Today, the government will begin its phased roll out of the universal credit benefits scheme, with the hope of bringing down taxpayer costs.
Unlike the current system, which gives recipients their benefits as separate amounts, universal credit combines the six main types of benefit into one package.
It was first introduced by work and pensions secretary Iain Duncan Smith in April 2013, but was delayed because of IT failures. Around 50,000 people in the north of England have claimed the new benefit so far, which is fewer than initial plans laid out.
But from today, the government hopes to start catching up with plans, and according to work and pensions secretary Iain Duncan Smith, this will be possible using much less Budget money than was originally estimated.
"Compared with the expenditure of something in the order of £2.4bn that was originally expected, we're now spending £1.8bn - and included in all of that we'll actually spend £600m less on this development than originally planned," he told the BBC, explaining that he had sought expert advice on the matter.
With a staggered roll out, he hopes to introduce universal credit to a further 150 job centres in the UK over the course of this year, so that by 2016 one in three job centres will offer it.
How does it work?
The six working-age benefits combined into universal credit are as follows: income-based jobseeker’s allowance, income-related employment and support allowance, income support, working tax credit, child tax credit and housing benefit.
It will be made available to all single people of working age under the scheme, and once enrolled a person will receive it as a direct monthly payment into their bank account.
The structure of the package makes it possible for recipients to take a part-time job, since the benefit will be gradually tapered away rather than being dependent upon complete unemployment.
As part of a pilot scheme, it is already available in 100 job centres concentrated in the north-west of England. The purpose of this next stage is to spread it across the nation.
Why is it being introduced?
Universal credit was first outlined by Duncan Smith at the Conservative Party annual conference in 2010, as a way of increasing employment and reducing benefit expenditure.
Once fully rolled out, ministers estimate it could boost the economy by seven billion pounds each year.
The results have been positive so far – a government analysis released over the weekend indicated that in places where the scheme has already been introduced, claimants were 13 per cent more likely to have found work within four months than groups claiming normal job seeker's allowance.