Universal Credit was introduced in 2010 and it was designed to simplify the benefit system. Multiple benefits and situations are rolled into a single payment which is paid monthly rather than weekly.
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The payment is paid directly to the claimant who will then be required to cover their costs with it.
As it stands, there are six existing benefits that Universal Credit replaced and/or merged together.
These legacy payments are:
- income support
- income-based jobseeker’s allowance
- income-related employment and support allowance
- housing benefit
- child tax credit
- working tax credit
The rollout of Universal Credit has proven to be controversial however.
There have been reports and cases of people losing income as a result of moving to the new system.
Because of this, some claimants have been hesitant to move from the old benefit payments to the new one.
Universal Credit was supposed to completely replace legacy payments by a certain time frame but the deadline has been continually extended.
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Legacy benefit receivers will eventually need to move to Universal Credit.
There are two types of migration:
• Natural migration – This will happen when a new claim is made because of a change in circumstances
• Managed migration – The Department for Work and Pensions will ask the claimant to move to the new system despite there being no changes
The DWP has eventual plans to move all benefit receivers into Universal Credit through managed migration but this will not be completed for some time.
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It will not be actioned fully until November 2020 at the earliest and the deadline was recently pushed back to September 2024.
The system will likely put this issue to the back of the queue too as coronavirus has created other priorities for the state.
As the disease continues to wreak havoc on the economy, more people are likely to sign up to Universal Credit.
So far, this has put unprecedented demand on the service. Waiting times for the phone lines have seen drastic increases and the state has planned to bring in more staff to help the system cope.
Rishi Sunak in recent weeks has also made many changes to Universal Credit which will impact claimants further.
Physical assessments have been scrapped and all management of payments must be done either online or over the phone. On top of this, payments themselves have also seen a boost.
As he confirmed in a recent speech: “To strengthen the safety net, I’m increasing today the Universal Credit standard allowance, for the next 12 months, by £1,000 a year.
“For the next twelve months, I’m increasing the Working Tax Credit basic element by the same amount as well.”
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