Transitioning onto Universal Credit
The APPG on Universal Credit is a cross-party group, which was established in order for Members of Parliament of all parties to be able to come together to discuss the experiences of their own constituents, to receive advice and support from various agencies, to share best practice at supporting constituents and monitor this critical policy as it is rolled out.
The APPG accepts the core aims of Universal Credit (UC) in simplifying the benefits system and making it easier for people to move into work. The reality of UC, however, does not live up to these good intentions. We are seriously concerned that the design of UC does not sufficiently take into consideration the specific needs of the poorest working age people in the UK, and that in its current form, UC does not work in their best interest.
On 20 June 2018, the APPG held an evidence session on Transitioning onto Universal Credit, hearing evidence from Croydon Welfare Rights, Citizens Advice’s Craven and Harrogate Districts and Derbyshire Welfare Rights.
OVERVIEW FROM APPG CHAIR
50% of constituencies have UC full service. The remaining 50% will have full service rolled out autumn/winter 2018.
At present transition onto UC should only be by ‘natural migration’- a change of circumstances which leads to a new claim for UC, instead of what would have been a legacy benefit. Child Poverty Action Group have produced guidance on ‘natural migration’
There is a need to push the DWP to make change to UC due to the problems encountered during roll out and now it has been accelerated.
Key issues people experience transitioning onto UC:
- A drop in income when migrating from legacy benefits to UC, as UC can be less generous and transitional protections (TPs) are not applicable to claimant being moved onto UC due to a change in their circumstances (natural migration).
- A lack of criteria: The DWP have not set out the criteria natural migration.
- Changes in payments: People may earn more in one assessment period than another- therefore their UC award changes from month to month.
- Speed of the transition: People are being transferred to UC too quickly.
- Croydon Welfare Rights’ evidence
Croydon Welfare Rights assist and advise residents on welfare issues that live in the area covered by Croydon Council. Croydon was a key pilot area for full service roll out of UC.
Example of Transitioning a self-employed claimant onto UC
The claimant is aself-employed mini cab driver. His wife has severe mental health issues and receives PIP, they have two children. They moved onto UC in June 2017.
The client received the following legacy benefits:
Working Tax Credit £76.36 per week
Child Tax Credit £117.50 per week
Housing Benefit £123.65 per week
Total: £317.51 per week (£1,375.87 per calendar month)
The client’s taxable profit from self-employment was only £4,626 in 2016/17 as he has a very high level of expenses.
Prior to transition he used to keep up to date with his rent.
Issues the client has encountered following the move to UC:
- UC haven’t allowed all the expenses that client has, falsely inflating his profits.
- He has been affected by the Minimum Income Floor so his UC is calculated on the basis that his profit is 35 x minimum wage each week, even if actual profit is lower.
- No housing costs were paid for months – as on the application client had truthfully entered the figure he actually paid for rent (£10 pw as Housing Benefit paid the rest).
- When the client’s housing costs were finally were agreed the DWP refused to backdate until appeal.
- When the client’s housing costs were agreed they didn’t pay much as his income for previous months was increased on their system so his UC award decreased or stayed the same. Croydon WR queried this with the DWP but have not received a response.
- The Client has claimed as a carer for his wife and several months ago asked for Minimum Income Floor (MIF) to be reduced because he can’t work full time, (MIF is based on full time hours) but it still hasn’t happened.
- The carer’s element was only added to the client’s claim from Feb 2018, although Carers Allowance was awarded effective 10 July 2017. Croydon WR queried this but have had no response.
- The actual amount of UC the client has been paid has been very variable even though his income and expenses are fairly consistent.
- The client has been had deductions from his UC claim of £158.56 per month – for money he apparently owes to HMRC and DWP but he isn’t clear what for and the deductions don’t seem to reduce.
- The client currently has approximately £1,200 rent arrears due to all these problems.
Recent UC payments (compared to £1375 in legacy bens):
March 2018 £936 UC + £271.70 Carer’s Allowance = £1207.70
February 2018 £608 UC + £271.70 Carer’s Allowance = £879.70
January 2018 £459 UC + £271.70 Carer’s Allowance = £730.70
Dec 2017 £512 UC + £271.70 Carer’s Allowance = £783.70
Nov 2017 £239 UC + £271.70 Carer’s Allowance = £510.70
Key issues of Transitioning clients onto UC
- Families face difficulties in budgeting where there is a monthly change to the UC payments, but no explanation for the change in amount.
- Transferring from legacy benefits to UC, the main difficulties being faced are explaining to claimants (i) how UC payments work, and (ii) the housing cost application.
- Croydon WR have found it better for clients to stay on ESA where changed circumstances results in less of a change in income than when switching to UC.
- MR waiting times have increased. People try to rely on local welfare assistance, such as food banks, until they get their Mandatory Reconsideration submitted.
- There are often delays of 4 – 5 months where a claimant submitting fit notes does not receive a UC50 to complete or is invited to attend a Work Capability Assessment.
- There is a failure to make it clear to clients that a separate council tax reduction claim must be made.
