‘Army trained’ Iain Duncan Smith, Secretary of State for Work and Pensions. Image: Steve Punter

Universal Credit is not reaching my area until later this year. So I've no practical knowledge yet, only what I've picked up from reading and calculating. On that basis, however, I've found three obvious health warnings to claimants. People with more experience may well have others to offer. All are welcome.

Unfortunately, many people may find it hard to benefit from the warnings by 'tidying' their lives. UC was created for a better-controlled world than many of us inhabit. That is a difficulty.

These, then, are my three health warnings.

1. Make sure you have the right kind of partner.

This is rather fundamental. The right partner may always be an important feature of life, but never more so than when making benefit claims. There are two obvious reasons.

a. Making a claim: now and under UC

Your partner will be involved in your claim. Just as in the 'legacy' system, couples must usually make joint claims and attend initial interviews at JobCentre Plus.

The legacy system, though, allows reduced payments of JSA/ESA/IS if your partner doesn't attend the interview. Under UC, save in a very few cases you'll be paid nothing by way of means-tested benefits until you and your partner have been to JobCentre Plus and signed Claimant Commitments.

This 'nothing', for once, almost means what it says. It involves much more than under the legacy system.

Universal Credit includes not only the old JSA/ESA/IS income-replacements, but also housing costs for rented and mortgaged homes and the equivalents of the old Child and Working Tax Credits. Of the means-tested benefits only Council Tax Reduction remains (administered by Local Authorities). Child Benefit is sort-of-means-tested, and it too survives (run by HMRC).

Apart from those two, all the eggs are in one basket. If your partner won't cooperate, your claim will not go live.

This may seem reasonable, but it's also problematic. Recently we struggled at our Citizens Advice Bureau to find ways forward for a woman (call her Alice) whose 'self-employed' partner ('Rob') had done no work for a year. They have children aged eighteen months and seven. I'm fictionalising this, but the implications are accurate.

Rob refuses to sign on for JobSeekers Allowance. Alice is working 8-12 hours per week (usually nearer 12) just above the minimum wage. They are getting all the benefits they can, but their Housing Benefit falls well short of their private sector rent. It almost never covers the full amount in our high-rent area. Nor does the Council Tax Reduction cover the full sum, being capped for everyone but pensioners, carers and disabled people.

Alice and Rob have gas and electricity meters so they can't run into debt and risk being cut off, but that also means they're paying over the odds. They need a car to get Alice to work. Buses run, unlike many local villages, but not at times that help shift workers.

Under the legacy system, since she's part-time, Alice can't claim Working Tax Credit but can theoretically sign on for JobSeekers Allowance. Depending on how much she earns each week, she might get a few pounds. But if, as is most likely, her entitlement were reduced because of Rob's non-cooperation, she wouldn't get anything.

Anyway, the gain would be wiped out by petrol for the 21-mile round trip for fortnightly visits to the JobCentre Plus to sign on, as well as the time taken by daily online job-searches plus other meetings at JCPlus and the certainty of payments starting and stopping and muddles emerging. Mercifully, Alice and Rob are on broadband, otherwise they'd have to book a computer at the public library. At least they have a nearby library; that's a further cost for people without broadband who have to travel in from the villages.

What Alice needs, of course, (apart from Rob's rebirth) is more work. But she's on a 'key time' contract giving her a guaranteed eight hours per week plus possible extra hours, on a rota including weekends and weekdays. It's hard to find work that fits around that. And it's hard to take on more anyway. She isn't entitled to help with childcare even if she could find some flexible enough to match the job, and she can't leave the children long with Rob.

So Rob's non-cooperation creates difficulties. (Incidentally, the Office for National Statistics reports that domestic abuse is more than three times likelier in the poorest households than in wealthier ones.) Money is tight. The debts are mounting, and Alice is slipping into the perilous habit of prioritising heating, food, children's shoes and high-interest lenders over rent. The landlord can give them two months' notice any time. As assured shorthold tenants they'll have no defence against eviction. If they're in rent arrears, they'll probably be deemed 'intentionally homeless', so the Local Authority has no obligation to rehouse them. We can help Alice challenge that decision, but the LA won't be readily sympathetic if they haven't been claiming all possible benefits.

It's not a particularly unusual situation. The man is refusing in this case, but that's not always so (though our CAB statistics show that far more women than men come in with benefit problems. Men tend to avoid involvement as far as possible.)

It's tough. Our money adviser hasn't yet been able to help Alice balance her income and expenditure. On average, the overall cost of raising a child has risen by about 63% since 2003, by far the most expensive time being from first birthday to starting school. Costs are higher in London, the South East, Northern Ireland and the East of England, balanced (ideally) by higher wages. Alice's situation is not ideal.

At least she is getting benefit help with her council tax and rent as well as Child Benefit, to eke out her wages. They are in debt but not starving. Under Universal Credit, crisis will come faster. Nothing for rent. Only Child Benefit for the children. Rob will have to accept that claimant commitment. Since the younger child is over one and under five, that means attending not only the initial interview but also satisfying whatever further 'work-focused interview requirement' is laid on him by JobCentre Plus. It's not clear how she'll persuade him.

Our culture is alert to anything smacking of 'something for nothing' when it comes to people in poverty. In those terms, this requirement seems fair enough. A primary purpose of the welfare system is, after all, to reduce welfare dependency.

