Universal Credit new rules: What you need to know about the benefit changes coming into force today

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The new Universal Credit rules will impact over 180,000 claimants.

Hundreds of thousands of people will be impacted by the new Universal Credit changes coming to force this week (May 13).

Over 180,000 people claiming benefits could be required to look for work with the new changes which come into force as part of the Government’s £2.5 billion Back to Work Plan.

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The Government makes “no apologies” as they believe the new policy will allow people to “achieve financial security through work”, “grow the economy” and “help people build a better life for themselves” as there are currently over 900,000 job vacancies in the economy.

What is Universal Credit?

Universal Credit is a monthly payment to help individuals with their living costs.

It replaced the legacy Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker’s Allowance (JSA), income-related Employment and Support Allowance (ESA) and Working Tax Credit.

Who is eligible for Universal Credit?

You may be eligible if you’re on low income or need help with your living costs.

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You could be out of work, working (including self-employed or part time) or unable to work (e.g. because of a health condition).

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To receive Universal Credit, you must live in the UK, be aged 18 or over, be under State Pension age and have £16,000 or less in money, savings and investments.

If you live with your partner, you will need to make a joint claim for your household even if your partner is not eligible. If only one of you has reached State Pension age, you and your partner can still claim Universal Credit as a couple, and if you’re getting Pension Credit, it will stop if you or your partner make a claim for Universal Credit.

You and your family may also need settled or pre-settled status under the EU Settlement Scheme if you are an EU, EEA or Swiss citizen to claim Universal Credit.

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You can also receive Universal Credit if you’re in full-time education and:

- you live with your partner who is eligible for Universal Credit

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- you are responsible for a child, either as a single person or as a couple

- you’ve reached State Pension age and live with a partner who is below State Pension age

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- you’ve received a Migration Notice letter telling you to move to Universal Credit

You may also be eligible if you are 21 or under and studying any qualification up to A level or equivalent and do not have parental support.

You may also claim for Universal Credit if you’re 16 or 17 and:

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- have a health condition or disability and have medical evidence for it, such as a fit note

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- you’re caring for someone who gets a health or disability-related benefit

- you’re responsible for a child

-you live with your partner, have responsibility for a child and your partner is eligible for Universal Credit

- you’re pregnant and expecting your baby in the next 11 weeks

- you’ve had a baby in the last 15 weeks

- you do not have parental support (e.g. you do not live with your parents and are not under local authority care)

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How to sign up for Universal Credit?

You will need to complete your claim within 28 days of creating your Universal Credit online account.

If you live with your partner, you will both need to create accounts and link them together when you claim.

To apply, you will need your bank, building society or credit union account details, an email address and access to a phone.

For more details on what you need for the application and how to contact the Universal Credit helpline, visit: https://www.gov.uk/universal-credit/how-to-claim

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How much is Universal Credit?

If you are single and under 25-years-old, you will receive a monthly allowance of £311.68.

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If you are single and 25 or over, the monthly allowance increase to £393.45.

Couples who live together and are under 25 will receive £489.23 for both, while if either either of you are 25 or over, you will receive £617.60 for both instead.

If you have limited capability for work and work-related activity, you may be entitled to an additional £416.19 and £156.11 if you have limited capability for work and you started your health-related Universal Credit or Employment and Support Allowance (ESA) claim before April 3, 2017. If you live with your partner and you both have limited capability for work and work-related activity, you’ll only get one extra monthly amount.

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Additional Universal Credit based on how many children live in the household

You may receive an extra amount if your children live with you until August 31 after their 16th birthday or 19th birthday if they are in eligible education training (e.g. studying for GCSEs, A levels, BTECs, Scottish Highers and SVQs or NVQs up to level 3).

The extra amount will be for your first and second child only unless your children were born before April 6, 2017 or you were already claiming for 3 or more children before April 6, 2017. To learn about other exceptions to the rule, visit https://www.gov.uk/guidance/universal-credit-and-families-with-more-than-2-children-information-for-claimants#special-circumstances

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You will receive £333.33 each month for your first child if they were born before April 6, 2017, £287.92 if they were born on or after April 6, 2017, and £287.92 per child for your second child and any other eligible children.

You will also received £156.11 if your child is £487.58 if your child is severely disabled regardless of how many children you have.

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Universal credit support with childcare costs

You can also claim back up to 85% of childcare costs including nurseries, childminders, breakfast clubs, after school care and holiday clubs if you are working.

If you live with your partner both of you need to be working, unless one of you is unable to work due to a disability or health condition.

You will need to pay the childcare costs up front and claim the money back as part of your payment. You can receive up to £1,014.63 for one child and up to £1,739.37 for two or more children per month.

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When if the first Universal Credit payment?

It usually takes around 5 weeks to get your first payment. If you need money while you wait for your first payment, you can apply for an advance.

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You will be paid on the same date of every month after the first payment.

If the payment date falls on a weekend or a bank holiday, you’ll get paid on the working day before.

What are the changes to Universal Credit?

From this week (May 13), the Administrative Earnings Threshold (AET) will change from 15 hours of work per week to 18 hours a week.

This means that anyone working less than half a full-time week (18 hours) and earning less than £892 per month - or 29 hours a week and £1,437 for couples - will have to look for more work.

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These claimants will be moved into the “Intensive Work Search group” where they will have more regular meetings with their work coach to plan their job progression, boost they earnings and advance the journey off welfare altogether.

They will also need to provide evidence of steps they are taking to improve their chances of employment (e.g. registering with an employment agency or making job applications).

Failure to meet the Universal Credit commitments can lead to the benefits being cut or stopped altogether. You will be exempt from the sanctions if you are unable to work due to long-term sickness or a disability.

Why are the changes to Universal Credit taking place?

The changes come after Prime Minister Rishi Sunak announced a once in a generation package of welfare reforms last month as part of the Government’s £2.5 billion Back to Work Plan which provides support to over a million people to break down barriers to work.

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He said: “Welfare should always be a safety net, and not a lifestyle choice which is why we’re ushering in a new era of welfare reforms to help more people progress off benefits and into work.

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“Today’s changes will help more people on Universal Credit move into well paid jobs and progress towards financial independence – which is better for them and for the economy.”

Mel Stride MP, Secretary of State for Work and Pensions, added: “We will always back those who want to work hard, and today we are radically expanding the support available to help people progress in work.

“With the next generation of welfare reforms, I want to help thousands of people on their journey off benefits and towards financial independence.

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“Our plan is making work pay, with people in full-time work now £7,000 better off than on out of work benefits, and our tax cuts putting £900 back in the pockets of millions of workers across Britain.”

The Government believes the changes to the AET alongside previous increases, will see around 400,000 more people actively seeking work, and support the economy which currently has over 900,000 job vacancies.

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