https://www.gov.uk/government/news/universal-credit-first-year-of-welfare-transformation-and-north-west-next-steps
But what does that really mean? and who will it affect?
(For detailed information about what Universal Credit is and how it works, check out http://www.benefitsowl.info/universal%20credit.html.)
What is the situation now?
At the moment, in the north-west of England, Universal Credit only affects people who live in the following local authority areas: Wigan, Warrington, Oldham, and Tameside. These are known as 'pathfinder areas'.
However, even in these areas, only a fairly small subset of potential claimants need to worry about Universal Credit. Universal Credit is currently only available to single claimants who are between 18 and 60½, are not working, are looking for work, and are not getting any other benefits or tax credits when they make their claim.
What is happening from June?
From June this year Universal Credit will expand to cover claimants live in the areas covered by:
- Bolton Borough Council
- Bury Borough Council
- Cheshire East Council
- Cheshire West and Chester Council
- Knowsley Borough Council
- Preston City Council
- Salford City Council
- Sefton Borough Council
- South Ribble Borough Council
- St Helens Borough Council
- Trafford Borough Council
- Wirral Borough Council
(You might note that Manchester and Liverpool are missing from this list.)
These new areas will only be applying Universal Credit to the same group of claimants as in the earlier pathfinder areas, i.e. single claimants who are between 18 and 60½, are not working, are looking for work, and are not getting any other benefits or tax credits when they make their claim. In effect, therefore, the roll out will initially only have an impact on single jobseekers who are not getting any other benefits at the moment.
For people living in the existing pathfinder areas - Wigan, Warrington, Oldham, and Tameside - the net will gradually be expanded to include some couples making new claims, according to the government's press release.
To get an up-to-date list of areas that are included check out https://www.gov.uk/universal-credit/eligibility
When you say 'from June'...
Well...
There are two important phrases in the government's press release:
- 'from June more jobcentres across the north west of England will gradually come online each week until the whole region is covered'
- 'We are currently in discussion with the following 12 local authorities to be at the forefront of this next stage of expansion'
In other words this isn't going to happen overnight. But claimants in these areas still need to be ready for when it does.
I've commented on problems with the roll-out of Universal Credit in previous posts so I won't go on about them here. However I will mention that the most recent report [1] on the matter from Parliament's Work and Pensions Committee notes that as of December 2013 just 4,280 were claiming Universal Credit (paragraph 24) of a total estimated target of 7.7 million households (summary).
Discussion with local authorities is necessary, in particular, because Universal Credit includes payments for rent and so replaces Housing Benefit - a local authority administered benefit - for the claimants affected. Council Tax Support will continue to be administered by local authorities. So extensive liaison between the DWP and each local authority will plainly be necessary.
How will Universal Credit affect claimants?
It's crucial to understand that the introduction of Universal Credit brings with it two, very distinct, kinds of changes:
- Changes relating to what Universal Credit is;
- Changes relating to how Universal Credit is administered.
The first kind of change is largely positive, or at least neutral, in terms of the effect upon claimants (at least in my opinion). For example:
- Claimants with no other income will receive just the same amount of money as they do now;
- Claimants who do have income other than earnings, or who have capital, will find that it is treated in the same way as it was before;
- Claimants who have earned income will find that they will be able to keep much more of their earnings than they could with the 'old' means-tested benefits;
- There will no longer be a cut-off for claimants who work 16 hours or more hours per week.
The second kind of change, on the other hand, is likely to cause a lot of problems for a lot of people. The key changes are these:
- Most claimants will have to claim the benefit, and report changes, online;
- Claimants will be paid every calendar month, rather than every two weeks as at present;
- These monthly payments will include any help with rent, so claimants will normally be responsible for making sure that the right amount of money is passed onto their landlords at the right time..
I don't think you need me to spell out the likely consequences of this disturbing cocktail.
All this assumes, of course, that the DWP IT systems underlying Universal Credit work properly. The Work and Pensions Committee appears to have serious concerns about this (see their report, paras 34ff).
Will this be the end of Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA)?
Yes and no.
income based JSA and income based ESA will be abolished: they, like Housing Benefit, will be replaced by Universal Credit.
However contribution based JSA and contribution based ESA will remain (they will be renamed - initially - 'new style' JSA and ESA, and eventually just JSA and ESA). Therefore anyone who thinks that they may be entitled to contribution based JSA and is in a Universal Credit area should claim both. When I have a better idea of how this works in practice I will let you know.
In the meantime, if you want to know more about Universal Credit have a look at my website at http://www.benefitsowl.info/universal%20credit.html
Main sources and further reading
[1] Work and Pensions Committee - Fifth Report: Universal Credit implementation: monitoring DWP's performance in 2012-13 http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/1209/120902.htm
The Universal Credit (Transitional Provisions) Regulations 2013 No. 386
http://www.dwp.gov.uk/docs/a14-6501.pdf
Advice for decision making: Chapter M1: Pathfinder Group - Claims for UC https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/288079/admm1.pdf
The Universal Credit Regulations 2013 No. 376 http://www.dwp.gov.uk/docs/a14-6001.pdf
