Basic Amount

There will probably be an "applicable amount", based on the claimant's circumstances.  To this will be added an amount for housing costs (rent, eligible services charges and mortgage interest). This will give a grand total which will be the maximum Universal Credit. It will then be tapered away by any other income that the claimant (and his/her partner) has.

Taper

The taper will be about 65%. Higher than Iain Duncan Smith is rumoured to have wanted, but still lower than the total of all the tapers that a claimant faces in our current fragmented benefits system.

Disregards

For working claimants, there will generally be higher earnings disregards than under the current arrangements: "...some groups will be allowed to earn significantly more before their benefit starts to be withdrawn..." says the White Paper. For workers, the net income (i.e. after tax and national insurance has been deducted) will be used in the calculation of Universal Credit.

A transitional protection scheme?

The White Paper says that people will not be worse-off under the Universal Credit than under the current system. If they are, an "additional amount will be paid" it says. This raises the prospect of a transitional protection scheme running alongside or within the Universal Credit.

Generally, claimants who are not working will receive the same amount on Universal Credit as they did on JSA (etc). But working claimants will be substantially better off under Universal Credit, says the White Paper. The phrase "making work pay" appears in the paper often.

This pledge to make working claimants better off under the Universal Credit is not as generous as it may sound. This is because by the time Universal Credit begins in October 2013, we will have already had 18 months of Housing Benefit and Working Tax Credit Cuts, so Universal Credit will start off from a conveniently low comparison point.

Couples and children

For couples, both partners will claim the Universal Credit (i.e. it will be a joint claim). Where the parents of a child are not a couple, only one of the parents will be able to receive the child element of Universal Credit.

Maximum award

The principle of a maximum award of benefit (as announced in the Spending Review on 20th October 2010) will be brought forward into the Universal Credit. This is likely to be about £500 per week for couples and about £350 per week for single people. There will be exceptions to this rule.

Conditionality

"Conditionality" in this context means entitlement to the Universal Credit being dependent on the claimant taking all reasonable steps to find work, and, if they are in low-paid work, to attempt to increase their pay. "Conditionality" is a word you will hear a lot in conjunction with Universal Credit. It is central to Iain Duncan Smith's thinking behind welfare reform. In the current system, conditionality is focussed on the unemployed. Once you are working 16 (or 30 hours for single people), there is currently no conditionality. A family could tick-over on 16 hours per week, receiving full tax credits, Housing Benefit and Council Tax Benefit, without any pressure on them to increase their hours. So under Universal Credit, there is likely to be conditionality for workers too. The wording of the White Paper suggests that the conditionality for workers may be aimed at an income level, rather than at the number of hours worked.

People who fail to comply with the requirements of conditionality will face a tougher regime of sanctions (ie. punishments in the form of cuts in their benefit) than at present. For more detail on conditionality, please click here.

Payment

The Universal Credit may be paid monthly, says the White Paper.