The government’s flagship Universal Credit scheme is to be opened up to some families for the first time, the DWP has announced.
Universal Credit, which merges six existing benefits and tax credits into one single monthly payment, will be rolled out to families and lone parents in parts of the North-West of England.
The changes will initially only apply to new claims, but the DWP say 1 in 3 Job Centres will be offering the new benefit by next spring.
Work and Pensions Secretary Iain Duncan Smith previously said around 1,000,000 households would be claiming Universal Credit by the end of 2014.
However, figures published earlier this month reveal that less than 18,000 households were in receipt of Universal Credit as of October 2014.
Described as a “welfare revolution” by Mr Duncan Smith, Universal Credit will support up to 70% of childcare costs, allowing claimants “more flexibility to work and earn more money”. This will be increased to 85% by 2016, following a £400 million government investment in childcare.
Work and Pensions Secretary *Iain Duncan Smith MP said the government had inherited a welfare system which was “trapping the very people it was meant to help “.
He added: “Universal Credit is bringing welfare into the 21st century by restoring fairness to the system and making work pay in a modern labour market.
“We’ve already seen remarkable successes, with Universal Credit claimants moving into work faster and staying in work longer.
“As part of our long-term economic plan, today sees the next stage of this welfare revolution bringing families on-board with extra childcare support and flexibility for employers. By spring next year 1 in 3 Jobcentres will be offering the new benefit.”
Working families on Universal Credit will be able to claim back 70% of the money they’ve paid out for childcare, with a monthly limit for 1 child of £532 and £912 for 2 or more children.
The last new claims to ‘legacy benefits’ will be accepted during 2017, say the DWP. Existing claimants of benefits and tax credits merged into the benefit will then be gradually ‘migrated’ to Universal Credit. The process is expected to be completed by 2019.
Universal Credit merges income-based jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit into one single payment. Council Tax support is not included but will be administered by local councils.
*Please Note: Opinions expressed in this article are those of the Work and Pensions Secretary alone and are not necessarily shared by Welfare Weekly.