Universal Credit and Housing Benefit


Universal Credit is a new single payment for people who are looking for work or on a low income.

Universal Credit will help claimants and their families to become more independent and will simplify the benefits system by bringing together a range of working-age benefits into a single streamlined payment. The new Universal Credit system aims to:

  • improve work incentives
  • smooth the transitions into and out of work, supporting a dynamic labour market
  • simplify the system, making it easier for people to understand, and easier and cheaper for staff to administer
  • reduce in-work poverty
  • cut back on fraud and error.

It will be launched in 2013 and will replace:

  • income-based Jobseeker’s Allowance
  • income-based Employment and Support Allowance
  • Income Support
  • Child Tax Credits
  • Working Tax Credits
  • Housing Benefit.

Universal credit will see housing benefit paid directly to tenants instead of landlords as part the government’s radical overhaul of the welfare programme.

The change is designed to simplify the housing benefit system and give tenants additional responsibility over their finances.  However the proposal has caused concern among housing providers who fear that chasing payments from individual tenants, rather than receiving them automatically from the state, will lead to an increase in arrears.

The Department for Work and Pensions has worked with a number of housing associations and local authorities to test direct payment to tenants, with a year-long pilot scheme beginning this summer.

There are also concerns about how to provide residents with the financial advice that will enable them to manage their new financial responsibility to safeguard their rent payments and other important expenses, as well as tackling digital exclusion among social tenants so that access to the government’s new online system is available to all.

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