Universal Credit (UC) is a means-tested benefit for everyone of working age – those who are unemployed, those who are unable to work, and those who are in work but not earning much. It is replacing means-tested Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Housing Benefit, Working Tax Credit and Child Tax Credit. (Contribution-based JSA and ESA continue as before, but are now called New Style JSA/ESA.) Universal Credit was heralded as a simplification, but – as has been demonstrated time and again – it is making life far from simple for thousands of families. This is partly due to deliberate cuts and rule changes, and partly to a criminal level of administrative chaos. Major additional cuts include less help for people in work and no more disability premiums. IT failures, unclear rules, understaffing, and undertraining have left a trail of mistakes and delays.
Once you are on Universal Credit, you stay on Universal Credit when moving in and out of work unless you earn over a fixed limit. Although the UK Government claims that UC ‘makes work pay’, if you get a bit of extra work you will still lose 63p for every pound earned.
UC is being introduced in stages – which is taking much longer than originally planned. The first people signed onto the benefit were single jobseekers making new claims, who stayed on UC even if their work or family situation changed. Currently, more and more areas are coming under the Universal Credit Full Service, where all relevant new claims are sent down the Universal Credit route, and also have to be done online. Since the beginning of 2018, no new people are being put onto Universal Credit outwith these Full Service areas. You can check your situation here.
If you are on UC in an area that is not yet in UC Full Service, you may still be able to escape back to the earlier system. You can check out advantages and risks here.
UNDERSTANDING THE SYSTEM – KNOWING YOUR RIGHTS
You can’t rely on the DWP knowing their own rules, or acting promptly on information given them, so you need to be aware of your rights and make double sure they receive all necessary information.
What does the Universal Credit roll-out mean?
When an area changes from UC ‘Live Service’ to UC ‘Full Digital Service’, then everyone who makes a new claim for a means-tested working-age benefit will have to apply for UC instead. If you are already on one of the earlier benefits you won’t have to move to UC until at least July 2019 unless a significant change of circumstances means you have to make a new claim. You should not have to reclaim and change benefits for simply moving address, as demonstrated in this legal case. The jobcentre may try and persuade you to change over, but unless you have to make a new claim you can say no.
All claims have to be made and managed on line
The DWP wants to make everyone manage their benefits on line. Outwith UC you should be able to use other means of communication, but if you are on UC in a Full Service area you are expected to use a computer even if that means relying on friends or family. Councils are being paid to provide computer rooms and training. If using a computer is impossible then you are supposed to ring the UC helpline (0800 328 5644), but they’re not much help. You will need to give an email address – which needn’t be the same as you use for other things.
Everything is managed via your online account. The DWP will use your online account to tell you things to do, so you need to check it regularly to avoid getting sanctioned. You are also expected to use it to contact them, but experience has shown that they don’t check it regularly, so if you need an urgent response you may have to use the helpline as well, or write a letter, or get help from a welfare advisor. Keep a written record of all calls in case of any dispute. (There may be things that don’t legally have to be communicated online, but arguing the point could cost you a delay in your benefits. Similarly, you may think that data they are requesting is not relevant to your eligibility, but any dispute could leave you in moneyless limbo. If you object strongly to this you could put in a complaint afterwards.)
When to claim
You need to put in your claim almost as soon as you are eligible as there is no scope for backdating, however it’s usually best to wait until after you have received any final payment from your last job in order for that payment not to be included in the first month’s benefit calculation.
If you are returning to Universal Credit after less than six months, you can sometimes lose money if you delay signing back on for more than a week after you end work.
Demands for further supporting documents have proved a major source of delay. The DWP are not good at specifying what they need so bring everything that might be relevant to your initial interview.
For problems with proof of identity see here.
For problems with evidence of your rent see here.
The initial wait
Even if all goes smoothly, you will have to wait a minimum of 5 weeks for the first payment as the benefit is paid a month in arrears and it takes a further week for the money to go through. Often, bureaucratic inefficiencies make the wait much longer. (If the DWP is taking ages to come to a decision, your only redress is a letter of complaint, where you can make it clear that if they don’t sort your benefit you will take them to judicial review.)