Unfortunately, in Alice's case the system isn't helping her into work. She'd go there herself fast enough if she only could. It's pushing her and the children through the safety net and out the other side, becoming less benefit-dependent only because there's less benefit to depend on. It will do so faster under UC.

b. Access to benefit income

Another reason to choose your partner with care. Under the old system, benefits can be divided, some being paid to each partner. It arrives at intervals through the month depending on the claim dates and frequency of payment.

It's a crazy system, error-prone, expensive, nightmarish to live with. Now advisers (and those claimants aware of what's impending) dread its departure, for the tidiness of Iain Duncan Smith's new system lands all the money in one bank account, monthly in arrears. People need to be sure that if it's paid to their partner, they can trust her/him to manage it responsibly.

Monthly payments are meant to accustom people to the world of work where such frequency is, allegedly, the norm. Only it isn't the norm for people on hourly rates and paid weekly. Nor for people with several jobs, whose payments are dotted all over the place. And some are paid four-weekly. For many workers struggling near the bottom, monthly payments are alien.

The obvious picture is of a partner spending the rent down the Offie. That's not the only peril, though. Alice finds it hard to avoid spending the rent money even though it is paid separately from Child Benefit and Child Tax Credit. At least she has only a small trickle of money at any time; she can never splash out on two pairs of children's shoes or on paying off the whole payday loan, however tough the pressure on her.

She will be able to under UC.

And another point about these payments. When you first claim, there will be at least a month's wait before the first payment. If you can prove your household particularly vulnerable, you might be lent some money in advance, to be repaid in future months. Otherwise, as you head towards having to claim UC, make sure you squirrel away enough to survive on for the month. It might be difficult.  

2. Make sure you have the right employer.

UC is calculated monthly in arrears using 'real-time information' (RTI) from employers to HMRC. According to the Department for Work & Pension's (DWP's) glowing vision in the FAQs for employers, 'HMRC sends relevant data relating to Universal Credit claimants to DWP on a daily basis (four times a day). So the data employers send to HMRC will be with DWP on the same day or at the latest the next day.' Iain Duncan Smith was army-trained. I'm sure the Forces will perform with this degree of precision. But pubs, clubs and small corner shops? The computer system, already in its second generation though it hasn't been seriously tested on claimants,

In an almost endearing understatement, the UC guidance to employers says: 'It is important that you report your employees’ PAYE information on time; that is on or before the time you pay them, so that we can make the correct Universal Credit payments.' One would like to think they mean 'important' to the claimant. I don't know if late information will mislead the computer into increasing UC as if there were no wages, with a knock-on reduction when two lots of pay appear the next month or, more probably, that the claim will stop. Time will tell. Such a reduction in payment must occasionally happen for four-weekly wage earners, since their payments will not align with monthly ones. Twelve times four is 48 not 52 weeks.

So pick an employer able and willing to provide that real-time information, one with an efficient payroll system. Employers who haven't moved on to RTI can't do it. 'If your employer does not use this RTI system you will need to report your earnings to Universal Credit yourself every time you're paid. If you and/or your partner fail to report your work or earnings your Universal Credit may be suspended and your payment delayed' says the UC website. There is no mention of delays by JCPlus in processing this non-RTI information, but given the record of the old system, everyone confidently expected them. The experience of areas already under UC have justified our belief.

If your employer is on RTI but you can't rely on him/her, I'm not sure what you do. Hope for the best and prepare for the worst. Much better to have the right kind of employer, the kind Iain Duncan Smith has in mind.

3. If you have a mortgage, only take a well-paid job.

This is a tricky suggestion since under UC, as for JobSeekers Allowance, if you refuse a reasonable offer of work you're likely to be sanctioned, losing a chunk of income for 13+ weeks. For the initial 13 weeks you can negotiate to apply only for jobs commensurate with your last rate of pay and seniority, but not thereafter.

The problem is that UC has a 'zero earnings limit' for support for mortgage interest (SMI). If you have a mortgage, as soon as you earn even at the minimum wage for one hour per week, you lose all your SMI (payable after a waiting period of 13 weeks on the claim). I'll explore this further in another article; here I'll just give the health warning.

How far, if at all, this reduces your UC depends on your wage level and household make-up. People with children are protected (a bit). If they don't get help with housing costs (rent or mortgage interest), they are allowed keep more of their wages before their UC payments start being 'tapered' away. If they're on higher incomes, this balances the loss of SMI.

But if you have a very low wage that's little or no help. The only thing that hits you is the loss of SMI. I've played around with various scenarios. A singleton or couple getting help with SMI loses catastrophically if they take a micro-job of a few hours on minimum wage. Especially if they're childless, their earnings have to rise significantly before they exceed what UC without wages had been.

So, if you have a mortgage: either avoid getting a job (magically avoiding a sanction meanwhile), or wave an alternative magic wand and find a well-paid one.

The problem

I've heard Iain Duncan Smith speak. Universal Credit in his words glows with rationality, promising greater fairness for taxpayers and opening prospects for claimants.

If terms and conditions of work were designed to take account of human lives as well as employers' bottom lines, if the realities of daily life allowed people to organise themselves with military precision, if income bore some relationship to outgoings, and if benefit regulations were comprehensible to ordinary minds, his vision might be nearer truth.

As it is, people carry on coping, somehow, because they have no choice.

Universal Credit inhabits fantasy-land. But it's not just UC that needs rewriting, of course, it's the economic system of which it's part.