Universal credit: Benefits start move to monthly payments

 

Iain Duncan Smith said the slow roll-out of the changes, over four years, was "common sense"

A massive shake-up in the UK benefits system has begun, with the first claims made for new universal credit payments.

Universal credit will merge several benefits and tax credits into one monthly payout.

It begins with a very small number of new claimants in Ashton-under-Lyne in Greater Manchester, but will eventually affect nearly eight million people.

Iain Duncan Smith, the work and pensions secretary, said the new system was about "changing people".

'Right not early'

The benefit is for working age people looking for work, and will replace income-based jobseeker's allowance, income-related employment and support allowance, income support, child tax credit, working tax credit, and housing benefit.

It is the central plank of a benefits overhaul, championed by Mr Duncan Smith, which the government says will mean people are always better off in work than on benefits.

Universal credit timetable

  • April 2013: First claims taken in Ashton-under-Lyne
  • July 2013: Delayed pilot schemes start in Warrington, Wigan and Oldham
  • October 2013: New claimants nationally move to universal credit
  • Spring 2014: Current claimants start shift from existing benefits to the new payment
  • 2017: Switch is completed

It is also designed to simplify the welfare system by bringing a number of benefits together and reducing fraud and error.

However, some groups have raised concerns that the system is entirely dependent on a complex computer network which may not be ready or able to cope with millions of claims. They are also concerned that many potential claimants do not have access to the internet.

Labour's shadow work and pensions secretary Liam Byrne said that universal credit was "a fine idea that builds on Labour's tax credits revolution".

But he added: "The truth is the scheme is late, over budget, the IT system appears to be falling apart and even DWP [Department of Work and Pensions] ministers admit they haven't got a clue what is going on."

But speaking to the BBC's Today programme, Mr Duncan Smith defended the new system, saying "it's quicker, it's more accurate and it's easier to understand", and said the slow pace of the roll-out was designed to "get it right, not get it early".

Liam Byrne: "This is not the big shake-up we need in the benefits system"

"What we have to do is to start changing people, and that's what this system is about," he said, stressing that paying people on a monthly basis would reflect how the majority of workers are now paid.

"It's about trying to help those who are the most vulnerable to get ready for the world of work, and that will improve their lives dramatically."

Online claims

The key features of universal credit include:

  • A single, monthly payment which the government says mirrors the world of work, but charities say could create problems for personal money management
  • The inclusion of financial help to pay rent, which is currently paid directly to landlords
  • An online-only claiming process, with accounts also managed online
  • The benefit paid to households, rather than individuals, and put straight into bank accounts
  • Benefits automatically adjusted depending on earnings, which employers enter into a computer system called real-time information

This means that there will no longer be a ceiling of 16 hours of work a week, below which people can sign on and above which claims are cancelled.

This is set to benefit people like Darren Bailey, an agency worker, whose working hours fluctuate, meaning he has to keep making claims under the current system.

"I have five kids so I can't afford to mess about," he said. "Any system has got to be better than this system."

Universal credit graphic
Budgeting

The government estimates 3.1 million households will be entitled to more benefits as a result of universal credit, while 2.8 million households will be entitled to less. However, nobody would lose out during the initial transition assuming their circumstances stayed the same, the government said.

Computer keyboard All claims for universal credit will need to be made online

Across all households, ministers say there will be an average gain of £16 per month. The long-term cost to the government is £100m in current prices.

The only claimants to receive universal credit in the initial stages will be single, new claimants at a jobcentre in Ashton-under-Lyne.

Three other pilot projects - in Warrington, Oldham, and Wigan - have been delayed until July.

From October, newly unemployed people will make claims under the new system. Current benefits and tax credits will gradually be shifted to universal credit from spring 2014, with the whole process completed by 2017.

Benefits and grants charity Turn2us said that 43% of people whose benefits would be replaced by universal credit were not aware of the change.

"Once you look at the nuts and bolts, budgeting is not going to be easy especially for those with a small amount of money," said Alban Hawksworth, welfare benefits specialist at the charity.

 

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  • rate this
    +21

    Comment number 75.

    This will be the new housing eviction charter when landlords are not paid rent

  • rate this
    +3

    Comment number 74.

    I hope they have a system in place so that people can walk in and get help filling in the forms online.
    At least this system means one set of forms instead of dozens with much of them repeating themselves and even having 3 sets of medicals!
    Any simplification of the current system is to be welcomed, let's hope sufficient resources are available to deal with problem cases, etc.

  • rate this
    +17

    Comment number 73.

    I propose another shake up.

    All multi-millionares in the House of Commons should no longer receive a salary or expenses for their public service. They should be proving that we're all in it together/

    This would save the country tens of millions of pounds. Additionally if the MPs were really in it to serve the country rather than line their own pockets they would quickly support the change.

