Universal Credit

Universal credit was introduced in early 2015 (February) and now in May 2016 is being rolled out across the rest of the country.

Universal credit, the brain child of the former DWP lead Ian Duncan Smith, merges the following benefits:

1. Income-based Jobseekers Allowances
2. Income-Related Employment and Support Allowance
3. Income Support
4. Child Tax Credit
5. Working Tax Credit
6. Housing Benefit

The changes from today mean that anyone entering the Job Centre to claim jobseekers allowance will now be applying for Universal Credit. This in turn means that if you have the need for any of the aforementioned areas of financial aid the cap set on universal credits (£2,167 for couples/lone parents or £1,517 per single person) will be applied to all the above – but that’s not all.

The cap will also incorporate:

• Bereavement Allowance
• Carers Allowance
• Child Benefit
• Incapacity Benefit
• Maternity Allowance
• Reduced Earnings Allowance
• Severe Disablement Allowance
• Widowed Parents Allowance

Are there any positives?

1 – Well it should be a simpler process, one benefit, one form – but it would be much more complicated to breakdown the elements needed and understand exactly what you are getting for each element of living

2 – It’s a great time to be a Pensioner as you will be exempt from the benefits cap (even if you’re in a partnership with someone who isn’t a pensioner)

3 – It doesn’t affect you if you, a partner or a child receive:

• Personal Independent Payments
• War Widows / Widowers Pensions
• Working Tax Credit
• Armed Forces Independence Payment
• Armed Forces Compensation Scheme Payments
• Attendance Allowance
• Disability Living Allowance – being replace by PIP
• Industrial Injuries Disablement Benefit
• Limited Capability for Work Related Activity (LCWRA)

4 – working, previously if you worked more than 16 hours a week your benefits stopped, this has been replaced with a monetary amount, £430.00, so if you earn more than this then your benefit will start to reduce

Overall the new system should be clearer given that it unifies a complex muddle of benefits and restrictions. This will allow more effective control on benefit spending by government because benefit payments are viewed as a whole and controls (i.e. limits or caps) can be effectively applied.

New allowances mean that getting a toe hold on the job ladder will actually be low risk and cost to benefits seekers letting them eventually get a foot on the ladder and start climbing.

There is of course a limit set on benefits which will see people loose out and of course with any new system particularly on this broad in scope the devil is in the details.

Can the new system work to a high standard? Will staff, bosses and technicians implement it correctly. Is the DWP actually capable of producing work to a high standard? Is it a slight of hand to introduce ever harsher standards for benefit claims?

From a management point of view this looks efficient and well thought out. But we have serious doubts as weather or not a single financial aid package will truly address the range of people who need to apply for it. No one starts from the same place and many people have far different situations that cause them to require financial aid. So, from a human cost point of view the message is mixed.