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Benefits Update – March 2015
Universal Credit

This is now live in a number of areas in the North West for both single JSA claimants and families and householders.  Anyone of working age making a new claim to certain state benefits in these areas will apply for Universal Credit.  National Rollout has recommenced from February 2015 but only to new single Jobseekers Allowance claimants.  Gateshead will go live on 15th June 2015.  However, this will only be for people making brand new claims for Jobseekers Allowance.

Universal Credit will eventually replace the following six main working age benefits:

  • Income Support,
  • Income related Jobseekers Allowance,
  • Income related Employment and Support Allowance,
  • Housing benefit,
  • Working Tax Credit
  • Child Tax Credit.

A number of benefits will be paid separately such as Attendance Allowance, Bereavement Benefits, Disability Living Allowance/PIP, Carers Allowance, Child Benefit, Contributory Employment and Support Allowance and Jobseekers Allowance, Local Council Tax Support, Industrial Injuries Benefit, Maternity Allowance, Statutory Adoption pay, sick pay, war pensions and pensioner benefits.

Universal Credit is worked out by awarding a personal amount based on age and whether someone is single or part of a couple, and then adding top ups for disability, housing costs and children.  Universal Credit will reduce in line with the amount of money earned when someone starts work.

The housing costs element of the Universal Credit award helps tenants with their eligible rent and service charge costs.  Regulations state that claimants must satisfy three conditions – payment, liability and occupation – to qualify for help with their housing costs.  DWP will, in the majority of cases, pay eligible housing costs directly to the claimant as part of the single Universal Credit benefit payment.

Universal Credit will be capped at £500 a week for couples and lone parents, and £350 a week for single people. 

In the majority of cases Universal Credit will consist of a single, monthly payment which is paid in arrears directly into the claimant’s account.  Couples living in the same household will receive one monthly payment between them.  Payments will include eligible housing costs.  Households will then be responsible for managing their own rent payments.  In some cases an Alternative Payment Arrangement might be available.  This could take the form of a more frequent payment, split payment across the household or a managed payment direct to the landlord.  Other adults living in the same household who are claiming Universal Credit will be paid separately.

If a claimant’s payday falls on a weekend or a bank holiday, payment will be moved forward to the nearest working day.

A key aspect of Universal Credit is to encourage personal responsibility and financial independence to help remove these as barriers into employment, therefore, where possible, claimants will be expected to arrange their own rent payments as they would if they were in full time work.  Landlords need to think about how this will fit with their own payments calendars.

If landlords have previously received a managed rent payment from the local authority, they will need to speak to their tenants to agree arrangements for collecting rent from them as all cases will be looked at on an individual basis.  Universal Credit intends claimants to take responsibility for their own finances, but help will be provided for those who need it.

Personal Budgeting Support can be offered to anyone claiming Universal Credit. Claimants needing help with monthly budgeting will be identified through conversations with the Universal Credit work coach.

Many claimants will be able to help themselves through the online budgeting support services that are already available but DWP will help any claimants who have a clear need for more intensive support.

Money advice will be offered at a national and local level, and will include a mix of online, phone and face to face services.

Landlords and other third parties (eg family members, support workers) can be considered when assessing a claimant’s ability to manage their finances.  For those claimants who are not yet in arrears with their rent but may benefit from some budgeting advice the DWP can refer the third party, family member or landlord to appropriate supporting organisations.  Personal Budgeting Support or Alternative Payment Arrangement may also be deemed appropriate.

A relevant third party can contact the Universal Credit Service Centre by calling 0345 600 0723 to notify any concerns that they may have about a Claimants financial capability.

The Money Advice Services offers advice and support to claimants and landlords to help them prepare for the move to Universal Credit.

Landlords would be expected to follow their usual rent collection practices.  However, if the claimant is unable or unwilling to resolve a payment issue that puts them at risk of eviction, DWP can assist landlords by considering if a managed payment to the landlord (Alternative Payment Arrangement) is appropriate.  When arrears reach the equivalent of one month’s rent, DWP will review the situation following notification from the claimant or the landlord.  At this point DWP can offer the claimant budgeting support and may decide to pay the rent directly to the landlord.  When arrears reach an equivalent of two months’ rent the landlord (or the claimant) can ask DWP to consider if an Alternative Payment Arrangement would be an appropriate course of action.

Ian Duncan Smith has announced that roll out will be complete for most cases by 2018 with a proposed 0.1 million recipients by May 2015, 0.5 recipients by May 2016 and 7.7 million recipients by the time roll out is complete.

For pensioners, housing benefit will eventually be paid as Housing Credit by the Pension Service, but not until at least April 2017.

Further Information can be found at:
www.gov.uk/universal-credit

DWP offers an email address for landlords to use for urgent enquiries
UC.SERVICECENTREHOUSING@DWP.GSI.GOV.UK

If you are a landlord wishing to request a managed payment, please download the Universal Credit: Rent Arrears Form and send it to:

Freepost Plus RTEU-LESU-EXTJ
Universal Credit
Post Handling Site B
Wolverhampton
WV99 1AJ