You can ask the jobcentre for a Benefit Advance, which has to be paid back from future benefit payments. The UK Government seem impervious to the hardship this is causing – though they were persuaded to try and divert their critics with some small concessions in the Autumn 2017 budget. If you can’t cope you can ask your local council for a Scottish Welfare Fund emergency grant, but they will expect you to have exhausted the advance loan first. If you are having trouble (e.g. in paying the rent), contact local advice services before the problems get even worse and harder to deal with. (This will help them keep a record of what is happening too.)
See here for more details about payment delays when you go in and out of work and the significance of when you sign on.
To receive UC you need to have a bank or building society account. In Scotland, new claimants will be asked via their online account if they want to have the portion for rent paid directly to their landlord, and if they would prefer to have their money paid twice a month rather than monthly. This is done by delaying the second half of the second and subsequent payments, so is not as helpful as it should be. (The Scottish Government also has powers to allow people to choose to be paid singly and not as a couple, but this is proving even more difficult to arrange, so can’t be offered yet.)
HB is included in UC. This means that in a UC Full Service area it is no longer possible for someone on no or low income to make a new claim for HB on its own. (You still need to go to the council for Discretionary Housing Payments – e.g. to cover the bedroom tax – and to arrange for a Council Tax Reduction.) If you are already receiving Housing Benefit when you apply for Universal Credit you can continue receiving this for the first two weeks of your claim. If you are in work and your Universal Credit is reduced because of your earnings, a sanction will still cut your benefit by the equivalent of the Personal Allowance (£73.10 for a single adult over 25). This means that part of the sanction will be taken from the elements that have replaced child tax credits, housing benefit etc. If someone in part time work is sanctioned they could therefore be left without enough money to pay the rent.
Looking for work
The jobcentre will make you sign a Claimant Commitment listing what you must do. This is supposed to be ‘reasonable’, but you have limited room to negotiate – without signing you won’t get paid. (If you are unhappy with what you are being made to agree to do, and make a formal request for a second opinion that doesn’t go in your favour, your claim will be stopped and you have to start again.) You will be made to search for work 35 hours a week, unless you have particular issues such as childcare or poor health, when you should only be expected to look for part-time work. We can help you explain your situation, and you could try and suggest your own choice of voluntary work or courses.
Check whether any activities you are asked to do outwith your Claimant Commitment are mandatory. Mandatory activities – termed requirements – are supposed to be reasonable in your particular circumstances and the DWP must follow strict procedures; if not you have grounds for complaint. If you’re 18-21, and have been on UC and unemployed for more than 6 months, you’ll be sent for training or a work placement. If you chose to do an activity that is not mandatory, you should check whether you are also free to leave when you wish. If you are sent on a mandatory work placement you can still refuse to sign the documents that are needed for them to process it, so long as you show willing to do everything else. (Contact us, or see our Work Programme Survival Guide.)
If you want to avoid hassle it helps to be able to give a good account of your ‘35 hours’ jobsearch’. Knowing what they are looking for makes this easier – so here is some advice given to ‘Work Coaches’ – courtesy of Ipswich Unemployed Action:
The sanction regime is similar to before, with sanctions increased for repeat ‘offences’. If you miss an appointment or activity – explain why asap. If you are sanctioned – challenge the decision. The first step in challenging any DWP decision is to ask for a Mandatory Reconsideration. It will then be looked at again by another person within the DWP. In light of DWP inefficiency and intransigence you could do this by letter (keep a copy) as well as on line. Explain why you should not have been sanctioned. If the Mandatory Reconsideration doesn’t work you can take your case to appeal. It will then be heard by a tribunal independent of the DWP. Many people give up at the first stage, but if you stick with it you have a good chance of success. Check if the DWP have followed procedure, and note that the law only requires you to ‘take all reasonable action for the purpose of obtaining paid work’, even if that takes less than the stipulated number of hours and you have not followed your Claimant Commitment to the letter (The Universal Credit Regulations 2013, p51 clause 95).
The Child Poverty Action Group has lots of good advice on avoiding and fighting sanctions here.
If you challenge your sanction, they may think twice about sanctioning you again; but if they do, and your challenge of the first sanction was successful, the second sanction won’t be as long as it would have been.
