Universal Credit

UPDATE - Secretary of State Esther McVey recently said:
"we are also listening and responding to concerns about how Universal Credit supports people and constantly looking to improve the benefit.
Significant changes have been made to the system already. We have removed the 7 waiting days, made 100% advances available, and provide an additional 2 weeks of housing benefit for claimants moving onto UC. The opposition cynically voted against these measures earlier this year – risking vital support for claimants.
Since becoming Secretary of State, I have reviewed legal cases reversing past positions and not appealed court decisions allowing the Department to reinstate housing benefit for 18-21 year olds, exempt kinship carers from changes to the Child Tax Credit element of Universal
Credit, and announced measures to protect 500,000 severely disabled people when they move to Universal Credit.
This has been the ‘test and learn’ approach to UC, and importantly where further improvements need to be made we will do that too.

What we are doing next
By December, Universal Credit will have rolled out to every Job Centre in the country. This means that people who are making new claims to our benefits system now receive Universal Credit rather than the being put on the old system.
Soon we will start the wider process of moving people from the old benefits system onto Universal Credit, following the passage of regulations in Parliament. These regulations allows us to move claimants onto UC, and provide transitional protection.
These are important regulations to pass, in order to ensure that targeted support reaches those it is designed to help.
Throughout managed migration, we will continue to take a slow and measured approach. This will not begin in January 2019, but later in the year, after a period of preparation. For a further year we will then begin migration working with a maximum of 10,000 people, continuing with our ‘test and learn’ approach. This is to ensure the system is working well for claimants and to make any necessary adaptions as we go, until full roll out ends in 2023.

Budget Announcements:
The Government announced the following changes to the Universal Credit scheme:

We are abolishing waiting days, removing the seven day period for new claimants. This will benefit around 750,000 new UC claimants a year by an average of £160 per household.

New Claimants will be offered an advance of up to 100% - an increase from the previous 50% advance.

As claimants with housing support transfer to UC, an additional two weeks of Housing Benefit will continue to be paid.
This change will provide, on average, around £233 in additional financial support per household for 2.3 million claimants as UC is rolled out. This will make extra money available for claimants when they may be at greatest risk of rent arrears.

 

Universal Credit is a major reform form the Government that will transform the welfare state in Britain. It is important that work should always pay more than not working, and that people are encouraged into work if they are able.  Under the new system, benefit will be withdrawn gradually as claimants start work or increase their earnings, meaning their total income always goes up. 
 
The controlled expansion of Universal Credit started in April 2013 and I am pleased that significant progress has been made to date. Universal Credit is now available for single claimants in every jobcentre in the country.
 
Figures have shown that people claiming Universal Credit are 13 per cent more likely to be in work than people claiming Jobseeker's Allowance, earning more money and more willing to take a job.
 
The Government is also helping people to progress in work by reducing the taper rate in Universal Credit from April 2017. I welcome the Government's decision to make this change, which will mean people will keep more of what they earn and will be better rewarded for increasing their hours or pay. 
 
Under Universal Credit, support worth up to 85 per cent of childcare costs is now available regardless of hours worked, significantly higher than the support that was available under tax credits. This will give parents more flexibility to work and earn more money.