- Croydon WR have worked hard to establish a good relationship with the local Job Centre – if we hadn’t, we would have encountered more problems.
- Vulnerable clients are referred from the Job Centre to the Welfare Team at Croydon WR, however often these clients, such as those with corporate appointeeships, need consent for us to act for them. As UC is digital by default this can be difficult.
- Poor digital support for claimants who need it and a lack of reasonable adjustments made for vulnerable claimants who cannot manage a digital claim.
- Payment allocations do not come with a National Insurance Numbers, this makes it hard to allocate payments for people who have a corporate appointeeship.
- Citizens Advice Craven and Harrogate Districts
Citizens Advice aims to provide advice to people in need and improve the policies and practices that affect people’s lives. Citizens Advice provides free, independent, confidential and impartial advice to everyone on their rights and responsibilities.
Key issues of Transitioning clients onto UC
3 clients’ stories illustrate some of the main issues that aren’t being talked about:
- Problems with Assessment Periods (APs)
- Some clients are waiting 10 weeks, instead of 5 for their first payment if they have a final payment of income during their first AP.
- Clients lose the first payment, so can end up £500 or more worse off.
Client with a young baby applied for UC as her maternity pay was coming to an end. She told at the Jobcentre to apply for UC and she would be paid at the end of her first AP. However, she received only a few pounds for her first UC payment.
After a number of calls to the UC helpline CAB were told she had claimed UC too early – her final maternity pay had been paid in her first AP and included as income for that month.
The client had to last a further month, having already used her final earnings as she believed that she only had to make these last until the end of her first AP. She was left with a young baby with no money for food, rent or utility bills. She could not claim an advance payment as they can only be paid in the first AP.
Unlike people whose claims are delayed for administrative reasons, the client had permanently lost this money, so even after she received her UC payment, she would have no money to pay off the rent arrears and utility debts that had built up.
Advice on APs
- The message people get from the media is that there is a long wait for your first UC payment so they believe they shouldn’t delay claiming.
- DWP’s explanation behind the policy intent for the 5-week wait is that when someone finishes work and makes a claim for UC they will live off their final monthly earnings until the end of the first AP.
- Their AP starts as soon as they make a claim, but employers often don’t pay final wages straight away.
- Now the 7-day wait is abolished, more people will be caught by this problem when final wages are paid late – a significant minority are affected.
- In 9 days of cases seen by their local CAB office (1 of 300 CAB offices) 3 people were affected. They feel tricked by DWP and very angry.
- Before UC, the standard advice to anyone who had finished work was to make a claim for benefit as soon as possible.
- UC creates a complex trap for claimants and for non-specialist advisers such as GPs, social workers, food banks etc. who are used to just signposting to benefits.
- If you finish work partway through a monthly payment cycle you may need a better-off calculation to determine whether you should wait before making a claim for UC.
- If you are paid a day before your AP starts then that income will be ignored. It shouldn’t depend on when your employer pays you.
How to fix AP issues
This issue could be solved by amending the regulations on employed earnings ‘to ignore – in the case of a new claim – any final payment from an employer after the claimant’s employment has ceased’.
- Clients being told they need to claim UC, when they don’t
We have seen many clients who have lost money because of incorrect or incomplete information from the Jobcentre, DWP and HMRC helplines. As seen in the previous case, it often leads to people claiming at the wrong time. People are also being told they need to make a claim for UC when it is unnecessary and so losing their legacy benefit and sometimes transitional protection (TP). It is very difficult and time-consuming to get compensation.
A couple with children were both working and claiming Working Tax Credit and Child Tax Credit when the husband became seriously ill and had to stop work. A Tax Credits helpline adviser incorrectly informed them that they would have claim UC and closed down their Tax Credits claim even though the woman was working sufficient hours for Working Tax Credits, and the husband had sufficient contributions to be entitled to new style ESA. They made a claim for UC but weren’t entitled because of savings of more than £16k.
- Wrong information provided to claimants
Helplines are providing incorrect information, delayed services and are unresponsive to concerns raised.
A single mother with a young child – in support group of ESA – wanted to see if she could work. The ESA helpline adviser reassured her that under the ESA linking rules she could reclaim as long as she rang within 12 weeks of stopping her ESA. She couldn’t manage to continue working but when she rang to try to reclaim her ESA she was told she couldn’t and had to claim UC. As a result she lost her right to transitional protection of the Severe Disability Premium (SDP) worth over £180 a month. Citizens Advice have the telephone recordings confirming that she was wrongly informed by DWP and she has received some compensation for having to live on the basic rate whilst going through reassessment, but still nothing for the loss of the SDP. If she isn’t covered over the next decade she is likely to lose about £14,000.
Advice on SDP
- It was very welcome news that those with Severe Disability Premium (SDP) who have moved to UC before managed migration will have Transitional Protection (TP).
- It will presumably cover those on HB who move to a different LA so have to claim UC and thereby lose their SDP.
- However, it’s not clear if it will cover people with SDP who try work but can’t continue.
