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Benefits system about to get tougher

22 March 2013

Universal Credit, to be launched by the Government in October 2013, will replace many of the benefits Equity members currently rely on, such as Income-based Jobseekers Allowance, Income-related Employment and Support Allowance and Housing Benefit. Council Tax Benefit will be abolished and replaced by local Council Tax Reduction schemes. The implications for Equity members of this new system, which is the brainchild of Welfare Secretary Ian Duncan Smith (left), are hard to assess but it is clear that the benefits system is about to get much tougher.

At its March meeting the Equity Council received a detailed report from Equity’s Tax and Welfare Rights Organiser Max Beckmann. She told the Council that under Universal Credit paper-based claims are being abolished and as a result most new claims must be made on-line. Claimants will be given on-line claimant accounts which they will be required to keep up-to-date with changes in their circumstances. Universal Credit awards will be assessed on a monthly basis and self-employed claimants will need to log on-line details of their earnings every month.

The details of the Universal Credit regime are still sketchy and there are many unknowns about how it will impact on Equity members. Equity staff have been meeting with senior officials from the Department for Work and Pensions (DWP) to try and get the best possible outcome for Equity members, but the new benefits landscape is going to be very challenging.

Most self-employed members who do not pay Class 1 national insurance contributions will be assumed to have a minimum income from their self-employment. This will be known as a Minimum Income Floor and it will be used to calculate their Universal Credit entitlement even if actual income is below that which is assumed. For most self-employed Equity members the Minimum Income Floor will be set at approximately £11,000 annual earnings.

A new system of tough sanctions is being introduced. Claimants will have to accept a ‘claimant commitment’ which will set out the steps they are required to take to look for work, more work or better paid work. The restrictions members will be able to place on their work search activities and work availability under Universal Credit will be fewer and at the discretion of Personal Advisors.

Equity will continue to advocate for the rights of Equity members and are seeking to input into the published DWP guidance issued to Personal Advisors. Equity will be publishing detailed information for members on Universal Credit as further information becomes available and touring the UK to inform members of the worrying changes that are on their way.

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