Universal Credit — the new welfare reform

Posted on By Corinne Pritchard

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

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.
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I believe design and designers can and should make the world a better place. I love designing things that help people understand complex ideas.