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Universal Credit The Shape of Things to Come

Universal Credit The Shape of Things to Come. Angela Toal Welfare rights worker CPAG in Scotland. The Case for Change. Poor work incentives Benefits mean going back to work doesn’t pay Complex system For claimants To administer. What is Universal Credit. A single means-tested benefit

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Universal Credit The Shape of Things to Come

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  1. Universal CreditThe Shape of Things to Come Angela Toal Welfare rights worker CPAG in Scotland

  2. The Case for Change • Poor work incentives • Benefits mean going back to work doesn’t pay • Complex system • For claimants • To administer

  3. What is Universal Credit • A single means-tested benefit • For working age people • Paid in work or out of work • Withdrawn at constant rate as earnings rise • Support for adults and children • Support for rent and mortgages 2013

  4. Who Can Claim Depends on • Your age • Your residence in GB • Your means • Accepting a ‘claimant commitment’ Lone parents Sick or disabled people Carers Out of work Low waged

  5. UNIVERSAL CREDIT INCOME SUPPORT INCOME-BASED JSA INCOME-RELATED ESA CTC/WTC SF BUDGETING LOANS COMMUNITY CARE GRANTS CRISIS LOANS HB/CTB

  6. How Much Is It Standard allowance • Single claimant or couple (joint claimants) Additional amounts • For a child • For a disabled child • For limited capability for work • Higher disability addition • For caring for a disabled person • For rent or mortgage

  7. Going Back To Work Basic allowance out of work or low waged replaces IS, JSA, ESA, WTC Additional amounts eg, mortgage, rent, children, disability, caring Earnings disregard Net earnings Single taper rate Universal credit Adapted from 21st Century Welfare, DWP, July 2010

  8. Earnings disregard example - disabled person • Her earnings disregard is £7,000. • She has housing costs in her universal credit of £70 a week which means an annual amount of £3,640. • £3,640 x 1.5 is £5,460. • Her earnings disregard of £7,000 is reduced by this amount. • However her ‘disregard floor’ is £2,080, and her disregard will not reduce below this. • £40 pw of her earnings will be disregarded. • After that her UC will be tapered away at 65%.

  9. Four groups No work-related requirements Work-focused interview only Work preparation All work-related requirements Claimant Commitment

  10. How is it Administered • Online claims and reporting • Real-time earnings information from HMRC • Assessment and award made automatically • DWP administered • Payments possibly monthly • All overpayments recoverable

  11. Will It Reduce Child Poverty • Government’s child poverty strategy gives no figures • In debate, said increased take up and entitlement changes would mean child poverty would fall by 350,000 • Others say set to rise because of cuts

  12. What’s the Verdict

  13. CPAG advice and resources: website www.cpag.org.uk COMING SOON Universal credit guide Welfare Rights Bulletin training advice line www.dwp.gov.uk/policy/welfare-reform More Information

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