The government’s ambition of simplifying the current benefits system, and putting all work related benefits under a single umbrella was introduced as a pilot scheme last year. Universal credit will affect 8 million people.

Overhauling the benefits system

Anyone who is in receipt of Housing Benefit, Working Tax Credits, Income based Jobseekers Allowance, Child Tax Credit, and Income related Employment and Support Allowance (ESA), will have these benefits replaced by Universal Credit. This will be paid monthly and will be paid per household rather than a single claimant. Find out more by going online to the Money Advice Service. Under existing Department of Work and Pensions (DWP) regulations, if you are a couple and one of you is jobless and claiming benefits, and your partner is employed on a low wage, you are already assessed as a single unit. If the working partner claims working tax credits, the other household benefits are taken into account.

Couples without children may lose out

The DWP published a graph that shows that those couples without children may find their joint monthly income is reduced. The BBC has assessed that those couples with children will find themselves better off on a monthly basis, as will lone parents and single people without children.

An important change to the benefits system is that you will no longer have to make a regular trip to the Job Centre. All of the calculations and applications will be carried out online. Couples will also have to decide whether to have Universal Credit paid into a joint account, or nominate which partner should receive the benefits in their account. Many couples don’t have joint accounts, or one partner has a poor credit score whereas the other doesn’t. A joint account means that your credit risk will be evaluated jointly.

Claimant Commitment

In order to sign up to the Universal Credit you must sign what is known as a ‘claimant commitment’, this will show that you are willing to work at short notice. The influential online forum Mums Net claims that this contract is unfair, especially as you will have to state that you are willing to work in a volunteer capacity for six months if there is no paid work available. If you refuse to sign one of these contracts you will be penalised and you may have your benefit withdrawn.

Childcare payments

If you have children, the childcare element of the Universal credit will pay 70% of your costs, but both of you will have to be in work in order to receive this benefit. If you have one child you will receive £760 towards your childcare costs and £1,300 if you have two children. You will have to register any changes to the family income online and you will find that your credit will vary as a result of changing family circumstances.

Online systems can’t deal with the changes

The Universal Credit online system is already delayed. There have been widespread reports of computer glitches across the pilot areas. In preparation for the introduction of this scheme, it might be a good idea if you both get used to recording your earnings and benefits income on paper as a back up. To date, the House of Commons Public Accounts Committee has written off £425 million as a result of poor administration and IT blunders.