Sep 162012
 

Will Universal Credit merge all
working age benefits…
In to a ‘single’ streamlined payment?

With thanks to the brilliant Nick fighting for justice and raising issues we should know about: see more at http://mylegal.proboards.com/index.cgi

“Universal Credit will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment.” – say DWP

Well let’s just check the DWP’s claim out…..

Take the case of John. He’s 59 and he’s in receipt of Employment & Support Allowance (Support Group] because he has very severe limitations and cannot work, he also receives some Disability Living Allowance. Having paid all his National Insurance contributions he is entitled to the contribution based variant of his Employment & Support Allowance. He lives in his own rented property.

Under the current system John has to claim four separate benefits:

 

  • Employment & Support Allowance (contribution based)
  • Housing Benefit (for his rent)
  • Disability Living Allowance for his severe mobility & personal care needs
  • Council Tax Benefit

So will John’s life be made any easier once he’s been reassessed under the welfare reforms?

Will Universal Credit simplify things for John?

Will John’s four benefits all be merged into one?

Here’s how John’s claim will be affected by welfare reform …. 

 

  • John will carry on claiming his Employment & Support Allowance – because it’s contribution based it won’t be included with his Universal Credit claim.
  • John’s Housing Benefit will be replaced by Universal Credit, but it will no longer be paid by his local Council.
  • John’s Disability Living Allowance may well end up being replaced by Personal Independence Payment but it won’t be included with his Universal Credit claim.
  • John’s Council Tax Benefit will be replaced by a localised benefit for Council Tax but it won’t be included with his Universal Credit claim.

John will still be claiming four separate benefits despite his ‘Universal’ Credit – hardly simplification is it?

Government is spending billions of pounds in a blaze of publicity aimed at convincing us all that the new Universal Credit will integrate working age benefits into one ‘single streamlined payment’. It’s a claim which falls flat on its face when you start to look at the detail.

It’s only Income Based Employment & Support Allowance which will be included in a Universal Credit claim, the contributory based variant John claims stays outside of the system because it is not a means tested benefit. It’s only John’s Housing Benefit which becomes part of his Universal Credit claim. Under the current system John’s Housing & Council Tax Benefit are both paid by the Local Authority but from next April it all changes as Council’s commence the administration of their own ‘localised’ version of Council Tax Benefit. John’s rent payments will be paid directly to him rather than get paid directly to his landlord under the new scheme and what’s more they will be paid from a completely different source to his Council Tax Benefit.

John’s Disability Living Allowance will eventually be transferred (subject to assessment) to the new Personal Independence Payment (PIP) which has never been integrated into the plans for merging of payments in with Universal Credit.

So John’s Employment & Support Allowance stays exactly as it is, his Housing Benefit becomes his Universal Credit, his Council Tax merely becomes localised and his new Personal Independence Payments stays outside of the system.

Now will someone tell me, or rather to the point the DWP: how is this ‘simplification’ of the system?

We will take a look at some more comparisons in due course, although this one seems to say it all I think; what do you reckon?

 


Now let’s look at another typical claimant situation involving a family…..

Take the case of Ben and Barbara and their 3 children: aged 9,11 and 14. Barbara is the carer for their 11 year old son who is disabled. Bob goes to work and the family receive Working & Child Tax Credits, they don’t qualify for any help with their mortgage and nor do they get any help with Council Tax.

Under the current system Ben and Barbara have to claim four separate benefits:

 

  • They receive Tax Credits: Working & Child Tax Credits from the HMRC
  • Carer’s Allowance for Barbara who looks after the family’s son.
  • Disability Living Allowance for their son
  • Child Benefit for all 3 children

So will Ben and Barbara’s life be made any easier once they’ve been reassessed under the welfare reforms?

Will Universal Credit simplify things for this family?

Will Ben and Barbara’s four main benefits all be merged into one?

Here’s how Ben and Barbara’s claim will be affected by welfare reform …. 

 

  • Universal Credit replaces their Tax Credit claim (Working Tax Credit & Child Tax Credit)
  • Child Benefit is not included in the Universal Credit
  • Carer’s Allowance is not included in the Universal Credit
  • Disability Living Allowance is not included in the Universal Credit

Ben and Barbara will still have to claim four separate benefits despite their ‘Universal’ Credit – it’s not really simplification is it?

So again we see another example of how this unification doesn’t really merge payments at all. Some may of course argue that their Working Tax Credits and Child Tax Credits are two separate benefits but existing claimants will be aware that both are paid in the existing system by the HMRC; essentially the claim process and award notices for both the working and child related credits are already unified. In this case the two different credits are reclassified as ‘Universal Credit’. The other benefits which Ben and Barbara claim all fall outside of the new Universal Credit because they are non-means tested. How can we claim this to be simplification?

It’s another example which shows how Universal Credit isn’t the ‘single streamlined payment’ claimed by the DWP.


So perhaps it will be easier to claim Universal Credits in the event of Ben losing his job…..

In the previous post we looked at how Ben and Barbara would be affected by Universal Credit if they were in work. Now let’s look at the same family and how they will benefit (or not as the case may be) in the unfortunate event that Bob lost his job.

Under the Universal Credit system with Ben working, the family would still be claiming four separate benefits:
 

 

  • Universal Credit replaces their Tax Credit claim (Working Tax Credit & Child Tax Credit)
  • Child Benefit is not included in their Universal Credit
  • Carer’s Allowance is not included in their Universal Credit
  • Disability Living Allowance is not included in their Universal Credit

So will Ben and Barbara’s life be made any easier with Universal Credit as they move from being in work to unemployed?

