How will Universal Credit affect my child and working tax credits?
UNIVERSAL Credit is gradually replacing child and working tax credits - wrapping benefits into one monthly payment.
The government has pledged to move everyone receiving these benefits onto the new system by 2024, though the schedule has been delayed several times.
If you’re already getting tax credits, you will not need to do anything unless your circumstances change, in which case you need to let the Department for Work and Pensions know.
At that point, you may be moved to the new Universal Credit system, which means the amount of money you get is likely to change.
The government is also shifting 10,000 people to Universal Credit to trial the changeover process.
If this is you, the DWP will be in touch to let you know your benefits are moving over.
Will I be moved onto Universal Credit automatically?
Universal Credit is gradually replacing these benefits:
- Working Tax Credit,
- Child Tax Credit,
- income-based Jobseeker’s Allowance,
- Income Support,
- income-related Employment and Support Allowance,
- Housing Benefit.
Only a small number of people are currently being moved from tax credits to Universal Credit as part of a pilot scheme running until July 2020.
It is expected that the majority of other tax credit claimants will be moved to Universal Credit between November 2020 and December 2024.
But the government has delayed the process several times already, so these dates are not yet set in store.
If you are required to move to Universal Credit, the Department of Work and Pensions (DWP) will contact you.
You will be asked to submit a Universal Credit claim by a certain date, and if you don’t submit a new claim in time you will lose your tax credits.
Can I still claim for tax credits?
As of December 2018, most people can no longer make a new claim for tax credits.
If you already claim one form of tax credit, though, you can still apply for other credits as this does not count as a new claim.
For instance if you were claiming Working Tax Credit already, you could also claim for Child Tax Credits.
You cannot claim tax credits at the same time as Universal Credit, so your old benefits will stop when you make a claim under the new system.
The only exception is if you are getting Housing Benefit, which will be paid for an extra two weeks after you make your Universal Credit claim so you don’t fall behind on rent.
People claiming tax credits will continue you to receive them unless their circumstances change, or they are notified that they must move by the DWP.
What to do if you have problems claiming Universal Credit
IF you're experiencing trouble applying for your Universal Credit, or the payments just don't cover costs, here are your options:
Apply for an advance - Claimants are able to get some cash within five days rather than waiting weeks for their first payment. But it's a loan which means the repayments will be automatically deducted from your future Universal Credit payout.
Alternative Payment Arrangements- If you're falling behind on rent, you or your landlord may be able to apply for an APA which will get your payment sent directly to your landlord. You might also be able to change your payments to get them more frequently, or you can split the payments if you're part of a couple.
Budgeting Advance - You may be able to get help from the government to help with emergency household costs of up to £348 if you're single, £464 if you're part of a couple or £812 if you have children. These are only in cases like your cooker breaking down or for help getting a job. You'll have to repay the advance through your regular Universal Credit payments. You'll still have to repay the loan, even if you stop claiming for Universal Credit.
Cut your Council Tax - You might be able to get a discount on your Council Tax or be entitled to Discretionary Housing Payments if your payments aren't enough to cover your rent.
Foodbanks - If you're really hard up and struggling to buy food and toiletries, you can find your local foodbank who will provide you with help for free. You can find your nearest one on the
How will Universal Credit affect my Child Tax Credit?
If you experience a significant change in circumstances - such as starting work, moving in with a partner, or having another child - you will be asked to move from tax credits to Universal Credit.
If your children were born before 6 April 2017 you can claim for them until they turn 19 if they are in full time approved education or training, but not at university.
But, if your one or more of your children is born on or after 6 April 2017, you will only be able to claim for the first two unless you had a multiple birth or have adopted.
Under the Universal Credit system, you will receive monthly payments that will include both a child element and a childcare cost element.
The child element is intended to help with the cost of raising children, while the childcare cost element lets you claim back up to 85 per cent of your monthly registered childcare costs up to a cap.
There is also a separate element to support the care of disabled children.
Depending on the age of your children, there are certain things you must do when claiming Universal Credit to continue receiving your benefits.
For example, if your child is under one years old, you won’t be expected to work.
But, if your child is aged between one and 12, you will be expected to look for part-time work.
If your child is over 13 you'll be expected to look for full-time work.
The amount you receive could go up or down when you switch to Universal Credit, depending on your new circumstances.
You can use an online calculator to work out what you will get.
How will Universal Credit affect my Working Tax Credit?
You will usually be asked to switch to Universal Credit from Working Tax Credit if your circumstances change significantly.
For example, if you start start working less than 16 hours a week, were on Working Tax Credit and become sick, have a child, or start renting a property.
Universal Credit payments adjust each month based on your earnings, so if your earnings drop one month you will receive more benefits to make up the shortfall.
But if you work extra hours, get a bonus or a pay rise your benefit payments will stop.
There’s also no limits to the amount of hours you have to work as there are with Working Tax Credit.
For the DWP to track your income, either you or your employer need to declare your earnings each month.
To continue claiming Universal Credit, you will be expected to be working the equivalent of 35 hours a week at minimum wage.
If you earnings are below that amount, you will be expected to prove you are looking for better work.
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