Citizen’s Advice – Rebecca Rennison
- Types of migration:
- Natural migration (Universal Credit – change in circumstances)
- Voluntary migration (Choosing to move to Universal Credit)
- Managed migration (moving legacy onto Universal Credit)
How to understand more complex claims/worries:
- People have issues trusting DWP after previous experiences, Universal Credit (UC) has a bad reputation in the media
- People are worried about conditionality, as there are now different implications and factors
- The 5 weeks wait for UC payment can push people further into debt and advance payments are a reduction in future earnings
- There is a worry about change in when money is received, it is monthly rather than weekly which can conflict with previously set up payment cycles
- People are worried about paying rent directly to the landlord, for instance some people in social housing have not had to deal with this previously and may not have the capacity to do so
- Online access is necessary for people to apply for UC – which restricts those without technology, internet access and low capability with technology
- Claiming as a couple can also cause people stress and uncertainty – people are unaware of individual funds they can claim
- Those on severe disability benefit premium are worried about changes in the amount of money they receive
- UC applications cannot be withdrawn – when people claim they risk becoming worse off and unable to claim previous benefits they had been entitled to
How can people find out if they will be better off and what are the main priorities?
- Importance of advice/support
- Making sure that claimants are at the heart of the issue
- There is currently no standard support for people voluntarily moving over which needs to be addressed
- Due to Covid there has been a withdrawal of face-to-face support, people without internet access could be missing out on vital support
- There needs to be a continual conversation with DWP and adapting to issues that come up
Child Poverty Action Group – Dan Norris:
Facts and figures:
- 4.3 million children in poverty, of which 75% are from a working home
- We believe that many of people who will move to UC before the current deadline of end of 2024, at a rate equivalent to approx. 4,000 households per working day, will be claimants which the benefit system does not expect to work – carers, the disabled, lone parents of pre-school children etc.
- These groups, arguably in need of more support and often without a monthly wage packet, are acutely vulnerable to the loss of benefits income if a UC claim is not established, or the wrong entitlement paid.
Issues and concerns with Move to UC/Natural Migration
- CPAG has already raised concerns about Move to UC’s predecessor “natural migration” for several years.
- Problems arising from “natural migration” – the need to claim UC when your entitlement to legacy benefits ends and UC is the only alternative, have come to dominate reports to CPAG’s Early Warning System. And many of these problems are likely to pass from natural migration to the Move to UC project:
- CPAG have heard cases of the failures in the transfer of information between the legacy benefit and the UC system which has left disabled claimants treated as fit for work for three months or more – with their entitlement wrongly cut by £343 per month.
- Some people are wrongly advised to claim UC even though they are worse off by doing so and unable to reverse the decision when the loss comes to light. Others are forced to claim UC after a medical which finds them fit for work. When this decision is overturned by a tribunal, they remain stuck on UC.
- This “lobster pot” aspect of UC design, which prevents anyone who has established a claim for UC from return to legacy benefits, makes the current media campaign to encourage people to volunteer to claim UC, a risky venture for many. The Government believes around half of the households due to move to UC will be better off on the new benefit and suggests claimants use online calculators to check. This is a flawed approach. Calculators are best used alongside an expert adviser and there is a danger that a single wrong input could encourage households to irreversibly move to UC on the basis of misunderstanding of their future entitlement.
- Calculators cannot predict the impact of deductions from UC to repay historic tax credit debts or DWP loans and do not encompass the financial disruption caused by the requirement that working families pay childcare costs up front and wait several months to be fully compensated through UC.
- CPAG and other charities recently called on the DWP to allow test claims for UC so that the many households – those with moderately disabled children and disabled carers for example – who prove to be worse off on UC after making a voluntary claim – can return to the legacy benefit system from whence they came.
- Alternatively, the DWP could extend the transitional protection which protects those who will be compelled to Move To UC from some financial losses, to those who volunteer for UC or are naturally migrate in the meantime.
Move to UC – Harrogate pilot
- The DWP says it has gleaned “considerable amount of learnings” from the test run in Harrogate despite the fact that only around 13 households were confirmed as having made the move to UC under the pilot.
- Moving to the next stage of the pilot called “develop the service” and increasing the pilot group to 100 plus households was only countenanced when the DWP’s ability to calculate and explain transitional protection, engage and persuade claimants to claim UC and support claimants through the process, was thoroughly proven.
- Given the numbers engaged in the pilot and its premature roll-up, it is hard to be confident that the “considerable amount of learnings” the DWP is relying on to protect the welfare of millions of vulnerable low-income households, are robust.
- CPAG would like to see a pause in the Move to UC programme until a full pilot is completed and evaluated and published. Transitional protection and other strategies to support vulnerable claimants must be robust, transparent and challengeable before anyone else is in effect asked to rely on them to feed their children and keep their home.
