Landlords Association for
Northern Ireland
Universal Credit
15 May 2013
Universal Credit
Introduction
Welfare Reform Bill - to date
• The Welfare Reform Act in GB received Royal
Assent on 08.03.12.
• The NI Welfare Reform Bill was introduced to
the Assembly on 01.10.12.
• An Ad-Hoc committee set up to look at Welfare
Reform Bill and
conformity with
equality issues
Welfare Reform Bill - to date
• The Social Development Committee
resumed its scrutiny of the Welfare
Reform Bill on 30 January, completed its
scrutiny and reported on 19 February
• Consideration Stage was scheduled for
14 April but has been delayed by Minister
Universal Credit: The Vision
1. Making work pay
2. Supporting progression in work
3. Simplification
4. Reduce fraud and error
5. Improve levels of benefit uptake
6. Protecting the most vulnerable
What’s in / What’s out for Universal Credit
IN
OUT
 Income related ESA
X
DLA / PIP
 Income based JSA
X
Contributory Benefits
 Income Support
X
Child Benefit
 Child Tax Credits
X
Carers Allowance
 Working Tax Credits
X
SF Crisis Loans & CCGs
 Housing Benefit
X
Housing Benefit (Rates)
 SF (Budgeting loan
elements)
• Child Benefit, Carer’s Allowance (will remain)
• Contributory JSA and ESA will remain
• Help with rates will be the responsibility of DFP initially administered by NIHE?
Digital First
• Claimants must submit an electronic claim or
make a claim by telephone
• The effective date of claim is the date the claim
is submitted on the condition that the claimant
commitment is signed
• Some claimants will need to attend an interview
to sign the claimant commitment so the claim
cannot be accepted until this happens
• There will be no provision in the
regulations for Clerical Claim Form
Eligibility for
Universal Credit
Universal Credit - key conditions
•
•
•
•
•
•
•
Lower Age Limit
Upper Age Limit
Not Receiving Education
Residency
Claimant Commitment
Have a National Insurance Number
Jointly have capital of less than £16,000
Claiming and Paying
Universal Credit
Key Stages in the Universal Credit assessment process
STAGE 0 – IDENTIFY THE BENEFIT UNIT
then
STAGE 1 – CALCULATE THE UC MAXIMUM AMOUNT
then
STAGE 2 – CALCULATE THE ADJUSTED UC AWARD
then
STAGE 3 – CALCULATE UC ENTITLEMENT
then
STAGE 4 – CALCULATE THE UC PAYMENT
Carer Childcare Children
Adults
Stage 1 - Benefit Unit - ‘Maximum Amount’
Standard Allowance
(4 set rates dependent on 1 or 2 adults and
< > 25 years old) plus, where appropriate…
Child Element/Disabled Child Additions
Higher set rate for 1st child, lower set rate for 2nd+
extra set amount if (a)disabled (b)severely disabled
Childcare Element
70% of costs up to a cap
Carer Element
Set rate
LCW
Lim. Capability for WRA Element (support group): higher rate or
Housing
Lim. Capability for Work Element : lower rate
Housing Element (include relevant NDs)
(Rent): Size criteria, age, lower of rent/LHA
(Owner): SMI subject to a cap
The sum
total of all
the relevant
elements =
The UC
Maximum
Amount
Stage 2a - Adjusted Award
UC MAXIMUM AMOUNT
minus
Applicable capital
minus
Applicable income
minus
Any earnings (via Rti )/earnings equivalents taking
account of work allowance & 65% taper where appropriate
......
And then
Reduce the
Maximum
Amount to take
account of Tariff
Income, Other
Income &
Earnings to give
the Adjusted
Award
Stage 2b – Adjusted Award
ADJUSTED AWARD (2A)
minus
Any reductions necessary to take account
of the Benefit Cap
plus
Any increase necessary (where Cap does not
apply) to take account of Transitional Protection
equals
UC ADJUSTED AWARD
....further
revise the
Maximum
Amount
take a/c of
the other 2
key
adjusting
criteria =
The UC
Adjusted
Award
Stage 3 –Universal Credit Entitlement
UC ADJUSTED AWARD
minus
Any conditionality sanctions
plus
hardship payment (if awarded)
equals
UC ENTITLEMENT (subject to a
de minimis amount)
Wherever
appropriate
reduce the
Benefit Unit’s
UC Adjusted
Award further
to take
account of
sanctions
The UC
Entitlement
NB In most cases
the UC adjusted
amount will = UC
entitlement
Stage 4 – Actual Universal Credit Payment
UC ENTITLEMENT
minus
Recovery of
O/payment, UC
Advances/Budgeting
Advances or
Hardship Loans
Child Maintenance
Payments
Fraud Sanctions
Third Party Deductions
equals
The actual UC Payment
(paid monthly or more often)
To work out
the actual
UC
Payment
Amount the
necessary
deductions
are taken
from the
Benefit
Unit’s UC
Entitlement
Calculating the Universal
Credit Maximum Amount
Elements of Universal Credit
•
•
•
•
•
•
Standard Allowance
Child Element/Disabled Child Element
Childcare Element
Limited Capability for Work Elements
Carer Element
Housing Element (Rent and Mortgages)
Standard Allowance
There will be 4 values of Standard Allowance:
Type of claimant
Amount per assessment period
(Monthly)
Single claimant aged under 25
£246.81
Single claimant aged 25 or over
£311.55
Joint claimants both aged under 25
£387.42
Joint claimants where either is
aged 25 or over
£489.06
Housing Element
• The Housing Element will provide an amount to meet
the cost of either rent or mortgage interest
• The Housing Element may be less than the amount
due to the landlord (under occupancy, non
dependants, Local Housing Allowance)
• Support for mortgage interest (SMI) with the current
waiting period (13wks) and capital limit of (£200,000)
to remain unchanged to 31/03/2015
• The zero earnings rule will apply to SMI under UC
• If they stop work 13 week waiting period need to
served again
Housing Element
• In GB the Housing Element (Rent) will be paid directly to
the claimant
• In NI Minister has decided direct payment of the Housing
Element (Rent) to landlords is the default position
• Mortgage payments will continue to be paid to lender
• Work is ongoing to decide how to calculate the amount
that will be paid to the landlord
• Non dependants- Flat rate of £65.00 per month applied.