  • rate this
    +1

    Comment number 72.

    Like everyone is going to be a waiter or chugger. Even the Shard in London is bare empty like every new building in London. The unemployed need have no shame I think, its a disgusting thing to turn a blind eye towards by a Government that talks about reform.

  • rate this
    +2

    Comment number 71.

    @49 Justin

    That's assuming that where they live has a library that hasn't recently been closed due to cuts, that the library has computers and internet access - there are still lots of places in Britain with no mobile phone reception yet alone internet access. And the person needing to make a claim knows how to work a computer and understands how to work the user interface of the new system

  • rate this
    0

    Comment number 70.

    At last, the career choice for many to be on benifits is coming to an end. The whole point of the welfare state was to help people who fall into difficulty, not to prop up people who really dont want to work. These changes will allow more money to go to the people who actually require it. Well done con/lib on this one!

  • rate this
    +7

    Comment number 69.

    For those who are currently on JSA, are on the work programme, where, they can have access to the internet. I(and the company I work for) have helped hundreds register online and some are amazed and how easy it is.

    Don't knock it, until you've tried it. If you need help, there IS help out there if you get off your rear end and find it.

  • rate this
    +6

    Comment number 68.

    Well as welfare is the biggest gov spending bill anything that can simplify this and pass the money onto the MOST needy as opposed to the MOST wanting must be a good thing.

    And in 2013 if people cant trust themselves not to spend the rent money then there is something wrong...

  • rate this
    +2

    Comment number 67.

    Bottom line, people will still get enough money to get them by, stop moaning over free money and get on with it. no matter what decision the government makes the unemployed general public will always have a
    problem.

  • rate this
    0

    Comment number 66.

    "The truth is the scheme is late, over budget, the IT system appears to be falling apart & even DWP [Department of Work and Pensions] ministers admit they haven't got a clue what is going on."

    This should be interesting then.

    What's the betting that by the time all the wrinkles have been ironed out it will be an even more expensive Gordian knot than previous.

    Still once more into the breech

  • rate this
    +34

    Comment number 65.

    It would seem to me that the time and money invested into this scheme would be far better spent in improving employmment prospects so that people don't need to claim the benefits in the first place!

  • rate this
    +5

    Comment number 64.

    Create an efficient economic model that does not generate large numbers of unemployed people - learn from nature.

    Do you ever see any unemployed ants or bees?

    No. Yet we think we are more intelligent than these species. We are not.

  • rate this
    +10

    Comment number 63.

    There is the view that all people on benefits are scroungers (which is being heavily popularised in the tabloids) or there are those who think the people in receipt are the most needy in society. While there is little doubt that some abuse the system; they are not the ones who will lose out from change - those who have the lowest understanding and most restricted access will suffer.

  • rate this
    -2

    Comment number 62.

    The problem is that it is often the case that getting a job will pay you less that being on benefit. What incentive is that to work? I don't think the child allowance changes went far enough. We should only pay for the first two children. if a couple decides to have more, then they will need to pay for the upkeep themselves, like us wage earners.

  • rate this
    +6

    Comment number 61.

    60% of claimants in the East End of Glasgow have no access to the internet and 25% don't have access to a bank account - as yet no answers from DWP as to how these people will be engaged with and helped.

    UC is a disaster waiting to happen and will solve none of the problems if the vacancies exist for people to move into employment.

    Major benefit reform should have been done 10 years ago.

  • rate this
    +9

    Comment number 60.

    I wonder what will happen to the older unemployed who really want to work?

    Anecdotally I'm told there are vacancies out there but employers apparently are hiring younger workers (cheaper) & blatantly ignoring older people (despite legislation) or not even considering their transferable skills to allow them to move industries.

    Seems a waste, but symptomatic of attitudes of employers today

  • rate this
    -3

    Comment number 59.

    @42.Nomad

    No, If you had ever been into a library or local council offices in the last decade you would have seen the computers that are made available to the public/residents to access these online facilities.

    The staff there will also help get people started...I doubt it's just my area that does this.

  • rate this
    0

    Comment number 58.

    Is this the first true (well admitted anyway) liblabcon policy?
    Be interesting to see if it works.

  • rate this
    0

    Comment number 57.

    30 years ago I signed-on late, so the DHSS made me provide a written excuse for being late. I wrote "I am late because I was kidnapped by aliens and taken to the planet Uranus."

    Today I placed an ad for an employee for my growing IT company on the government's jobsearch website.

    How the tables have turned!

  • rate this
    +5

    Comment number 56.

    So, which large international consultancy was paid millions to upgrade the IT systems for this?

    Do they evade taxes in the UK?

    How many bugs did it end up with? How many features had to be redone? How much did they went over budget this time around?

    As an IT professional I can tell you that the standard of work in IT projects is appalling: connected companies paid luxury fees for shoddy work.

 

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