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

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

    Comment number 115.

    Pointless to comment as this medium is one sided. The Tory party are as they were in the eighties and will eventually make those at the bottom end suffer. I find there attitude when addressing the public pompous, they speak to people as if they are something on there shoe.

  • rate this

    Comment number 114.

    @59. LB

    Try telling that to my towns now unemployed librarians - my local library was closed recently due to cuts, so was the swimming pool. Our local council office and Job Center is in the next town over - 6 miles away and no library there either, but a 5 quid return on our non existent public transport - 1 bus every couple of hours and no train or trams

  • rate this

    Comment number 113.

    101. DRob
    I have friends on benefits and really think it won't work doing monthly payments.

    Daftly the money will get spent within the first few days, leading to pay day loans being used :/


    Unfortunately, for these people, it's part of life. You have to learn to budget and get by like a grown up. If you can't do that, you deserve to be stuck in a mess. Learn the hard way

  • rate this

    Comment number 112.

    And all this because they dont want to tackle the Banks.

    I see theres no mention that the Government is forcing councils to also hike council tax to benefit claimants.
    The people at the bottom are easy targets , next move will be to remove the vote from them......

  • rate this

    Comment number 111.

    As soon as people realise that the Social security system is there to support people that have hit hard times until the can get back on their feet the better.

    Benefits would probably be higher for those that really need them, e.g. the Disabled, once you remove the lead swingers from the pot, but you cant make an omelette without breaking eggs, but that's the price you have to pay.

  • rate this

    Comment number 110.

    liam byrne said this morning that if the government built more houses and invested more for more jobs...then not so much would be needed on benefits...fine.....so was it not the last labour government that allowed mass immigration that has led to high unemployment and a multitude of other problems.

  • rate this

    Comment number 109.

    The changes will deter landlords from letting out to benefits claimants,which will cause a shortage in housing. Not that I have any sympathy with landlords,it's just an observation.

  • rate this

    Comment number 108.

    Benefits and use of the NHS should ONLY be for the indigenous population.

  • rate this

    Comment number 107.

    To suggest all people on benefits are work-shy is wrong, i know, but there a too many people who expect to be spoon fed through life because they believe the world owes them a favor.

    I agree with the idea that these people should be forced to take responsibility for themselves and face the consequences of irresponsible actions.

  • rate this

    Comment number 106.

    ...getting a job will pay you less that being on benefit. What incentive is that to work?


    However the usual solution, and by the looks of comments and ratings here the most popular, is to cut benefits.

    How about legislating so that people are paid a wage they can live on instead of beating them with a stick?

    No, too much for the I, me, mine brigade...

  • rate this

    Comment number 105.

    @88. Why do you think that is? Could it possibly be that unionised civil servants, who have watched as their colleagues have been made redundant by these changes, might be dropping the odd spanner in the works so that it fails? Who gets the blame - the government of course!

    I'm all for the changes - less bureaucracy and fraud means more for those who need it.

  • rate this

    Comment number 104.

    Money given to the poor is often spent recycled back into the system, which is why people tend to remain poor. Will changing this cycle create other costs?

    Employment is suitable for those who are realistically capable of generating PROFITABLE EMPLOYMENT. The welfare system is supposed to support those who are facing challenges which make it very difficult to deliver 'profitable employment'.

  • rate this

    Comment number 103.

    This is like a poll tax via the back door. Not only those on benefits affected those on in works benefits will be affected too.
    The bedroom (under occupancy) tax and resultant cut in income means that people now have to pay landlords direct from dwindling resources.
    Rent arrears rise, evictions increase and buy to let landlords flood the housing market as rent returns drop.
    Depression beckons.

  • rate this

    Comment number 102.

    The tories are imposing a system of starvation and homelessness on the poorest people in this country. I think politicians get some kind of sadistic pleasure out of watching children go hungry.

  • rate this

    Comment number 101.

    I have friends on benefits and really think it won't work doing monthly payments.

    Daftly the money will get spent within the first few days, leading to pay day loans being used :/

  • rate this

    Comment number 100.

    Public sector cuts before benefit cuts. Cut the wages & pensions of doctors, teachers and civil servants - the new bankers.

  • rate this

    Comment number 99.

    If you lose your job and need a bit of help from the state it seems the state is going to do its best not to give you any help,so why should we help the state? Why pay income and council tax,what exactly are we getting back? Lets abolish tax and the money we save we could use ourselves if we fall on hard times instead of having to go begging to the government,same with pensions.

  • rate this

    Comment number 98.

    The Conservatives like to brand most unemployed and disabled people as "Benefit Scroungers" but remain tight-lipped to the fact that 300+ FOOD BANKS have sprung up throughout the country to feed starving and pennislees families. We really need your help...look up FOOD BANK UK. With new Benefit cuts here, things will get MUCH worse.

  • rate this

    Comment number 97.

    This is not going to work for private landlords .
    When the scheme to pay direct to tenants was piloted in Blackpool I lost thousands of pounds in unpaid rents which the tenants spent on " other " things .
    Then the scheme was rolled out and the problem was made much worse and I lost a lot more money in unpaid rents and when Universal Credit comes in I know that I will be losing everything .

  • rate this

    Comment number 96.

    I don't see how it's in the publics interest that it might be harder for some individuals to keep track of their money. Quite frankly, deal with it like the rest of the world. If it were up to me people wouldn't be getting cash, they would get food stamps, bus stamps on request (to attend job interviews) and some heating/electric stamps but not enough to survive comfortably, just survive.


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