Universal Credit: Clearing Up The Confusion

Universal Credit Logo

Despite a national employment rate of 74.8% (31.95 million people, the highest rate since 1971!), 4.6% of the country are still looking for work. The remaining 21.5% are the Inactivity Rate – those too old or young to work, in full time education, or those who can’t work on medical grounds or any other valid reason.

Many of those who are unemployed are waiting for the right role for them,from the 767,000 existing vacancies to be filled in the country. The Department of Work and Pensions have a benefit system for those out of employment known as JobSeekers Allowance (JSA), allowing for those without jobs to have a reduced form of income. However, in recent years a new system is rolling out across the country to eventually replace JSA. This is known as UC, or Universal Credit.

The difference between Jobseekers Allowance and Universal Credit is a little more complex than meets the eye. Many reading this blog may not even be aware of what Universal Credit is! Only introduced in 2013 and still expanding its coverage now, UC is a relatively new form of social security. Even in ideal circumstances, the rollout of Universal Credit won’t reach completion until a predicted date of 2021.

What is Universal Credit anyway?

For those out of the loop, Universal Credit replaces several means-tested (income, capability or circumstance-based) forms of income for both the employed and unemployed. This means your UC includes JSA, Housing Benefit, Child Tax Credits and more.

A key idea behind Universal Credit is that you don’t risk losing all your JSA should you start working. Instead, UC reduces the income it supplies based on the money you earn from working. For every £1 you earn through work-based income, the UC you receive reduces by 63p. This means that lower-wage earners still receive a remainder of Universal Credit on top wages earned.

How Universal Credit changes to your work

Universal Credit is reduced once enough income is made from work alone. In effect you are making more money than you were on Universal Credit alone at this point. This approach logs your weekly hours, and have your UC fit around you moving back into the working world.

This means if you’re looking for work you have nothing to fear about losing your JSA over three days work. Simply log your hours on UC, and your benefit will adjust to fit around the hours you work. No confusion, no fuss, no problem!

Applying for Universal Credit

Interested in checking your eligibility for UC? Speak to your work coach at your local JobCentre Plus to learn more. Remember, the end goal is UC as the standard form of benefit – it may be in your area yet.

Don’t know how much Universal Credit you may have access to? EntitledTo have a benefits calculator to help find out how much Universal Credit you would be paid: http://www.entitledto.co.uk/help/Calculating-Universal-Credit

If you’re looking for work and would like to see opportunities you may not find on your own, why not check out the rest of 1st Stop Recruitment’s site or submit your CV to us? We’d love to help you get back into work!

Universal Credit - How it Works

Looking to recruit?