What is Universal Credit and who will be affected?

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Single mothers highlighted the challenges they face on Universal Credit when they faced MPs in Parliament on Wednesday.

Parliamentarians and charities have also raised concerns about the programme over its implementation and the money it may require.

– What is Universal Credit?

UC replaces six existing benefits – Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Housing Benefit,
Working Tax Credit and Child Tax Credit – with a single payment.

– When is it being introduced?

UC is being rolled out gradually across the country, starting in pilot areas in 2013. So far, only new benefit claimants have been put on to the system.

But from July 2019, around two million people already receiving the old benefits will be moved onto UC, in a “managed migration” which is not due for completion until 2023.

Universal Credit
(PA Graphics)

Among those being moved to UC will be about one million working families and 745,000 people unable to work because of long-term illness or disability.

– Will anyone lose out?

The Government has provided a pot of money for “transitional protection”, which ministers say will ensure that no existing claimants suffer a cut to payments in cash terms unless their circumstances have changed.

– Will there be a wait for payments?

UC is paid in arrears, and the first payment is not made until at least five weeks after a claim is lodged. Claimants can apply for advance payments to avoid hardship while they wait.

– Why is UC being introduced?

Ministers say the new system is simpler and easier to understand than the old benefits. They believe it creates incentives for claimants to take on temporary work or increase hours.

Work and Pensions Secretary Esther McVey says that, when UC is fully rolled out, it will deliver £8 billion of benefits to the UK economy per year.

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