Universal Credit – the new welfare reform

There’s always a lot of talk about the welfare state and how it makes people not want to work – benefit scroungers, fraud, stories of people swindling the system out of huge amounts of cash, sitting at home eating cheeseburgers which honest hardworking folk like you and I have paid for fill the newspapers, everyday.

But the truth is that these people are the exception, not the rule. Most people just get on with it, surviving as best they can until they get a job that means they can do more than just survive.

There’s already been a lot said about the plans in this Welfare Reform paper – the idea that people will have to do menial jobs for nothing to ‘get used’ to working again has sparked controversy, especially. But that doesn’t tell you what the new scheme, Universal Credit, actually means if you’re unemployed. Is it better? Is it worse? It could even be exactly the same.

You already know how much you’re getting now, and how much you’d have to earn for stopping taking benefits to be a proper advantage.

Before you take a look: 

  • You should also know that ESA, DLA, contributory JSA and Child Benefit aren’t part of the new system – they’ll be separate. How much you get from them will reduce your basic Universal Credit benefit though.
  • Universal credit takes away some benefits like housing benefit – the idea is to give you a basic amount that covers housing too.
  • It’s also important to understand that this is based on this year’s figures. In 2013 when universal credit comes in, things could be very different.
  • And a last word of warning: I’m bad at maths. I’ve tried my best but may still be quite, quite wrong! 
What am I looking at here?
I just did a little bit of analysis on what the current benefit rates are for certain people (single, couple, disabled, with children, that sort of thing) – the government has promised to match whatever you get now under the new system – then working out with the new ‘taper rate’ – that is, the amount of money you lose in earnings if you’re still claiming benefit but have a job, and then calculating how much you’d have earn, or how much you’d have to work at minimum wage for it to be worth you not being on benefits.
They’re calling it ‘Universal Credit’, but it’s not very universal – it doesn’t include Job Seeker’s Allowance (JSA) when you’ve got enough national insurance to cover some of it (I think that’s called contributory JSA), Employment and Support Allowance (ESA) or Disability Living Allowance (DLA) or child benefit. All of these will still be separate (though they will also be changing soon), but whether they change or not they will get counted as part of your income – so you’ll get less ‘Universal Credit’ if you get enough money from other benefits.
What it does cover is JSA, Housing Benefit, and Working Tax Credit with the occasional Council Tax Credit thrown in – but that will probably depend on your council. So the difference is that it covers you from not when you don’t have work right through to when you do.

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Corinne Pritchard

Corinne Pritchard

Information Designer at Simply Understand
I believe design and designers can and should make the world a better place. I love designing things that help people understand complex ideas.
Corinne Pritchard

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