Updated 11 February 2013
Universal Credit
Universal Credit is a new single payment for people who are looking for work or on a low income.
Universal Credit will help claimants and their families to become more independent and will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment. The new Universal Credit system aims to:
- improve work incentives
- smooth the transitions into and out of work, supporting a dynamic labour market
- simplify the system, making it easier for people to understand, and easier and cheaper for staff to administer
- reduce in-work poverty
- cut back on fraud and error.
It will be launched in 2013 and will replace:
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Income Support
- Child Tax Credits
- Working Tax Credits
- Housing Benefit.
Latest on Universal Credit
- Universal Credit toolkit for partner organisations - to support their work and engagement with claimants published – 21 March 2013
- Universal Credit Local Support Services Framework and draft guidance about alternative payment arrangements published – 11 February 2013
- Universal Credit and related regulations laid before Parliament – SSAC consultation report and Government response published – Transitional Protection briefing note and evaluation framework published – 10 December 2012
What’s different about Universal Credit?
The main differences between Universal Credit and the current welfare system are:
- Universal Credit will be available to people who are in work and on a low income, as well as to those who are out of work
- most people will apply online and manage their claim through an online account
- Universal Credit will be responsive, as people on low incomes move in and out of work, they’ll get ongoing support – giving people more incentive to work for any period of time that is available
- most claimants on low incomes will still be paid Universal Credit when they first start a new job or increase their part-time hours
- claimants will receive just one monthly payment, paid into a bank account in the same way as a monthly salary
- support with housing costs will go direct to the claimant as part of their monthly payment.
What's happening to other benefits?
The following benefits are changing:
- Disability Living Allowance will be replaced by Personal Independence Payment from 2013
- Council Tax Benefit will be abolished in April 2013 and replaced by a system of localised support
- Pension Credit will be amended from October 2014 to include help with eligible rent and dependent children
- Social Fund is also being reformed to introduce new local assistance.
Other benefits will continue.
When does Universal Credit start?
April 2013 – launch of Universal Credit pathfinder
Starting in April 2013, DWP, with our delivery partners in HMRC and local authorities, will introduce Universal Credit to claimants within certain areas of the North-West of England. This “pathfinder” stage will help us ensure that Universal Credit is ready to go live across the rest of the country later in 2013.
October 2013 – national launch of Universal Credit
New claimants: They will be able to make claims for Universal Credit from October 2013, while claims for existing benefits and credits will be gradually phased out. From April 2014, all new claims will be for Universal Credit.
Existing claimants: They will move onto Universal Credit in line with a phased approach that we expect to have completed by the end of 2017
This phased process will be completed in 2017 and we will continue to provide information on this, as it becomes available.
Universal Credit evaluation framework
More information
- Draft regulations and policy briefing notes for Universal Credit
- Impact assessment for Universal Credit (277KB)
– updated 10 December 2012 - Equality impact assessment for Universal Credit (275KB) – updated 9 November 2011
- Universal Credit: welfare that works (November 2010) – the Government’s plans to introduce legislation to reform the welfare system by creating Universal Credit
- Information for local authority staff on Universal Credit
