Martin Lewis has claimed people on 'legacy benefits' could be missing out on more money.
Speaking on his Martin Lewis Money Show on ITV tonight, he said more than three million people on benefits, such as tax credits, income support, housing benefit, income-based jobseekers allowance, income-related employment and support allowance could be entitled to more money.
He said that all will eventually be moved onto the universal credit system – the one stop shop benefit that is replacing them – but that could take years, and changes to the system mean some will receive more if they switch now.
READ MORE: Martin Lewis admits 'sleepless night' as he issues energy price warning
The money master produced a guide with four steps to help benefit claimants decide whether or not they would be better off switching to universal credit.
Are you likely to be better off on universal credit than other benefits?
Universal Credit will eventually be replacing the six ' legacy benefits ' but people can opt to move over sooner than they are made to - and could be better off for it.
Because it's a bit different from the benefits it's replacing, some people can end up much better off on universal credit than with their current combination of benefits
However, if you make the change without doing research first then you could be worse off.
Martin said that what you get on universal credit is based on earnings, savings, housing, and household circumstances, so two people the same age and earning similar amounts could get vastly different amounts.
Who is likely to be better off on Universal Credit?
- Most people who work and rent
-
Some people who have 'higher earnings' but don't rent
Who is likely to be worse off on Universal Credit?
- Lone parents who work but don't pay rent
-
Those with a disability, in work, but not paying rent
-
Self-employed workers earning less than £1,200 a month
-
Those with savings over £16,000
Use a free calculator to check
A free benefits calculator, provided by Money Saving Expert's website, will give you an indication of how much universal credit you're likely to get, plus will give details of other benefits you might qualify for.
Importantly, it'll also tell you whether you're likely to receive more or less money if you switch over from your current benefits to universal credit.
In just less than 10 minutes you could know the amount that you could be due.
Important things to know about Universal Credit
Once you move over to universal credit you can’t move back.
Even if you end up receiving less money you still can't switch back to your old benefits.
Beware 'deductions' - universal credit payments can be reduced if you’ve certain debt.
Up to 25% of your standard payment (the basic amount of universal credit you’re entitled to) can be automatically deducted to pay off certain debts, such as council tax, energy bills, rent, and child maintenance.
Universal credit is usually paid directly to you as one lump sum each month – so you’ll need to budget.
In England and Wales, universal credit is paid once a month directly into your nominated bank account. It’s then your responsibility to manage your finances. This may feel daunting if you’re moving from smaller, more frequent benefits payments to one big one that you have to make last for the entire month.
Universal credit requires many to do 35 hours a week of 'job-related' activities – that's five hours more than on working tax credits.
Claiming universal credit comes with a requirement to do certain tasks, as set out in your 'claimant commitment'. Legacy benefits also have conditions, but they're often less demanding than on universal credit.
You won't get your first payment for about five weeks.
If you can't wait that long, you may be able to get an interest-free loan, called an advance. This is paid back through automatic deductions to your universal credit payment over 24 months. If you think you'll need an advance, check the increase you'll get from switching covers the difference.
If you work and have more than one payday a month, you’ll get different amounts of universal credit each month.
Because there are different numbers of days in each month, if you’re paid four-weekly, fortnightly, or weekly, there’ll be some months you get paid more than usual, meaning your universal credit payment will be lower than normal. This can make it even harder to budget and manage your money, so bear this in mind before applying.
How to switch to Universal Credit?
Moving onto universal credit is usually just a case of submitting a new claim on the gov.uk website. If you live with your partner, you'll need to do it together.
You have to make your claim in one online session (you can't save and come back to it), so have all the information you'll need to hand before starting.
Once you've entered all the information, you'll be shown an estimate of how much universal credit you'll get each month, and you'll have to declare all the information you've provided is correct. At this point, you’ve submitted your claim, and you won’t can't change your mind.
If your claim's successful, you’ll have an interview with a work coach at your local Jobcentre.
The Martin Lewis Money Show: Live airs tonight at 8.30pm on ITV and ITV Hub
Receive newsletters with the biggest and breaking TV and showbiz news by signing up here
