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Universal Credit: How will it affect employers?

17 September 2013

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Guidance released by the government claims that the introduction of Universal Credit could give employers a more ‘flexible workplace’.

The new system, which gives a single monthly payment to people who are on a low income or out of work, aims to ensure that people will be better off in work than on benefits. 

The government states that there could be opportunities for flexible working using part time staff to meet peaks and troughs in business without recruiting and training new staff. 

Universal Credit is being rolled out gradually, starting in areas of Greater Manchester and Cheshire in October 2013. 

The new system will replace the Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Working Tax Credits, Child Tax Credits and Housing Benefit. 

By 2017 it will be paid to everyone who has a right to receive it. 

A statement from the Department for Work and Pensions (DWP) states: “If you have already started to report your PAYE information to HMRC in real time, this will automatically provide DWP with the information to adjust the amount of Universal Credit payment an employed claimant receives. It also shows DWP how much income tax and National Insurance has been paid to HMRC via a PAYE scheme. 

“It is important that you report your employees’ PAYE information on time; on or before the time you pay them so that we can make the correct Universal Credit payments on time too. Claimants will have to contact DWP for any queries they have about their Universal Credit payment.”