You can ask for Hardship Payments, but, like the advance, Hardship Payments under UC are loans that have to be paid back, so you are on reduced rates for 2½ times the length of your actual sanction. You have to reapply for Hardship Payments each month. They are discretionary, so you may not be given them if they think you can get help elsewhere.
You can ask your local council for a Scottish Welfare Fund grant to cover any gaps, but they will expect you to apply for any Hardship Payments you are entitled to first.
When sanctioned, you still need to keep signing on and doing the tasks set or you’ll be sanctioned further (with the new sanction added on the end of the current one), and even if you have secured a job you will have to keep up with your required tasks to the last minute. If you sign off and on again, unspent sanctions can be carried over.
If you get ill
Universal Credit incorporates means-tested ESA. If you are on UC and are found to be unfit for work you should no longer be made to apply for jobs. If you are also found unfit for work-related activity you should not be given other things to do either, and you should get an additional ‘limited capability for work-related activity’ element on your UC. It’s basically similar to the old ESA – but without the premiums! Once you have been on UC and on doctor’s lines as unfit to look for work for four weeks, the DWP should send you a UC35 form to apply for being treated as unfit for work long-term. If you haven’t received the form when you should have done, then ask for it as delays are not uncommon. This form will eventually lead to a detailed medical form (a UC50) and a Work Capability Assessment, as with ESA. Get help from a welfare advisor when you fill the medical form, and get a friend to come with you to the assessment. If you are on UC and waiting for an assessment you will still be expected to look for work and carry out other activities. To avoid these you will need to argue – with the help of your GP if possible – that there would be substantial risk to your health if you were treated as fit to look for work or made to do certain things, and it is not reasonable to expect you to do these.
If you applied for ESA before your area changed to UC Full Service but have been found fit for work.
If you have been turned down for ESA because you didn’t get enough points from your Work Capability Assessment you can ask for a Mandatory Reconsideration. While this is looked at, the only way you can receive any benefits is by signing on as though you are actually fit for work. Once you have signed on you can ask your doctor for a note to say that the pressures from the jobcentre are making your health worse and you are not able to work – what DWP logic now calls a ‘fit note’. If the Mandatory Reconsideration doesn’t work (most don’t) get a Welfare Rights advisor to help with your appeal. Appeals have a good rate of success. If you are in a Full Service area and have to sign onto Universal Credit, then, if you win your case, instead of means-tested ESA you will stay on UC, as described above. If you can survive temporarily with the help of family and friends, then please get advice from a Welfare Rights advisor before applying for UC and getting stuck in the UC system, as you could be worse off in the long run (e.g. under UC there are no disability premiums). Also, if you are still in the old system you should be able to go back on basic ‘assessment phase’ ESA once you have put in an appeal, but if you are on UC you will stay on that and can be put under pressure to work.
Universal Credit for people in work
UC is replacing tax credits for people in work. If you are currently receiving tax credits you will stay in that system for now, but if you are already on UC and start work, or you make a new claim in a Full Service area, then you get UC instead. To qualify for Working Tax Credit you have to work over a fixed number of hours a week (30 if you are single with no kids). You get Universal Credit however many hours you work (so long as you are not earning above the limit); but if you are earning less than what you would get for your expected minimum number of hours – generally 35 unless you have caring responsibilities or are sick or disabled – you will be under similar pressures to find more or better paid work as people who are unemployed. This means that low paid part-time workers can be sanctioned too.
On the, decreasingly small, positive side of the balance, if you are working and on UC you can apply for help with child care, and the drop in your benefit when you start working a few hours a week is not quite as drastic as with Jobseeker’s Allowance. However, because you stay on Universal Credit any way, if you are unemployed and offered a part time job or zero hour contract you will be required to accept it.
Irregular pay and self- employment
UC is calculated independently each month. If you earn a lot one month and receive little UC, you can’t make up for this the next month even if your earnings are tiny, so irregular pay can result in loss of benefit and considerable hardship. Try and arrange for earnings to be staggered if you can.
UC makes it harder to be self-employed in other ways too. You are expected to produce mountains of paperwork each month, and after the first year of self employement, the DWP will assume that you are always earning at least what you would get in a minimum wage job and working your full number of hours – normally thirty-five hours a week, unless you have caring responsibilities or are sick or disabled. If you actually earn much less, your UC will still be calculated as if you were earning that full sum – and you can also be made to look for additional work and do other tasks, under threat of being sanctioned. Even before then the DWP can decide that you are not earning enough and must look for something else. The problems were made clear in this Channel 4 News report.
