Universal Credit and changes to in-work incentives
Three job entry payments are to be phased out in readiness for the introduction of Universal Credit which aims to improve work incentives and smooth the transitions into and out of work ensuring that people get ongoing support.
Job Grant – payments will end from 1 April 2013.
- Job Grant is a one-off payment of £100 or £250 made to eligible claimants who have been on benefits for at least 26 weeks.
In Work Credit and Return to Work Credit – there will be no new payments made from 1 October 2013. Payments in progress at 1 October 2013 will continue until completion or a change of circumstances that brings the payment to an end.
- In Work Credit is currently paid to eligible lone parents who leave benefits to start work. Claimants must have been on benefits for at least one year and can receive payments for up to 52 weeks.
- Return to Work Credit is paid to eligible claimants with a health condition or disability who leave benefits to start work. Claimants must have been on benefits for at least 13 weeks and can receive payments for up to 52 weeks.
|New claimants no longer build up eligibility||No new payments (IWC/RTWCs in payment continue)|
|Job Grant||Mon 1 October 2012||Mon 1 April 2013|
|Return to Work Credit||Tues 2 July 2013||Tues 1 October 2013|
|In-work Credit||Tues 2 October 2012||Tues 1 October 2013|
Universal Credit will improve work incentives as financial support will be reduced at a steady rate, taking actual earnings into account at the time they are received. If a claimant is working part time, they may continue to receive some payment. If their hours then increase, their Universal Credit payment will reduce, but they will keep more of their earnings and will always be financially better off in work.
The intention is that any work pays, in particular, low-hours work. Reducing the complexity of the current system and removing the distinction between in-work and out-of-work support, will make clear the potential gains to work and reduce the risks associated with moves into employment.