Changes to Universal Credit

The government has announced some important changes regarding Universal Credit. In yesterday’s statement, the Secretary of State for Work and Pensions, Esther McVey, announced the following intended changes.

  • timetable for managed migration – this has been extended by 1 year. It is now due to run from July 2019 – March 2023.
  • transitional protection and the severe disability premium – some good news!

‘In order to support the transition for those individuals who live alone with substantial care needs and receive the Severe Disability Premium, we are changing the system so that these claimants will not be moved to Universal Credit until they qualify for transitional protection. In addition, we will provide both an on-going payment to claimants who have already lost this Premium as a consequence of moving to Universal Credit and an additional payment to cover the period since they moved.

Second, we will increase the incentives for parents to take short-term or temporary work and increase their earnings by ensuring that the award of, or increase in, support for childcare costs will not erode transitional protection.

Third, we propose to re-award claimants’ transitional protection that has ceased owing to short-term increases in earnings within an assessment period, if they make a new claim to UC within three months of when they received the additional payment.

Finally, individuals with capital in excess of £16,000 are not eligible for Universal Credit. However, for Tax Credit claimants in this situation, we will now disregard any capital in excess of £16,000 for 12 months from the point at which they are moved to Universal Credit. Normal benefit rules apply after this time in order to strike the right balance between keeping incentives for saving and asking people to support themselves.’

The above changes will be brought in by new regulations in the Autumn (Universal Credit Managed Migration and Transitional Protection Regulations). We should get more detail then.

Phil Runciman

Welfare Benefits Advisor