Written question asked by Baroness Sherlock (Labour), in the House of Lords. It was answered by Lord Freud (Conservative) on Wednesday, 15 December 2010.

Universal Credit System

Question: To ask Her Majesty’s Government, in costing the universal credit, what assumptions they have made about the numbers of individuals or households who will be ineligible for universal credit as a result of the application of the savings threshold.

Answer: Under the current system, households with over £16,000 of savings would be ineligible for some income-related benefits, including income support, income-based jobseeker’s allowance, income-related employment and support allowance, housing benefit and council tax benefit. The universal credit will replace the above benefits, along with child tax credit and working tax credit for working-age households, and the £16,000 savings threshold would extend to all households eligible for universal credit. We have committed to providing protection to ensure that no households in receipt of the relevant benefits and tax credits at the point of transition will lose in cash terms as a direct result of the introduction of universal credit. New cases or those whose circumstances change will be subject to the £16,000 threshold.

Secondary information