Worried About Moving To Universal Credit? You shouldn’t be.
Now and then, when we tell clients they’d be better off on Universal Credit, they say they’re too scared to make the switch and would rather stay on their current benefits.
This fear prevents people from applying and can mean they miss out on extra income while they wait to be switched over to Universal Credit automatically under the Managed Migration process.
Often, the problems people are concerned about can be solved through the way Universal Credit works. Other problems have less of an impact than people first think or can be overcome with a bit of preparation.
We’re going to run through some of the main concerns people have with Universal Credit, and explain why, quite often, there’s nothing (or not much) to worry about.
I Can’t Last Five Weeks Without Any Income
This is easily the most common issue for people switching from legacy benefits to Universal Credit. And it is a problem — one which the advance payment system doesn’t necessarily solve.
As Universal Credit is paid in arrears, there is normally a five-week wait for your first payment, from the date your claim is submitted. You can ask for an advance payment, but this has to be repaid which reduces your future payments. If you need to borrow a significant amount, it can quickly make you worse off on UC while you make repayments, even if you would have been better off without those deductions being made.
But, not everyone will have a 5-week wait between their last legacy benefit payment and their first payment of UC. You also don’t have to borrow the full amount of the advance you’re entitled to.
If you claim Housing Benefit, Income Support, Income-Related Employment and Support Allowance, or Income-Based Job Seekers Allowance, you will receive two-weeks’ worth of payments after you apply for Universal Credit, without it affecting your first payment of UC.
Essentially, it reduces the wait for your first payment to three weeks — one more than you’re used to between your legacy benefit payments. While this could still make things tricky, it should help reduce how much you need to take as an advance, if you need to at all.
I Struggle to Budget and Can’t Manage Monthly Payments
Universal Credit is paid in full to you in a single monthly payment and you are responsible for paying all of your bills — including your rent — from the money you receive. This is the standard position, but the DWP does have flexibility to change the way your payments work.
Many people, especially those who have struggled to manage their finances in the past, have agreed Alternative Payment Arrangements with the DWP. These arrangements allow the DWP to pay your housing element directly to your landlord and can split your remaining Universal Credit into two monthly payments, making it more like the legacy benefits you are used to.
I’m not fit for work. Will the Jobcentre make me look for work?
If you attended a Work Capability Assessment while on ESA, it’s the same as the one for Universal Credit.
As long as there is no gap between your ESA claim ending and Universal Credit claim starting, you should be put into the same work capability group as you are already in. For example, if you are in the Support Group for ESA, you’ll automatically go into the Limited Capability for Work Related Activity group on Universal Credit. So, you won’t have to look for work.
If there is a gap between your claims, or you haven’t had an assessment yet, you might need to attend a Work Capability Assessment for Universal Credit. There are situations where you can still rely on an old assessment, so talk to us if you have any concerns.
A Work Capability Assessment will take place 3 months into your claim, so you’ll need a fit note from your doctor for the first few months to make sure you aren’t asked to do anything you cannot do.
Your Claimant Commitment is supposed to be tailored to your specific needs and circumstances. So, if you’re too ill to work, haven’t had a Work Capability Assessment, and your work coach is asking you to do something you aren’t capable of doing, you should ask them to change your work search requirements and make a complaint if they don’t.
Contact your local Citizens Advice if you need help with this.
I Will Be Worse Off If I Claim Universal Credit
If you’ve done a benefit calculation, you’re sure that it’s correct, and it says you’ll get less money when you claim Universal Credit, then you should stay as you are.
“That’s fine,” you might say, “but the DWP have told me I have to switch.”
In this case, you won’t be worse off. The DWP have confirmed they will pay a Universal Credit element they are calling ‘transitional protection’. Essentially, this is an amount that will top up your Universal Credit so you’ll be paid the same amount as you were getting on legacy benefits.
The transitional element will be paid at a rate that maintains your current payments until your entitlement to Universal Credit matches what you were getting before — either by the Universal Credit amounts increasing year-by-year, or because you become entitled to an additional element of Universal Credit.
I’m still completely lost — what should I do?
If you’re confused, worried, or just unsure what to do next… call us!
Our advisers are trained to explain the Universal Credit system and identify the best option for you. Our services are always free, confidential, independent and impartial.
Call 0800 144 8 444 or visit one of our offices if you need help making your claim for Universal Credit.
If you are claiming Tax Credits, you can get help through our HMRC project by filling out this registration form. Our HMRC adviser is also available for drop-in face-to-face advice at Burnley Central Library every Tuesday between 9 am and 12 pm.
Disclaimer: This information was correct at the time of publishing on 8 August 2022 and is provided as a guide only. It is not a recommendation to take a specific action and we suggest you speak to an adviser if you have any doubt about how this information applies to you.