Will Universal Credit make it easier to transition from employment to unemployment?

Will Ben and Barbara’s four main benefits become all merged into one?

Here’s how Ben and Barbara’s claim is affected as Ben becomes unemployed….

  • Ben will be entitled to claim contributory based Jobseeker’s Allowance – which is not part of Universal Credit (but see below)
  • The Disability Living Allowance claimed for their son is not part of Universal Credit
  • The Carer’s Allowance claimed for looking after their son is not part of Universal Credit. (but see below)
  • The Child Benefit is not part of Universal Credit.
  • Because Ben and Barbara are now on a low income – they can claim some Council Tax benefit, but it will not be part of their Universal Credit.
  • Their existing Universal Credit claim is altered to take account of how Ben is no longer working but the Children still need to be claimed for. (but see below)

Potentially Ben and Barbara may be seen as still having to claim 5 separate benefits!

This scenario flags up a number of problems, take it from me these are the kind of problems which you always get when merging contributory based benefits with those which are income based. Anyone in this situation will also be affected by the Universal Credit regulations, they are in draft form but are now at an advanced stage and can therefore be relied upon to get an idea where the problems may be. The potential problems in Ben and Barbara’s claim will revolve around the following:

  • Their Carer’s Allowance
  • Their mortgage costs
  • The correct handling of their claim
  • Ben’s contributory based Jobseeker’s Allowance.

The reason these are all problematic is because because Ben and Barbara’s income has fallen so low that they now fall subject to ‘means testing’ of their non – means tested benefits. Bob’s Contribution based Jobseeker’s Allowance and the Carer’s Allowance are both treated as income in a Universal Credit claim. The problem is how many claim handler’s or advisers will recognise this or for that matter how can we be sure it will be picked up by the IT system when a claimant does their claim on-line. Remember claimants will only put in what they consider to be relevant.

This is always a classic point of failure in the benefits system and Universal Credit has merely moved it in to the arena for error. Having been told Carer’s Allowance and Contributory based Jobseeker’s Allowance are not part of Universal Credit, how many claimants are going to think ” I don’t have to put that in then”. It’s no good saying there will be comprehensive instruction or advice on tap – the reality is people don’t understand or always read the instructions and advice is something the government has made it clear they do not want to fund. The scope for error is immense, in fact it’s just waiting to happen.

In practice Universal Credit is composed of elements which offset the income which you have to declare. So for the Carer’s Allowance there is a ‘carer’s element’ and for Ben and Barbara’s mortgage interest costs there is a ‘mortgage element’. It’s more or less exactly the same as it is in existing income based claims. The Universal Credit will make an allowance for both Ben and Barbara by regarding them as a couple. But remember Bob’s Jobseeker’s Allowance isn’t actually part of the Universal Credit claim but it is very much taken in to account as their income for Universal Credit purposes.

Confused?

Yes I expect you are, it’s no different to the confusion which exists already – its just been extended to a newly named benefit. The confusion doesn’t end here because the mortgage interest costs (only the interest is paid) fall to be included as part of Ben and Barbara’s Universal Credit but only after a ‘qualifying period. It’s the point at which all of these elements & allowances apply which marks the point at which the contribution based benefits fall to be assessed as income.

In an ideal world Ben and Barbara’s Universal Credit should include their Carer’s Allowance, housing costs and Bob’s Contribution based Jobseeker’s Allowance but the problem arises in working out when they fall to be assessed and in recognising the alignment of all the different elements and the dates from when they ‘kick in’.

Many of us will remember the chaos caused with the implementation of the tax credits system, it resulted in an epidemic of overpayments. The scope for overpayments is far greater with Universal Credit because it’s being carried out on such a huge scale. What makes it all the more alarming is that if you make a mistake you risk a new £50 fine, the fine could be the least of your worries because there is also a pronounced determination to prosecute those who are deemed to be ‘cheating’ the system. We have all seen examples of a hostile media and a renewed DWP stance to get tough in a desire to name and shame anyone who falls foul.

Overpayments under the new system will not be subject to the same rights of dispute which currently exist so many claimants simply won’t be able to properly contest an unfair decision. When government is asked about the problems all of this creates they stick to script and tell us all how ‘work pays’. The emphasis on work is backed up by an assurance that simplifying the benefits system makes it more possible to transition from welfare to work; the new highway for making the transition is Universal Credit which we are all told is ‘on track’.

Let’s just wait and see whether the government’s new super – highway from welfare to work is all they say it will be. They can make all the claims they like but the one which promotes Universal Credit as a ‘single streamlined payment’ is to say the least a gross distortion of the facts.

To those of you who don’t understand a word of this: welcome to Universal Credit, you’ll need to put all your faith in the DWP and the Ministers who tells us it’s on track. I can see the newspaper headlines which will highlight all this chaos, it won’t be too long before the printing presses start rolling!

And they say there’s no need for benefit specialists, honestly what planet are they on?

It’s yet another example which shows how the DWP’s claim that Universal Credit is a ‘single streamlined payment’ is nothing short of a lie.

Read more: http://mylegal.proboards.com/index.cgi?board=frontline&action=display&thread=758#ixzz26fxEa5g7

 

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  3 Responses to “Universal Credit – how is this simplification?”

  1. Can I claim that this is all aload of bollocks on Universal Credit?
    And another thing, by Universal Credit does it mean you can get it anywhere around the globe?

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