Universal Credit is a United Kingdom social security payment. It is means-tested and is replacing and combining six benefits, for working-age households with a low income: income-related Employment and Support Allowance (ESA), income-based Jobseeker's Allowance (JSA), and Income Support; Child Tax Credit (CTC) and Working Tax Credit (WTC); and Housing Benefit.[1][2][3] An award of UC is made up of different elements, which become payable to the claimant if relevant criteria apply: a standard allowance for singles or couples, child elements and disabled child elements for children in the household, housing cost element, childcare costs element, as well as elements for being a carer or having an illness or disability and therefore having limited capability to work.
The new policy was announced in 2010 at the Conservative Party annual conference by the Work and Pensions Secretary, Iain Duncan Smith, who said it would make the social security system fairer to claimants and taxpayers. At the same venue the Welfare Reform Minister, Lord Freud, emphasised the scale of their plan, saying it was a "once in many generations" reform.[4] A government white paper was published in November 2010.[5] A key feature of the proposed new benefit was that unemployment payments would taper off as the recipient moved into work, not suddenly stop, thus avoiding a 'cliff edge' that was said to 'trap' people in unemployment.
Universal Credit was legislated for in the Welfare Reform Act 2012. In 2013, the new benefit began to be rolled out gradually to Jobcentres,[6] initially focusing on new claimants with the least complex circumstances: single people who were not claiming for the cost of their accommodation.[7]
There were problems with the early strategic leadership of the project and with the IT system on which Universal Credit relies. Implementation costs, initially forecast to be around £2 billion, later grew to over £12 billion.
More than three million recipients of the six older "legacy" benefits were expected to have transferred to the new system by 2017, but under current plans the full move will not be completed until at least 2028. The Department for Work and Pensions started full-scale migration in 2023 and by September 2024, all claimants other than claimants on income-based ESA or income-based ESA and housing benefit, will begin migrating to Universal Credit.[8]
One specific concern is that payments are made monthly, with a waiting period of at least five weeks (originally six) before the first payment, which can particularly affect claimants of Housing Benefit and lead to rent arrears (although claimants can apply for emergency loans paid more promptly). In May 2019, one million people were receiving less than their entitlement, often due to the repayment of loans given during the initial five-week wait period.[9]
- ^ "New Style Jobseeker's Allowance". GOV.UK. Retrieved 20 July 2020.
- ^ "New Style Employment and Support Allowance". GOV.UK. Retrieved 20 July 2020.
- ^ "Iain Duncan Smith announces the introduction of a Universal Credit". Gov.uk. Department for Work and Pensions. Archived from the original on 30 October 2012. Retrieved 11 July 2014.
- ^ "Welfare reform will restore fairness, says Duncan Smith". BBC News. 5 October 2018. Archived from the original on 1 December 2017. Retrieved 24 December 2017.
- ^ Universal Credit: welfare that works (PDF) (Report). Department for Work and Pensions. November 2010. Cm 7957. Archived (PDF) from the original on 20 January 2020. Retrieved 1 March 2020.
- ^ "2010–2015 government policy: welfare reform". Gov.uk. 8 May 2015. Archived from the original on 24 September 2018. Retrieved 11 October 2018.
- ^ "90% of jobcentres now offer Universal Credit". Department for Work and Pensions. 22 February 2016. Archived from the original on 22 February 2016. Retrieved 22 February 2016.
- ^ Mackley, Andrew; Kennedy, Steven; Hobson, Francis (11 March 2024). "Managed migration: Completing Universal Credit rollout" (PDF). Contributing authors: Esme Kirk-Wade and Rachael Harker. House of Commons Library. pp. 5 & 6. CBP 9984.
- ^ Jayanetti, Chaminda (23 November 2019). "Million universal credit households do not get full entitlement'". The Observer. Archived from the original on 23 November 2019.