Universal Credit

Universal Credit

Last year saw the introduction of Universal Credit, which is the largest overhaul to the benefits system since the 1940s and which could affect up to 8 million people.  The concept behind the new system is to “make work pay” so that people are not trapped on benefits because they would lose money if they got a job.  The system will combine six working-age benefits into the one new Universal Credit, so it is expected to be easier to run as well as reducing the incidence of fraud and error.  As with most new systems that involve HMRC, we’ll wait to see if what is expected actually happens!

Universal credit will be paid monthly, and claimants will be expected to manage and budge their own payments, for example to landlords if they are in receipt of rent benefit.  This is supposed to make the payment received feel more like wages, thus preparing the claimant for the way things would work if they were employed.

In order to claim Universal Credit you have to apply online, and all data thereafter is also kept online.  This is where your part in the process may kick in, as it interacts with RTI (Real Time Information) and your obligations if you’re an employer.  You must ensure your RTI returns are complete, accurate and submitted on time because the data will be used in Universal Credit claims.  You may not be claiming yourself but you may have staff, and for them it’s vitally important that HMRC have the correct information.

Universal Credit is being slowly introduced between 2013 and 2017, so there’s plenty of time to see how the system will work in practice, and to see what interesting things go awry along the way!


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