MORE than half a million people claiming tax credits will start shifting to Universal Credit this month.
It means more people will be relying on vital Universal Credit payments to help make ends meet.
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Yet, small mistakes could mean this lifeline is cut or even withdrawn completely.
It comes as the Department of Work and Pensions has been gradually phasing out “legacy benefits” such as income support and housing benefit.
Claimants are moving over to the Universal Credit payment system.
In the coming weeks, over 500,000 letters will go out to those claiming working tax and child tax credits with instructions on how to make the switch.
Experts have warned that you must act if you get a letter or risk losing your benefit payments altogether.
Although you can apply to move to Universal Credit before you get a letter, it could mean your payments go down.
Hanging on until your letter from DWP arrives before you apply for Universal Credit means you will be eligible to claim “transitional protection”.
This tops up your Universal Credit so you continue to receive the same amount each month.
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By the end of next year, government has said almost all people claiming benefits will have been transitioned to Universal Credit.
The benefits being phased out are:
- Child Tax Credit,
- Housing Benefit,
- Income Support,
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Working Tax Credit
There are several online benefits calculators which can help you work out what you are entitled to.
Charities Turn2Us and EntitledTo offer free tools and advice.
Most people moving from legacy benefits to Universal Credit are set to be better off.
However, that is only the case if you don’t inadvertently trigger a reduction in payments or stop them altogether.
Anna Stevenson, benefits expert at charity Turn2Us and part of the Sun’s Squeeze Team explains how to make sure you don’t lose out.
Not checking your account
When you apply for Universal Credit you will set up an account which will give an overview of payments and can be used to report a change in circumstances.
You may also receive notifications that could tell you, for example, to attend an appointment with a work coach.
Anna warned if you don’t pick up these notifications, you could see your payouts impacted because you’re likely to miss a request that needs to be taken care of.
She said: “You need to make sure you check your online journal at least twice a week.
“You might be asked to upload evidence, confirm information, or attend a meeting. If you don’t, your money could get stopped.”
Failing to report changes in circumstances
Payments depend on your individual living arrangements so when there is a change it’s important to log it.
Anna said: “When something changes in your life it’s important to tell Universal Credit.
“Some big changes people forget to report include their rent going up, their children over 16 stopping college, and getting awarded a disability benefit.
“Failing to report a change means your benefits won’t be right. If you’re paid too much, you’ll have to pay it back.
“If you’re paid too little, you might miss out on help you’re entitled to.”
Not applying for jobs
Many people receive Universal Credit while out of work, but the government may want proof that you are trying to get back into employment if you are able to do so.
This could mean you need to look and apply for jobs.
Anna said: “Failure to attend jobcentre appointments, or to apply for jobs or do other work-related activity can result in sanctions.
“This is when your benefits get cut for a period.
“More and more people are being asked to do work related activity, even if they haven’t had to in the past.
“This is why it is important to make sure you know what your commitments are and stick to them.”
The benefit grace period has finished
Some people who claim Universal Credit are given a nine-month benefit cap grace period.
The cap limits the amount of Universal Credit you could receive and so after this grace period ends there could be a drop in payments.
It’s a good idea to plan for the end of grace period or look for other ways of lifting the cap, such as moving into work or claiming a disability benefits, according to Anna.
You are paid weekly or fortnightly
Universal Credit is assessed and paid monthly to claimants.
Therefore, those receiving salaries weekly or fortnightly may see fluctuations in payments.
This typically happens where there are five weeks in a month, which can make it seem that your income has gone up that month.
It’s a good idea to plan ahead for these months of reduced Universal Credit so you aren’t left with a shock drop in payments.
You have debt deductions
Some people in debt, including from Universal Credit advances, budgeting advances, rent or council tax arrears, or gas, electricity or water debts are given less Universal Credit because of repayment deductions.
Anna said not a lot of people are aware of this, so it can come as a shock.
But you can also get these deductions reduced if you call up the Universal Credit helpline on 0800 328 5644.
You can also leave a message on your online journal.
Or if your debt is related to budgeting loans, hardship payments, overpayments of benefits and tax credits you can call the Department for Work and Pensions (DWP) on 0800 916 0647.
What is Universal Credit?
Universal Credit is a welfare scheme that gives a single monthly payment for claimants.
You can work and still receive Universal Credit but you must make sure you notify the government of any changes via your account.
The amount you receive depends on your individual circumstances and you may get additional payments if you have children or a health condition.
In line with the new tax year, millions of people are set to see a boost to how much they will receive so that payments stay up to speed with inflation.
And there are Universal Credit payment calculators to help you work out how much you will receive.
