Universal Credit has rolled out in the United Kingdom. The majority of individuals and families claiming most benefits will now receive the single monthly payment, rather than numerous weekly ones. While it has been shrouded in controversy, the trials in the North West of England proved to be successful.
The change to the benefits system in the United Kingdom is the biggest since its conception. However, a think tank believes that more households will become dependent on Universal Credit by 2020. The system is supposed to pay people to work, rather than remain home living on taxpayers’ money.
Six different types of benefits are being rolled into one. These include Jobseeker’s Allowance, Child Tax Credits, Working Tax Credits and Housing Benefit. Those who previously had their benefit being paid directly to their landlords will now receive the money themselves, and will need to pay their landlords instead. All the benefits will be paid in one monthly sum to make it easier for people.
One hundred job centers around the country already operate on the new welfare system. One of the new requirements is that benefits recipients must take a job that they are offered. However, rather than instantly removing all benefits once a person starts working 16 hours a week, an individual will see their payments gradually decreased based on the amount they earn.
Universal Credit is being rolled out across the United Kingdom after being trialled in the North West of England. The trial between July 2013 and April last year shows that 13 percent of claimants were more likely to work rather than being on Jobseeker’s Allowance. All job centers are expected to have the new system in place by next year.
It will be a gradual roll out. Individuals making new claims will receive the new Universal Credit first. However, families and couples claiming in areas where the new system is already in place will be placed on it right away. Those currently making claims will remain on the current system for the time being. The new system will be offered at a later date, and claimants will be kept informed.
Individuals can earn up to £111 ($170) per week before seeing their benefits reduced. Parents will be able to earn more, and there is no limit to the number of hours a person can work. It pays to be in work, which is something the Conservative-Liberal Democrat coalition has been pushing for since 2010. There is now a cap on the amount a person can earn in a week, making sure that it always works out better to be in work.
Universal Credit will still be paid directly into the bank or building society. However, the weekly payments will become monthly payments. It encourages individuals to think about their finances and plan better, like most would need to do when in work.
The new system has been hit with controversy. There are many claimants angry at the change, blaming a small minority for abusing the system. Computer problems also risk people having no money at all. Despite this, Universal Credit is being rolled out across the United Kingdom.
By Alexandria Ingham