Pilot schemes for the government’s new Universal Credit have already been launched in the north of the UK and the whole scheme is set to replace the current benefit system by 2017. Universal Credit will affect anyone in the UK who is unemployed or on a low wage.
Key changes for couples
Many couples may already receive their existing benefits in their joint accounts. The Department of Work and Pensions (DWP) rules state that if you live together as a couple, you are classified as such and therefore your benefits will be paid at a couple’s rate. Universal Credit will continue this process. Many families find it easier to budget if the household income is paid into a single account. It’s easier to keep track of bills and other expenses in this way. The Money Advice Service recommends that your new Universal Credit is paid into a joint account as your child benefits and housing benefit will form part of this new payment system. Your landlord will receive the rent from you; it will no longer be paid directly to the property owner.
Why a use a joint account
Money can be one of the biggest causes of argument within a relationship. Some couples don’t trust each other, or they wish to retain their privacy about their expenditure. As Universal Credit will replace working tax credits, housing benefit, child tax credit, job seekers allowance, employment support allowance and income related support, you may find it easier to manage major joint expenditure from one account and then have individual accounts for personal use. The BBC website has a useful feature on how these new changes might affect you and your family. It is expected that 8 million people will be in receipt of Universal Credit.
Credit scores affect joint accounts
If one or other of you has a poor credit rating this will affect your status as a joint account holder. You should therefore carry out a credit score for both of you before electing to open a joint account. According to the TransUnion dispute process, some couples, where one partner has a poor credit rating, find it easier to keep their money separate. If you feel that you may need an overdraft or another form of credit in the future and you don’t want your clean record to be affected by your partner’s poor rating, retain individual accounts.
Universal Credit will be paid monthly
If you are already in receipt of work related benefits you receive your money on a fortnightly basis. The DWP believes that paying the new Universal Credit monthly will help claimants deal with budgeting should they find a job. In order to deal with some of these changes, you can go online and work out how much money you will be entitled to. The blog Entitled To has some advice about how you will make your online claim and the types of information you must have to hand, when applying for Universal Credit. Once approved, you can expect to receive your first payment within one month and seven days.
