Universal Credit: Primary Legislation
The main primary legislation relating to Universal Credit is the Welfare Reform Act 2012. This section of the site gives more detail about the provisions contained in the Act. We also highlight other primary legislation that is relevant to Universal Credit.
Legislation
Scope of the Act
Commencement of the Act
Transition from tax credits
Other primary legislation
The Welfare Reform and Work Act 2016
Coronavirus Act 2020
The Welfare Reform Act 2012 was debated during the various Parliamentary stages of the Bill. You can find details of these debates and relevant documents in our resources section. You can find consolidated versions of the Act in our Tax Credits: Statutes - Consolidated section.
Note that the Act (under Section 149) only applies to England, Wales and Scotland with the exception of a small number of sections which also apply to Northern Ireland. The sections that apply to Northern Ireland are Sections 32,33,76,92,126(1) to 126(13), 127(1) to 127(9) and Part 7 (except Schedule 14). You can track the progress of the Welfare Reform Bill in Northern Ireland in our Northern Ireland section. You can find out more about devolution of welfare powers to Scotland in our Scotland section.
Sections 128 and 129 (information sharing powers between the Secretary of State and Director of Public Prosecutions) only apply to England and Wales.
As well as introducing Universal Credit, the Welfare Reform Act 2012 also makes amendments to jobseeker’s allowance, employment and support allowance, income support, tax credits, industrial injuries benefit, housing benefit and the social fund. It also provides for the abolition of council tax benefit from April 2013 (to be replaced by local council tax schemes) and sets out the framework for the introduction of the personal independence payment (PIP) to replace disability living allowance for people of working age. Various other social security changes are also implemented by the Act including the benefit cap.
You can find detailed commentary on the changes to tax credits made by the Welfare Reform Act 2012 in our tax credits policy section.
The provisions in the Welfare Reform Act 2012 are being gradually introduced. Some sections of the Act came into force on the day the Act was passed (8 March 2012). The remaining provisions come into force through a series of commencement orders.
You can find a full list of commencement orders in the secondary legislation section. The latest commencement order always contains a full list of earlier commencement order dates.
There are several sections in the Welfare Reform Act 2012 that were relevant for the transition of claimants from tax credits to Universal Credit.
Transfer of functions from HMRC to DWP
Section 126 Welfare Reform Act 2012 allows any tax credit function of the Treasury or Commissioners of HMRC to be transferred to the Secretary of State by an Order in Council. This provision was included in order to remove a previous provision under the Commissioners for Revenue and Customs Act 2005 which stated that certain functions, including in relation to tax credits, could not be transferred by Order in Council.
According to the explanatory notes:
'An Order under this section may also make provision in connection with such a transfer or direction, and other provision including provision relating to the use or supply of information, combining any aspect of the payment and management of tax credits with any aspect of the administration of social security and applying social security legislation in relation to tax credits. Subsection (5)(a) allows new functions to be conferred on, or functions to be removed from, the Secretary of State, the Treasury, the HMRC Commissioners, a Northern Ireland Department or any other person. Under subsection (5)(b), the Order may authorise the Secretary of State and the HMRC Commissioners to arrange for the HMRC Commissioners to provide services to the Secretary of State in connection with tax credits.'
The section also allows:
- provisions to apply to tax credits any provision of primary or secondary legislation relating to social security
- provisions that combine or link any aspect of the payment and management of tax credits with any aspect of the administration of social security
- provisions about the use or supply of information held for tax credits purposes including allowing it to be used for other purposes
- provisions in relation to information held for non-tax credit purposes and allowing it to be used for a purpose connected with tax credits.
As with the other provisions relating to tax credits, Section 126 gives DWP a wide range of powers in relation to the tax credits system.
Information sharing between HMRC and DWP
Section 127 Welfare Reform Act 2012 allows information held by HMRC (and those who provide services to HMRC) to be supplied to the Secretary of State (or to a person providing services to them) or to a Northern Ireland department (or to a person providing services to him/her) for the purposes of departmental functions. Similarly information held by the Secretary of State (and those who provide services to him/her) can be shared with HMRC for the purposes of HMRC functions.
The Section prohibits either DWP or HMRC receiving information and sharing it with any other person or body unless certain conditions are met.
The Welfare Reform and Work Act 2016
Following the Summer Budget 2015, the Welfare Reform and Work Bill was introduced into Parliament. The Bill received Royal Ascent on 16 March 2016.
The Welfare Reform and Work Act (WRWA) introduces several provisions including:
- Benefit cap changes
- Freeze of rates for four tax years
- Changes to the child element of universal credit
- Changes to the limited capability for work element and work related requirements
You can read about the bill's progress before it was enacted including explanatory notes and briefing papers by following the links below:
Last reviewed/updated 1 July 2022