Since April 2018, extra money earned one month is carried over to reduce the UC received the following months. Losses can be carried over too, but not low pay; and previous earnings won’t be taken into account when considering whether to make you look for more work – so this has solved none of the problems identified above, while adding an extra complication.
You might want to check out the implications of all this with a welfare advisor before making the decision to become self-employed.
Unlike JSA, Universal Credit has no allowance at all for holidays, including for people getting UC to top up income from work. You can find more details of what this means here.
Three or more children
The UK Government’s decision not to give extra help for third and subsequent children unless they were born as a result of rape, is so toxic that they have not yet worked out how to implement it. For now, until November 2018, larger families will claim on the old Tax Credit system.
GENERAL ADVICE FOR CLAIMANTS
Bring a friend
You can bring someone with you to any jobcentre or DWP interview. This is your legal right, and we recommend you use it. Your friend may speak to support your case, including asking questions. We can try and find someone to come with you to your interview – just contact us through phone, email or facebook – and try not to leave it till the last minute.
Make your own record of your meetings and keep copies of everything
You may need to know and be able to prove everything you have or have not been told, or have done, especially if you are sanctioned as a result of a mistake that is not of your making. Most things will be in your online record, but you should keep screenshots of key exchanges, as if your claim is shut down you need access to this material to make the case for them to rethink their decision. You can also ask your advisor to write down everything they are telling you to do. You, or your accompanying friend, are allowed to take notes of meetings, which you don’t have to show the jobcentre. You can also make an audio recording. You are entitled to make a recording for your own use, but the DWP can be obstructive, and it is generally easier to do this covertly. Lots of documents get ‘lost in the system’ resulting in delays in benefits, and even in sanctions. So keep a copy of everything you send the DWP.
Ask for the extra help you need
When the DWP has left you destitute you can still get help. Charities provide cooked meals most days, and welfare advisors can refer you to food-banks for basic supplies. They may also be able to get you help with fuel charges, e.g. an advance from your supplier.
You can ask your local council for help from the Scottish Welfare Fund. This gives crisis grants, generally in the form of supermarket vouchers.
Ask if the jobcentre’s Flexible Support Fund can help with costs (e.g. for travel to interviews, for interview or work clothes, or for training and certification).
You may also be able to get a Budgeting Advance for one-off essential items from the DWP, paid back off future benefits. Ask the Jobcentre for a form, or apply on line.
MPs and MSPs are a good last resort.
When you ask for help this doesn’t just help you and your family. It creates a record of what UK government policies are doing and provides important evidence in the campaign against their attack on welfare.
ALWAYS REMEMBER THAT YOU ARE NOT ALONE
The rules are complicated and always changing, so ask for the advice you need – and get someone who knows the system to help you with any ESA or PIP medical assessment forms or appeals as this can make a big difference to your chances of success.
CALCULATING THE AMOUNT OF UNIVERSAL CREDIT YOU WILL RECEIVE
The basic principles of the calculation are set out below. (For fuller details and an online calculator, try Turn2us.)
Work out the MAXIMUM that would be received if there was no other income by adding:
the STANDARD ALLOWANCE – which, as now, depends on if you are single or a couple and if you are over 25
PLUS ELEMENTS FOR PARTICULAR CIRCUMSTANCES – which were formerly covered by other benefits (for: children, children on DLA, limited capability for work, limited capability for work related activity, being a full-time carer, 85% of childcare for working parents, rent)
unearned income (but not disabled benefits or child benefit)
AND 63% of earned income above the Work Allowance
(The Work Allowance – the amount you are allowed to earn before it affects the benefit – depends on your household type and if you are receiving the housing element. It has already been heavily cut.)
The calculations are based on the actual situation each month
This avoids the current problems with Working Tax Credits overpayments, but creates lots of anomalies for people with irregular earnings, where a lot depends on the dates when money is actually received (see above).
Written 7 November 2017, updated 12 November 2017, 5 December 2017, 22 January 2018, 28 January 2018, 29 January 2018, 22 August 2018