Under the current system it varies according to their
income.
• If a claimant is in prison (< 6 months) they will be entitled
to the Housing Element only to ensure they don’t lose
their home.
Benefit Cap
• The Benefit Cap will be introduced on a date to be agreed
• Pre-Universal Credit - the cap will be applied to new and
existing customers through Housing Benefit payments
• The cap will apply to the combined total of “welfare
benefits” to which members of a benefit unit are entitled to
either jointly or individually. There is no right of appeal.
• The cap will not affect any payments of Universal Credit
made to help a benefit unit pay for childcare
• Household that are considered to be “in-work” will be
exempt from the cap.
Examples of a Universal
Credit Assessment
Universal Credit Assessment
Example A: lone parent over 25 years
2 children, 1 boy 5 years & a girl aged 16yrs
Not working
Living in a 4 bedroom property in Belfast
(Private Rented Sector )
Rent: £540 per month (Local Housing
Allowance Rate Applies)
Capital: Nil (entitlement is reduced if
capital is over £6,000)
Housing Element
As a private rented tenant the amount of
the Housing Element is restricted to the
Local Housing Allowance Rate of £104.63
per week for a 3 bedroom property in
Belfast. £104.63 x 52 ÷ 12 = £453.40).The
shortfall of £86.60 is due to be paid to the
landlord.
Monthly Assessment
Standard Allowance
£311.55
Child Element
£498.75
Housing Element
£453.40
Maximum UC
£1263.70
Less Tariff Income
£0.00
Less earnings after
work allowance &
taper applied
£0.00
Adjusted UC payable
Rent paid direct to
landlord
Actual UC payable to
claimant
* Example shows full housing element paid to landlord. This may not
apply if UC award is reduced due to other income.
£1263.70
£453.40*
£810.30
Universal Credit Assessment
Example B: single person under 35 yrs
Working - Net earnings: £273.00 per month.
Work Allowance £1,330 PA (£111.00 per
month). No children
Living in a 1 bedroom rented property in
Belfast
Rent: £300 per month (shared room rate will
apply)
Capital: less than £6,000 (Entitlement is
reduced if capital is over £6,000)
Earnings Calculation
Housing Element
In this case the customer is under 35 years and entitled
to the shared room rate only (a single room in a shared
property). He is entitled to the Local Housing Allowance
Rate which will vary depending on the Broad Rental
Market Area (BRMA). In Belfast this is currently £42.15
per week.(£42.15 x 52 ÷12 = £182.65 this is the amount
allowed per month). The shortfall i.e.£117.35 is due to
be paid to the landlord by the claimant.
Less earnings after
work allowance & taper
applied
£105.30
£273.00 less £111.00 work allowance
= £162.00
£162.00 x 65% = £105.30
Monthly Assessment
Standard Allowance
£311.55
Housing Element
£182.65
Maximum UC
£494.20
Adjusted UC Payable
£388.90
Rent paid direct to
landlord
£182.65*
Actual UC Payable to
claimant
£206.25
* Example shows full housing element paid to landlord. This may not
apply if UC award is reduced due to other income.
Universal Credit Assessment
Example C
Lone Parent over 25 years old (Widowed) - child.
Receiving Widowed Parent Allowance £108.30 per
week and pension £400.00 per month from late
husband’s employers.
Living in Private Rented 2 bedroom property in
Belfast £380.00 per month
Monthly Assessment
Standard Allowance
£311.55
Child Element
£272.08
Housing Element
£380.00
Maximum UC
£963.63
Less Tariff Income
£69.60
Tariff Income is £4.35 per month for each £250.00, or
part of £250.00 over £6,000.00
£10,000 - £6,000.00 = £4,000.00. £4,000 ÷ 250 = 16.
16 x £4.35 = £69.60
Less Widowed Mothers
Allowance
Less Occupational
Pension
£400.00
Housing Element
As a private rented tenant the Housing Element
Is restricted to the Local Housing Allowance rate of
£93.27 per week for a 2 bedroom property in Belfast.
£93.27 x 52 ÷12 = £404.17.
The housing element will meet the full rent .As the
claimant has other income only £24.73 is available to
be paid to the landlord.
Less earnings after
work allowance &
taper applied
£0.00
£469.30
Adjusted UC payable
£24.73
Rent paid direct to
landlord
£24.73*
Actual UC payable to
claimant
* Example shows full housing element paid to landlord. This may not
apply if UC award is reduced due to other income.
£0.00
Universal Credit
Other Considerations
Change of Circumstances
• Whole month approach will be applied to
Universal Credit this will result in winners and
losers
• If a baby is born mid assessment period the
claimant will receive the child element for the
whole month
• If a claimant has housing costs and they reduce
mid month the lower housing cost will be paid
for the whole month
Northern Ireland Differences
• Default position is payment of housing element
to landlord
• Split payments between two parties in the
household subject to certain eligibility criteria
• Payment of Universal Credit twice a month
• The criteria for the flexibilities has still to be
decided
ANY QUESTIONS