Blog: Universal Credit

Question: – What is Universal Credit?

 Universal Credit is a new benefit that replaces most existing benefits and tax credits for people of working age – wrapping up all these kinds of payments into one benefit.

The benefits being replaced include:

  • Working Tax Credit
  • Child Tax Credit
  • Housing Benefit
  • Income Support
  • Income-based Jobseeker’s Allowance (JSA)
  • Income-related Employment and Support Allowance (ESA)

The Universal Credit will be ‘means-tested’ which means that anyone who applies will have their income and savings assessed, and if they, or a partner, earn over a certain amount or have a certain amount of savings they will be unable to get the Universal Credit.

There will be a basic rate called the ‘standard allowance’ and extra amounts for people in different circumstances – for example, if they have children, a disability or need help with housing costs.

 

Question: – I already receive one of these benefits what will happen to me?

Between 2017 and 2021 all existing claimants are being moved to Universal Credit.

 

The program for switching existing claimants to Universal Credit is as follows;-

Date Council Job Centre
May 2018 Newark and Sherwood District Council Newark JCP
September 2018 Mansfield District Council Mansfield JCP
October 2018 Nottingham City Council Bulwell JCP

Nottingham Loxley House JCP

Nottingham Central JCP

Rushcliffe Borough Council Nottingham Central JCP
November 2018 Ashfield District Council Ashfield JCP
Broxtowe Borough Council Beeston JCP
Gedling Borough Council Arnold JCP

 

Question:- I am about to be moved to Universal Credit, what does it mean for me?

  • You will receive one single monthly payment, paid into your bank account.
  • If you get help with your rent, the rent money you get will be included in your monthly payment – and you must then put it aside to pay the landlord/council/housing association
  • If you live with your partner and you’re both eligible for Universal Credit, you’ll get one monthly payment between you.

 

Question: – What do I need to do?

1/  If you are due to be moved to Universal Credit you will receive a letter from the DWP – it is vital you make sure you understand the content of this letter and are clear on how much you will receive each month and when

2/ As you will receive one payment per month, you need to quickly understand what this mean for your monthly budget.  The overall amount you receive should not change but you do need to ensure you have enough money to meet your financial responsibilities as they fall due.  If you are going to be late paying your loan, gas bill or similar, it is important you speak to your lender/utility company etc. before the payment is due and do not leave them to chase you for repayment.  They will be more able to help if you speak to them before missing a payment.

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The Wonga Story

Everything you need to know now that Wonga has gone into administration:-

 

Q: I have a loan with Wonga, do I need to repay?

YES – it is important that if you have a Wonga loan you continue to make repayments in line with your agreement.

Even though Wonga has entered administration, your loan with them remains subject to the terms you agreed – failure to make payments could result in Wonga’s administrators taking action to recover the money you have borrowed.

 

Q: I had a loan with Wonga and have made a claim for compensation, will I receive any money?

We don’t know as yet.  The administrators have said they will review the claims in due course.  However, even if your claim is accepted, there may not be enough money to make a payment to you.

 

Q: I had a loan with Wonga or a loan with another Payday lender, am I entitled to compensation?

Some people have successfully raised complaints against Wonga and other Payday lenders and have received compensation/refunds.

You may be entitled to compensation if you can show that the lender did not treat you fairly when agreeing to lend you money, for example;-

  • the lender did not tell you that a payday loan should not be used for long term borrowing or if you are in financial difficulty.

Also, if you’ve had problems repaying the loan, you can complain if your payday lender did not deal with you sympathetically, for example;-

  • did not offer to freeze interest and charges
  • pressurised you to extend the loan & did not explain how much this would cost

More information is available here:-

https://www.citizensadvice.org.uk/debt-and-money/borrowing-money/types-of-borrowing/loans/payday-loans/payday-loans-reasons-to-complain-about-your-lender/

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