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Universal Credit: How does it work?

Universal Credit: How does it work?

Published at 7:02am 4th March 2019.

A Stray FM investigation has been looking at the impact of Universal Credit. 

But what is it, how does it work and who does it affect? 

Here's everything you need to know about the new benefits system. 

What is Universal Credit and why is it being introduced?

Universal Credit represents a large shake-up of the UK benefits system. Six working age benefits are being rolled into one monthly payment. They are: 

  1. Jobseekers Allowance 
  2. Income-related Employment and Support Allowance 
  3. Income Support 
  4. Working Tax Credit 
  5. Child Tax Credit 
  6. Housing Benefit   

The government says Universal Credit aims to "reduce poverty, by making work pay, and to help claimants and their families to become more independent". It also says it wants to simplify the benefits system by providing one single payment. Another big feature of universal Credit is the way in which it is accessed. People apply online and manage their claim through an online account. 

Who is it for? 

Universal Credit is available to people in a low income and those who are out of work. It also offers support for housing costs, children and childcare costs. People with disabilities and their carers can also claim. Basically it offers support to a range of people; families, single people, people in and out of work

Why is it controversial? 

Universal Credit represents an overhaul the benefits system, so you would expect there to be some teething problems. But it's come under fire from charities, food banks and some MPs who are worried about the hardship it's causing claimants. A big issue is the amount of time it takes for claimants to be paid their first installment. People have reportedly had to wait up to six weeks, causing them to turn to food banks or leading them to fall into rent arrears. .In February whilst speaking in the House of Commons,  Work and Pensions Secretary Amber Rudd linked Universal Credit to a rise in food bank use for the first time.

Why is it a big deal in Harrogate and Craven? 

Harrogate and Craven was one of the first areas to start trialing the system. It was fully rolled out here in 2016, along with nine other areas in the country. By December 2018, 3,728 people were claiming it in Harrogate and Knaresborough. A total of 2,688 people were doing the same in Skipton and Ripon. As one of the first trial areas, it's one of the first areas to see the real impact. As part of a Stray FM investigation we've spoken to claimants, food banks and the local citizen advice service. 

So when will it come into force across the UK?

Despite the concerns raised, the government says it will be fully rolled out across the country by December 2023. That is later than initially expected though. In January Work and Pensions Secretary Amber Rudd delayed seeking approval in parliament for a full roll out. Rather than move the existing welfare claimants onto it, it's expected her department will seek approval for a pilot scheme to move an initial 10,000 people onto the benefit in July. The government's described it as a "steady process", with the Prime Minister Theresa May stressing ministers are making changes and "learning through this process". Mrs May has defended the scheme by calling it one that "encourages people into work"