What is Universal Credit?
The Welfare Reform Act 2012 introduced major changes, including the introduction of Universal Credit, to the way people receive benefits and the amount that they get. Universal Credit is a new monthly payment for people who are either unemployed or working but on a low income and is being introduced gradually across the UK.
It will eventually replace all of the following means-tested benefits and tax credits:
- Income Support
- Child Tax Credit
- Housing Benefit
- Working Tax Credit
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
Universal Credit is made up of a standard allowance plus elements for:
- Being a carer
- Childcare costs
- Disabled children
- An ill or disabled adult
The maximum Universal Credit Award will be made up of:
- One standard allowance for your household, plus
- Any elements which cover your family circumstances
What does Universal Credit mean for Nacro tenants?
The number of Nacro service users who are either already on Universal Credit or being told to apply for Universal Credit is increasing.
Nacro accommodation is classed as supported accommodation and, as such, we apply for exempt or specified accommodation status for our properties and service users. This means that while we retain this status we (and our service user tenants) are exempt from the Housing Costs part of Universal Credit and will only receive the personal costs part of Universal Credit (where previously they would have received IS, JSA or ESA).
What does Universal Credit mean for landlords?
This link summarises the changes and key dates that landlords need to know about if they have tenants who are on Housing Benefits who will be moving to Universal Credit. It includes a lot of information about managed payments/housing costs, which will be relevant when supporting service users when moving on. It is likely that move on accommodation may not be classed as exempt. It is also a useful guide if the need arises to apply for direct payments in light of rent arrears.
What does Universal Credit mean for general service users and tenants?
Universal Credit is paid directly into a bank account so, in the first instance, individuals will need to ensure that they have one, and if not will need to apply for one. For more information on bank accounts, click here.
You might have to wait up to six weeks for your first payment, as Universal Credit is paid monthly in arrears. Instead of receiving your benefits individually at different times of the month, you will get one payment, once a month, paid directly into your bank account.
At the moment you may have chosen for your Housing Benefit to be paid directly to your landlord. With Universal Credit, you will receive the money directly and will need to arrange to pay your rent (and other bills) yourself. Careful budgeting and planning is essential.
Find out more about Universal Credit at:
How do I apply for Universal Credit?
Apply online here.
Most benefits needs to be claimed online. Nacro provides internet access in many of our housing hubs and in some of our properties. After you apply, contact your local Jobcentre Plus within seven days to make an appointment with a work coach.
If you do not have access to the internet or a computer, you might be able to complete the application using a computer at your local Jobcentre or local council. They can also offer face to face advice.
If you need help with your claim, call the Universal Credit helpline on 0345 600 0723. Lines are open between 8am–6pm, Monday to Friday (closed on bank and public holidays). Calls are free if you have free or inclusive minutes as part of your phone contract. If you don’t, ask the adviser to call you back, as the call might cost you up to 40p per minute if you’re calling from a mobile. If you’re making your claim by phone, it’s particularly important to do this as it can take up to 40 minutes.
Universal Credit when you are on remand or in prison
You are disqualified from Universal Credit while you are on remand or in prison. However, you may be entitled to Housing Benefits and Child Tax Credit.
Housing Benefits when you are on remand or in prison and on Universal Credit
You will not be entitled to claim Housing Benefit if:
- You’re likely to be on remand for more than six months
- You’re likely to be in prison for more than six months (including any time on remand)
- You’re not intending to return home on release
- You’re claiming as a couple and you’ve split up
- The property is going to be rented out
You cannot make a new claim for Housing Benefit if you expect to be on remand for more than six months or in prison for more than six months, including time spent on remand. However, if you were not getting Universal Credit before you went into prison but were entitled to it, you might qualify for backdated payments.
If you were getting Universal Credit to help pay your rent or a mortgage before you went into prison, you can continue to get housing costs payments for up to six months. This applies if you are on remand, on bail or sentenced. You will not get Universal Credit if you received a custodial sentence and expect to be in prison (including time on remand) for more than six months.
Child Tax Credit when you are on remand or in prison
If you are single with children and are sent to prison, you may stop receiving Child Tax Credit. A decision will be taken by the Tax Credit Office considering if you are responsible for the child, the lengths of your sentence, if you and your children are in regular contact and if your child is in prison with you. The person looking after your child or children while you are in prison may be able to claim Child Tax Credit if you can’t.
If you are in a couple and one of you goes to prison, your Child Tax Credit will continue.
If you are a parent receiving Child Tax Credit and your child goes to prison for four months or less, your Child Tax Credit will continue.
Claiming Universal Credit on release
If you’re entitled to benefits, you can put in new claims as soon as you leave prison.
If your claim was successful, it usually takes six weeks for a new claim to be assessed and your first payment to be made. In some circumstances, including if you left prison in the last month, if you were victim of domestic violence in the last six month or you received other benefits before you moved to Universal Credit, you will be paid after five weeks.
After you received your first Universal Credit payment, you will be paid on the same day once every month. In some parts of Scotland, it is possible to be paid twice every month.
Getting an advance
If you have difficulties with your living costs while you are waiting for your first Universal Credit payment, you can apply for an advance. Speak to your Jobcentre Plus work coach about applying for an advance payment or call the Universal Credit helpline. Usually, you will be told the same day if your claim for an advance payment was accepted.
It is possible to receive up to 100% of your estimated payment. However, you will need to repay the advance from future Universal Credit payments, so that you will get less every month starting with your first payment. You have up to 12 months to repay the advance. In exceptional circumstances, you can ask for repayments to be delayed for up to three months.
You can also receive a Budgeting Advance to help you with emergency household costs (for example, if your fridge stopped working) or with starting a job. This is a loan that needs to be repaid through your Universal Credit payments, so that they will be lower until you repay. You can borrow a Budgeting Advance starting with £100 and going up to £348 if you are single, £464 if you are living in a couple and £812 if you have children.
A claim for Universal Credit can be backdated for a maximum of one month. It is usually necessary that you or your partner could not have reasonably been expected to make a claim earlier. Examples of valid reasons for a backdated payment are illness, disability and computer failure.
How can I contact Universal Credit helpline?
If you don’t have a Universal Credit online account you should call the live service helpline. If you do have a Universal Credit online account, contact the full service helpline.
Universal Credit live service helpline:
Telephone: 0800 328 9344
Welsh language (make a claim): 0800 012 1888
Textphone: 0800 328 1344
Universal Credit full service helpline:
Telephone: 0800 328 5644
Welsh language (report changes): 0800 328 1744
Textphone: 0800 328 1344
What else has changed in the benefits system?
There have been a number of other changes to the benefits system, notably the replacement of the Disability Allowance with the new Personal Independence Payment (PIP).
For more information on benefit changes click here.
What is the Bedroom Tax?
If you have more bedrooms in your home than the UK Government says you need, you lose part of your housing benefit. If you have one ‘spare’ bedroom your housing benefit is cut by 14% of your full weekly rent. If you have two or more spare bedrooms, you lose 25%.
Read more about Bedroom Tax and how this might affect you here.