Universal Credit can be applied for by those who are on a low income or are out of work and who hit other eligibility criteria. Once a claim is put through, initial payments can take around five weeks to arrive.
This schedule came under fire recently as the Work and Pensions committee reviewed the payment system.
In October 2020, the committee produced a report on Universal Credit payments and within this they made the following recommendation: ” We recommend that DWP should eliminate the five week wait for all claimants moving to UC through managed migration, including for claimants moving from tax credits.
“Those claimants should continue to receive their existing benefits during their first monthly assessment period.
“They should then be offered the option, from day one of their UC claim, of choosing fortnightly payments of their award. This would ensure a smooth and seamless move from legacy benefits to UC for people whose circumstances have not changed.
“We recommend that DWP set out, in response to our report, a detailed analysis of how our recommended approach could work in practice.
“It should also assess how the costs of this approach would compare with the costs of its existing plans to pay run-ons and final payments of legacy benefits to claimants who move via managed migration.”
Yesterday, the DWP released their response and they remained adamant that in reality, no claimant will have to wait five weeks for payment if they can’t afford it: “No one has to wait five weeks to receive money through UC and advances are available from day one of a claim for those who need it, with many claimants receiving funds within 72 hours.
“Claimants in receipt of Tax Credits that are moved to UC will be able to claim an Advance of up to 100 percent of their indicative award.”
Universal Credit UK: surplus earnings rules explained [INSIGHT]
Universal Credit claims rise over 90% as guidance is issued on debt [WARNING]
Martin Lewis breaks down Universal Credit rules [EXPERT]
The DWP went on to address other benefits in their response: “As of 22nd July 2020, a two-week run-on of Income Support, income-related Employment and Support Allowance and income-based Jobseeker’s Allowance is paid to eligible claimants to provide additional support to move to UC.
“This is in addition to the already established transition to UC housing payment where eligible claimants receive a two-week extension of Housing Benefit.
“The Department is not considering continuing paying Tax Credits with UC, as there is suitable provision in place to support claimants until they receive their first UC payment.
“All Working Tax Credits claimants are, by definition, in work, and will have other income to help support them through the transition.
“This is not necessarily the case for those moving onto UC from ESA or JSA, many of whom are not employed or only working part time.
“It is worth emphasising that significant proportion of Tax Credit claimants are already paid four-weekly. In-work Child Tax Credit claimants will equally have other income to support them, and those claimants who are not working will benefit from receiving a run-on of the legacy benefits they may be claiming.
“They will also have access to support through other benefits they receive (e.g. Child Benefit).”
Advances can be applied for if a person is in financial hardship while they’re waiting for their first payment.”
This advance will need to be paid back to the Government and the repayments are usually made from future Universal Credit payments.
This means future payments will be reduced until the debt is repaid and some have warned this creates a financial problem for claimants.
Deductions will begin immediately and claimants will have 12 months to pay back the advance.
Claimants can ask to have the repayments delayed for up to three months if they can’t afford them but this is only allowed in exceptional circumstances.