UC Information

UC will replace:

  • Income based Jobseeker’s Allowance
  • Income based Employment and Support Allowance
  • Income Support
  • Tax credits
  • Parts of the Social Fund
  • Housing Benefit

UC will not replace:

  • Child Benefit
  • Contribution based Jobseeker’s Allowance
  • Contribution based Employment and Support Allowance
  • Council Tax Benefit
  • Disability Living Allowance
  • Parts of the Social Fund (Community Care Grants and Crisis Loans)

UC has a benefit cap:

  • Lone parents and couples cannot receive more than £500 a week
  • Single people cannot receive more than £350 a week
  • This cap does not apply to households where someone is:
    • Claiming Disability Living Allowance or its replacement, Personal Independence Payments
    • Claiming Attendance Allowance
    • In the Support Group of Employment and Support Allowance
    • Claiming industrial injuries benefit
    • Claiming war disablement pension of armed forces compensation scheme payments
    • Claiming war widow or war widower pension
    • Has earnings, either alone if single or with the partner if in a couple, that are equivalent to 16 hours a week on National Minimum Wage
    • You, together with your partner if applicable, earned more than £430 a month for a year and that year of work ended within the last 39 weeks (this is a 39 week ‘grace period’)
    • This cap does not include:
      • Council Tax Benefit
      • Cold weather payments
      • Discretionary housing payments
      • Community Care Grants and Crisis Loans
      • Statutory adoption, maternity, paternity and sick pay
      • Sure Start maternity grants
      • Bereavement payment
      • Funeral payments

UC is composed of several elements:

  • Basic allowance.  Depends on:
    • if you are under 25
    • whether you are single or in a couple
    • whether your partner (if applicable) is under 25
    • Housing element
      • Tenants:
        • Depends on the number of rooms needed.
        • There may be a deduction if the property is considered to be under-occupied
        • There will be deductions if non-dependants also live in the property.
          • Non-dependants are people who are over 21 and are not your partner, joint tenant, boarder, lodger, sub-tenant or paid carer
          • These deductions will not be made if you or your partner:
            • Is registered blind
            • Receives middle or higher rate DLA care
            • Receives attendance allowance
            • Receives daily living component of Personal Independence Payments
            • Deductions are not made for non-dependants who are:
              • Under 21
              • A lone parent with a child under 5
              • Receiving state pension credit
              • Receiving middle or higher rate DLA care component
              • Receiving Attendance Allowance
              • Receiving daily living component of Personal Independence Payments
  • Owner-occupiers:
    • can get support for mortgage interest and some service charges
    • all loans secured against the property can be claimed for
    • There is a waiting period before this will be paid
    • Is not given to people who are in paid work (although you may get an additional earnings disregard)
    • Is paid for 2 years only to people who are expected to be looking for work
    • There are no deductions for having non-dependents living in the house
    • Capability for work element.  This depends on whether you are deemed to have:
      • Limited capability for work
      • Limited capability for work and work related activity
      • Child element.
        • One rate for first child
        • Lower rate for each of subsequent children
        • Extra if you have a child who receives DLA
        • Extra additional to the above payment if the child is severely disabled and receives higher rate care for DLA
        • Extra additional to the above two payments if the child is registered blind
        • Child care costs element
          • Is given if paid child care is necessary in order for you to remain in work
          • You and your partner, if applicable, must both be in work, unless one of you is unable to look after a child because they:
            • Have limited capability for work (or work related activity)
            • Have regular and substantial caring responsibilities for a severely disabled person
            • Are temporarily absent from the household (i.e. in prison, hospital or residential care)
  • There are no set number of hours you must work to receive this element
  • 70% of childcare costs will be met, up to a limit of:
    • £532 a month for one child
    • £910 a month for two or more children
    • Carer element.
      • Depends on caring for a severely disabled person for at least 35 hours a week.
      •  Is not received in addition to a Capability for work element, even if eligible for both
      • You do not have to claim carer’s allowance to receive this element

UC will be removed at various rates as your income increases:

  • You will keep a given amount of UC depending on your circumstances:
    • Single
    • Lone parent
    • Have a partner but no children
    • Have a partner and children
    • capability for work
    • Above this disregard, your earnings will be removed at the rate of 65p for every £1 earned after tax and national insurance
    • Income other than earnings will be taken into account, such that every extra £1 received as non-earned income is matched by a £1 decrease in UC

    Advantages and Disadvantages of UC

UC is simpler because:

  • There is no need to apply to the HMRC as well as to the DWP
  • There is only one rate at which benefits are removed as earnings increase

UC is complicated because:

  • Council Tax Benefit is administered separately
  • There are different amounts of money a person is allowed to keep before benefits start to be removed, based on circumstances
  • It has a benefit cap, but this cap excludes 12 benefits and does not apply to certain groups
  • There are different elements given depending on a large variety of circumstances

UC has advantages that:

  • Most people will keep more of their benefits as they return into work, thus increasing work incentives compared to the current system
  • Fewer tapering rates makes it easier for claimants to understand how their income will change as circumstances change

UC faces problems because:

  • There is uncertainty over whether the IT system will be ready in time
  • There has been little information released by the government regarding details of UC.  This is causing problems for many organisations who need this information in order to be able to put in place safeguards and practices to help the people who will be affected by the changes
  • Applications for UC will be made online, despite evidence of currently low usage of internet for benefit applications, and the difficulties that this will create for some claimants
  • UC will be paid monthly, despite large numbers of people who receive wages more frequently than this, and the difficulties with budgeting that this may cause
  • UC will be paid to the ‘household’, causing problems where relationships are transient and resulting in payments going to only one partner in a couple, rather than both receiving some money.
  • Having Council Tax as a separate, locally run benefit risks having a postcode lottery, and may undermine the generally improved incentives to work
  • You can only volunteer for a maximum of 17 ½ hours a week (less if you are not expected to be looking for full-time work of 35 hrs a week), but may be mandated to work experience or a work placement that involves 30 hrs work a week

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