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Understanding Universal Credit

Universal Credit is already being trialled in some parts of the country, and will be gradually rolled out to the whole of the UK from October 2013 to be completed by 2017. Its introduction marks one of the most radical changes to the benefits system since the 1940s. But what will the changes mean for employers?

Universal Credit replaces six existing benefits, and can be claimed by eligible people whether they're in work, out of work or on a low income. One of its primary aims is to simplify the benefits system and to ensure that claimants are better off being in work than on benefits. It's also hoped it will become easier for people on benefits to take on a new job or work more hours.

The Department of Work and Pensions (DWP) says that Universal Credit will open up a wider pool of applicants to employers, making it easier for them to fill a vacancy. It says the new 'Claimant Commitment', which sets out the conditions by which a claimant receives the benefit according to individual circumstances, will come with mentoring and coaching to help people reach their potential. As a result, it expects employers to 'see more suitably skilled applicants to recruit from'.

Universal Credit requires employers to use the new PAYE Real Time Information (RTI), which has already started for most employers, but should be fully up and running by October 2013. Through it, employers keep the tax authority informed when each payment is made, rather than at the end of the tax year, so that the amount of Universal Credit due to a claimant can be calculated.

As earnings go up and down - for example, for an agency worker with unpredictable hours - the benefit paid will be altered automatically. The DWP says that employers will be left with less paperwork because end-of-year return forms won't be required.

Acas provides advice and guidance on many aspects of Pay, such as explaining to employees how pay is calculated and what information is needed in itemised pay statements. Acas has also published the Advisory booklet - Personnel data and record keeping, and runs practical training courses, including Human resources management for beginners, and about Recruitment.

Visit the Acas Training and Business Solutions page for more information.

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