:
- £379 per month – for recipients of housing assistance
- £631 per month – for claimants who do not receive housing assistance.
Not all Universal Credit recipients are required to seek employment.
Each individual receives a Claimant Commitment outlining the steps necessary to obtain Universal Credit.
This will depend on the individual’s circumstances, including their health and employment status.
In certain circumstances, a person will be placed in the no work-related requirements group and will not be required to seek employment.
A person may be placed in this group if they are unable to work or if they provide care for another person or a young infant.
Claimants can determine if they are required to seek employment by examining their Claimant Commitment.
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Universal Credit does not completely replace other benefits.
Universal Credit replaces only the following legacy benefits:
Credit for dependent children
Working Tax Credit Housing Benefit Income Support Income-based Jobseeker’s Allowance (JSA) Income-related Employment and Support Allowance (ESA).
By the end of 2024, households receiving these legacy benefits will be transferred to Universal Credit.
With one exception, individuals receiving income-based ESA who do not receive tax credits will not be transferred until 2028.
When a person is to be transferred to the new benefit, they will receive a letter titled “migration notice.”
If a person reports a change in their circumstances, such as beginning a new job or relocating. They will be automatically enrolled in Universal Credit.
Moving to Universal Credit may not result in a reduction in benefits.
The payments of individuals transitioning from legacy benefits to Universal Credit may alter, with some payments increasing rather than decreasing.
Last year’s DWP data revealed that of the 2.6 million beneficiaries it was transferring to Universal Credit. 1.4 million would be better off and 900,000 would be worse off.
Using a benefits calculator, such as the one on the Turn2us website, a person can determine how much in benefits they are entitled to.
Extra assistance is available for Universal Credit recipients who are struggling to make ends meet.
A Universal Credit claim can take up to five weeks to be processed, during which time a person’s current benefits will cease.
A person who is experiencing financial hardship may request an advance payment of their first Universal Credit payment. Up to the full amount they would normally receive for their award.
However, the recipient must repay this amount through future Universal Credit disbursements.
This fiscal year, people receiving Universal Credit are also receiving a one-time £900 cost of living payment, paid in three instalments.
