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Wednesday, 3 October 2012

Universal Credit to replace current benefit structure

  • Published: Wednesday, 6 October 2010

In an effort to simplify the benefit system and improve work incentives, Universal Credit is set to replace the present benefit structure. A new law will need to be passed first, after which changes would take effect from 2013. A new Enterprise Allowance will also be created to assist unemployed people starting to work for themselves.

Update 17 February 2011

The Welfare Reform Bill was published on 17 February. Use the link below to read more about the Bill.

Universal Credit: what it will mean to citizens

Our online service can help you find out what benefits you can claim

Universal Credit 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:

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

Migration expected to start in 2013

People claiming benefits will be automatically moved on to Universal Credit from 2013. The reforms will be set out in more detail in a White Paper in autumn 2010 and put before Parliament in a Welfare Reform Bill in 2011.

In the meantime, Directgov's Benefits adviser tool can help you calculate what benefits you are entitled to. To access the tool, follow the link below.

Enterprise Allowance

The government will also introduce a new Enterprise Allowance for people who are out of work and entering self-employment. People who take up the allowance will receive a weekly payment linked to the value of their benefit for a period of up to six months.

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