How Universal Credit works in Scotland
December 27, 2017
The introduction of Universal Credit was intended to simplify the benefits system and reduce the opportunity for fraud, but it has received much criticism, partly due to an inherent lack of flexibility.
The Scottish government is now able to use new social security powers, however, when administering Universal Credit. These devolved powers were brought in by the Scotland Act, 2016, and the new system applies to payments made on or after 4th October 2017 in ‘full service’ areas of Scotland.
A full service area is a local authority area that uses an online claiming system for Universal Credit, as opposed to the ‘live service’ in Scotland which involves administering a claim by phone. It’s intended that, eventually, all areas will become full service areas.
So how is Universal Credit paid in parts of Scotland that aren’t ‘full service’ areas, and what changes have been made under the new legislation?
Single monthly Universal Credit payments
The single monthly payment made directly to claimants’ bank accounts, means that careful budgeting is needed to ensure rent payments and other household bills are made without default.
Since Universal Credit has been rolled out, an increase in the volume of rent arrears has been reported, and although Alternative Payment Arrangements (APAs) are available, they’re said to be administration-heavy, with calls being made for the system to be changed.
Changes under the new Universal Credit system
Two changes have been brought in under the new Universal Credit system – if you live in a full service area, you can :
- Receive payments twice monthly, instead of a single payment
- Choose to have the ‘housing element’ within your UC payment made directly to your landlord
If you meet the current criteria, these choices are made available once you’ve received the first payment via the online system. You can choose to make one change, both changes, or none at all under the new process, giving you more flexibility and control over your finances.
Choosing to change your Universal Credit payment
Initially, there’s a time limit of 60 days in which to choose one or more of the changes. The offer to change disappears from your online account after 60 days, but you can still make a request to change your payment options at a later date if you wish.
This new flexibility also means you can change your mind in the future, should your circumstances change. There are benefits to yourself as a tenant and also to your landlord by having your rent paid directly, rather than into your bank account. Although you’ll still need to budget for household bills, it ensures this high priority rent payment is made without delay.
Scotland Debt Solutions has been helping Scottish residents to escape debt since 1989. We can provide more information about the Universal Credit system in Scotland, and how it affects your claim. Call one of the team for a free consultation – we operate from four offices around Scotland.
If your credit score has been affected by problem debt, you may be looking for ways to start rebuilding it and getting on with your financial future. Whether you are still struggling with your debt or have entered into an official debt management or insolvency procedure such as a Debt Arrangement Scheme (DAS), Trust Deed […]
If you’re worried that the council might take action against you for non-payment of council tax, entering into a Scottish trust deed can be a beneficial step. It stops legal action by all creditors included in the arrangement, and provides a ‘safe haven’ from which to regain control of your finances. As council tax arrears […]
A debt payment programme (DPP) remains on your credit file for six years, along with other default markers and court judgments that have been made against you. This can seriously affect your ability to borrow for this period of time, and longer. Even if you can secure borrowing, lenders are only likely to offer unfavourable […]
If you owe a debt of £5,000 or less, your creditor may send you a Simple Procedure Notice of Claim. This is a relatively new procedure that was brought in by the Scottish government and commenced on 28th November 2016 – their intention being to make it easier to resolve debt disputes. So if you’ve […]
A Bankruptcy Restriction Order may be made against you if it’s believed that you acted dishonestly, recklessly or unlawfully before you were made bankrupt, or during your bankruptcy. Your Trustee will inform the Accountant in Bankruptcy (AiB), and if their suspicions are upheld, a BRO of 2-15 years can be made depending on the seriousness […]
Debt payment programmes (DPPs) are an intrinsic part of the Debt Arrangement Scheme, which allows you to pay off unsecured debt at an affordable rate. If a debt payment programme is rejected by one or more creditors, the DAS Administrator can apply their discretion on whether to approve the plan, after using a test to […]
Tel: 0800 063 9250
Why Choose Us?
- Speak direct with a qualified adviser
- We do not operate call centres
- 4 Offices in Scotland - National Coverage
- Home visits also available
- Fully regulated advisers and Reputable Firm
- Helping Scots Get Out of Debt Since 1989