Turn2us – Anna Stevenson:
Jane’s, a benefits claimant, experience:
- Jane works in the creative arts sector, but she has serious health issues that have been exacerbated by the pandemic
- Jane has two children and receives Working Tax Credits, Child Benefit, Council Tax Benefit and Housing Benefit and is worried about the possibility of migrating from legacy benefits to Universal Credit after previously using the Turn2us Benefits Calculator to check her entitlement
- Universal credit means some of her disability payments would be reduced/withdrawn, meaning many people will be worse off
- The thought of migrating is stressful, people need to pay off debts and have a small pot of savings
- Shame around claiming benefits and phrases like sanctioning only make it worse – “So the thought of writing down in the most detailed form all of your medical history and discuss it with several different people to reclaim your entitled benefits, is difficult. I have been through the benefits system on and off for several years so I know how humiliating it is talking about private medical things again and again because of lost admin or delays by the DWP or councils. For me, even the thought of migrating is very stressful and I know it wouldn’t be plain sailing at all”
- The focus is on the admin side of things and how to make it easier for the DWP, rather than those who need to claim
- There is no confidence in UC
- It is all online which can make it difficult to access due to financial restraints and disabilities such as dyslexia
- UC requires paperwork monthly if not weekly which adds further stress
- A new benefits system causes panic especially with rising cost of living
Deductions for Debt:
- UC has deductions for debt, including recovery for tax debts people don’t know they owe, meaning payments become lower than expected which can completely unravel people’s budgets
- Since at the time people use the Turn2us calculator, they do not know about these debts, we are not able to show them, and this means people do not receive adequate forewarning of the likelihood that it may be some time before they receive their full entitlement to Universal Credit
- The 5 weeks wait for a payment can put people in debt as people on average wait 9 weeks before claiming
- Since around 40% of households on Universal Credit have at least one deduction, and on average people pay around 15% of their standard allowance as deductions, these are significant figures.
- The DWP is the most common creditor of people being referred to foodbanks, according to the Trussell Trust’s report.
Different pay periods:
- 40% of families earning less than £10,400 a year are not on monthly incomes. This can lead to incomes which, from claimants’ perspectives, are regular, being seen by Universal Credit as uneven. UC is a new/different pay cycle which can also disrupt people’s budgets
- Payments are based on the date when people apply for UC, which has no correlation to when bills/rent/childcare needs to be paid
- Because of the way different pay cycles interact with the precise date someone claimed or claims UC, it is difficult for us to get the information we would need to be able to calculate how differing pay cycles will affect Universal Credit entitlement. We do not think most claimants know their assessment period dates, and we think asking users to tell us when they plan to claim Universal Credit, at a time when most users probably have not even made up their minds to claim Universal Credit, would be confusing and off putting.
- While we can warn them that Universal Credit pays childcare elements in arrears, it is difficult for us to get users to tell us when their childcare billing dates and Universal Credit assessment period dates fall to enable us to calculate a precise amount of childcare element, they can expect to receive that month.
- It is also difficult to communicate that while, in general, they can expect to receive Universal Credit of y, in this particular month, they should expect Universal Credit of x.
Problems with childcare payments:
- Childcare can often be the largest element on people’s claims after housing. Childcare providers will often expect payment in advance.
- Universal Credit only pays in arrears for childcare which has been received in the assessment period. This means that where a childcare provider’s billing schedule does not match a claimant’s assessment period schedule, the first payment of a childcare element can end up being much lower than a claimant expected. This is particularly an issue for existing Universal Credit claimants moving into work.
- Firstly, households could receive the same transitional protection as they will receive under managed migration. Although the DWP took the decision not to extend transitional protection to claimants who naturally migrate, this was because of the financial cost of doing so at the time. The overall cost of transitional protection will now be much lower as many households have already migrated to UC. The fact that UC entitlement is higher for workers post-budget also means there will be fewer losers from migration.
- A second option would be to permit test claims, whereby a household puts in a claim, gets a decision on how much they receive and can choose to revert back to their existing situation if their UC entitlement is lower.
- A third option would be to compensate any claimants who voluntarily migrate, and lose out, as a result of the campaign. This could be provided as a compensation payment, as has been the case for claimants receiving a Severe Disability Premium in recent months.
- Better information on existing debt, and an end to the 5 weeks wait.
- Facility to average pay, or at the very least, facility to identify people who are not paid monthly and give them relevant budgeting advice and support.
- Pay childcare costs in advance to match childcare billing practices.
- Ads/paid posts show universal credit as a guaranteed improvement and ignores 1 million people will be worse off
- No way to go back on decision to go on UC and people become trapped with lower amounts of benefits
- When someone moves due to natural migration, they may be entitled to new style jobseekers’ allowance which could give access to individual income for those in couples, it would however be deducted from UC