Welfare Reform - Universal Credit
The Government will introduce Universal Credit in a number of ‘pathfinder’ areas from October 2013. The introduction of Universal Credit will be on a phased basis between October 2013 and 2017. Birmingham has not been included in the current roll out of Universal Credit.
From October 2013 ‘working age’ people will start to receive Universal Credit paid each month directly into a bank account, instead of separate benefits.
When more information is available about when Universal Credit will be introduced in Birmingham we will update you.
What benefits will be included in Universal Credit?
The following benefits will be included in Universal Credit:
- Income Support
- JSA income based
- ESA income based
- Housing Benefit
- Child Tax Credit
- Working Tax Credit
What benefits will not be included in Universal Credit?
The following benefits will not be affected by Universal Credit:
- Attendance Allowance
- Bereavement Benefits
- Carer's Allowance
- Child Benefit
- Contributory Employment and Support Allowance
- Contributory Jobseeker’s Allowance
- Council Tax Benefit
- Industrial Injuries Disablement Benefit
- Maternity Allowance
- Pension Credit
- Statutory Maternity Pay
- Statutory Sick Pay
- War Pensions
How will Universal Credit be paid to me?
Universal Credit will be paid monthly in arrears (like most people in work), and will be subject to the new Benefit Cap. It will be paid directly to you, so it will be up to you to budget and prioritise your bills. For most people this means that they will be directly responsible for paying the rent. Pensioners and only certain groups will continue to get housing rent paid directly to their landlord (Birmingham City Council or Housing Association).
How will the Government transfer everyone onto Universal Credit?
The government will transfer people onto Universal Credit over different phases between October 2013 and December 2017. You will be expected to access and manage your benefits online (like online banking).
What can I do to plan for Universal Credit?
It is important that you start planning for Universal Credit early. Things you can do include:
- Set up a Direct Debit now, and we will start to collect the Direct Debit when you move onto Universal Credit or if your Housing Benefit changes before then. For more information visit www.birmingham.gov.uk/payrent
- Set up a Basic Bank Account to receive payments if you do not already have a bank account. For information on Basic Bank Accounts, which also allow Direct Debit payments, visit: www.moneyadviceservice.org.uk
- You can plan for future costs by saving with a Credit Union. For more information on Credit Unions in your area visit: www.birmingham.gov.uk/rent
- Plan your budget using the free online budget planners available at www.moneyadviceservice.org.uk
If you are not a Birmingham City Council tenant, then please contact your Housing Association for further advice.
I do not have a bank account. How will I receive Universal Credit?
You will need to have a bank account to receive Universal Credit. For more information about opening a Basic Bank Account visit www.moneyadviceservice.org.uk.
The government is also piloting several direct payment schemes and we will let you know when we have more information about this.
I currently get some benefits in my name and my partner gets some in his name. Will the Universal Credit be split between us?
No, Universal Credit will only be paid to one person in the household. Therefore, you will need to decide whose name you will make the claim in.
Will Universal Credit be paid weekly?
Universal Credit will be paid monthly in arrears, just like a salary would be paid. Therefore, you will need to start planning how you will pay your rent up to the first payment date, as currently Housing Benefit is paid weekly when the rent is due. You may also have to save a month's rent so that you can make the payment immediately when you change over to Universal Credit.
Welfare Reform - Checklist
You can use the checklist below to prepare for some of the Welfare Reform changes.
- Check whether I have to pay because I am under-occupying my property by using the online tool
- Check whether I will be affected by the Benefit Cap
- Set up a Basic Bank Account in preparation for Universal Credit
- Download or use an online budget planner to help me budget
- Set up Direct Debit to pay my rent now or in the future
Further advice and guidance
If you are a Birmingham City Council tenant, you can get advice on how you are affected by contacting the Rent Service on 0121 675 2006. They can discuss the options available to you, or refer you to a free independent debt advice service.
If you are not a Birmingham City Council tenant, you should contact your landlord directly.
If you're worried that the benefit changes will reduce the money you have coming in, it's a good idea to start thinking ahead. Use the links below to help you plan and get further online advice.
Loan Sharks - Find out how to get help if you have been affected by illegal money lenders (also known as loan sharks).
Benefit Calculator - Get an estimate of what benefits you could get (including Housing Benefit).
Make a Housing Benefit claim online - If you are having problems paying your rent or Council Tax, then you might be able to get help towards paying these bills.
Report a change in circumstances to Benefits - If your circumstances have changed report this online to Benefit Services.
The Money Advice Service - Carry out a free online money health check or use some of the other helpful online tools, such as the money stretcher calculator.
Citizens Advice Bureau - Get free online advice on your rights including benefits, housing, employment, debt and legal matters.
Birmingham City Council Debt Advice Service - The Debt Advice Team takes a realistic and practical approach to helping people who are experiencing severe debt problems.
Department of Work and Pensions - Get information on benefits, pensions and jobs.
Citysave Credit Union - This is a community based financial organisation. It offers accounts such as savings, bill payment and budgeting and loans.