- It is vital that people with the SDP who have no conditional requirement to enter work are able to try work without losing the SDP if they can’t continue in work.
- Last week’s ministerial announcement in effect promised linking rules for TP for someone who is on UC and wants to see if they can manage work.
- It makes no sense to leave disabled people who are not yet on UC unable to risk trying work until managed migration happens.
- When someone makes a new claim for UC having left employment, final earnings from an employer should be ignored.
- DWP and HMRC staff should be trained in the dangers of advising someone to claim UC without understanding their full circumstances and the possible loss of income and transitional protection.
- They also need training in the importance of timing a claim for UC and the hardship that can ensue if timed incorrectly.
- Transitional Protection regulations due later this year must protect someone on ESA with the SDP who wants to try work and then finds they can’t continue.
- Bring back Work Related Activity Group or limited capability for work to support disabled single parents who now suffer a huge loss of income under UC.
- Derbyshire Welfare Rights
Derbyshire Welfare Rights provides welfare advice and help with appealing benefits decisions for people who live within the area covered by Derbyshire County Council.
Key issues of Transitioning clients onto UC
- Natural migration happening for very little change of circumstance
- Claimants have been told by DWP to claim UC where no UC claim is needed because there has not been a sufficient change of circumstances– e.g. moving home within the same LA area, which would not require a new claim.
- Claimants who have moved home as they have no choice – for instance to escape harassment or violence – rigger a new claim for housing costs, which then closes all other legacy benefits and leads to loss of disability premiums.
- There have even been circumstance
where people have been taken off legacy benefits because of someone else’s
- For example, the claimant loses the SDP and the Enhanced Disability Premium, and loses further still under the UC rules as he is both a disabled person and a carer, and cannot receive UC elements for both, unlike under the legacy benefits system.
- Claimants transitioning from ESA to UC
- Claimants have been told to go through a new Work Capability Assessment (WCA), when they are migrated from Income-Related ESA and have a current assessment that they have limited capability for work/work-related activity.
- They are told they will not receive any additional UC element until after the WCA.
- This is contrary to the provisions of Regulation 19 of the UC (Transitional Provisions) Regulations) 2014].
- Claimants found fit for work on ESA, and who wish to challenge this decision, are obliged to claim UC when they have no money to live on.
- If the ESA decision is then revised, the claimant may still lose money because they cannot return to Income-Related ESA even if they were better off on that benefit
- The only way for claimants to retain Income-Related ESA is to make no new claims for means-tested benefits and await the outcome of the MR/appeal but few have the resources to do this, especially as appeals are now taking 26 weeks or more to list.
- UC overpayments
- Where official error has led to UC
overpayments, unlike the legacy benefit system, the claimant remains liable to
repay the overpayment.
- A Code of Conduct regarding recovery of overpayments was expected to be published in May 2018. However, it was decided that a separate policy document regarding the recovery of UC debt was no longer required because the Benefit Overpayment Recovery Guide (BORG) incorporates the department’s wider policy on the recovery of DWP debt.
- UC backdating rules restrict backdated payments to 1 month only.
- There are limited criteria to receive backdated payments – official error and wrong advice are not included in this, unlike the legacy benefits system.
- Digital by default
- The ‘digital by default’ design of UC
appears to disadvantage claimants who are wholly unable to make or maintain
- Vulnerable claimants do not have email addresses and email addresses cannot be created for them so they cannot make claims online.
- Though support has been put in place to assist people to make an online claim, it is unclear what happens when ongoing intensive support is required.
- Schemes to support vulnerable claimants have been drawn up by Jobcentres (on a localised basis) but when we have asked to see them we have been told by DWP they cannot share it with us.
- Explicit consent
- Refusing ‘implicit consent’ and insisting upon closely-defined ‘explicit consent’ is hampering advice work, especially in urgent cases and cases in which the claimant is vulnerable and has no access to IT.
- Derbyshire Welfare Rights are authorised appeal representatives for one claimant for PIP and ESA; UC agree that this is so, but refuse to speak to us as he is unable to give online consent. A formal complaint has been lodged.
- Communication with UC, even where there is accepted authorisation, is slow; some matters are taking months to resolve
- Corporate Appointeeships
- For the last 3 years Derbyshire WR have been asking DWP how clients with corporate appointeeships can claim UC as email addresses cannot be made for these clients. We have not received an answer.
- There are around 400 corporate appointeeships and 200 to 300 cases of deputyship in Derbyshire.
- Incorrect advice given by DWP
- There have been delays in claims owing to incorrect DWP advice, I-R ESA claims continuing after UC has been claimed, and DWP advising people to make claims for Housing Benefit in full service areas because they receive Contribution-Based ESA.
- Derbyshire WR spend weeks/months trying to get answers from DWP which are followed up with complaints.
- Claimants are being told that contribution-based benefits no longer exist in full service areas (this is incorrect).
- Confusion remains over ‘new-style’ JSA and ESA in full service areas; claimants still appear to be being told that these benefits do not exist and they must claim UC – even when they have no eligibility for UC and/or do not wish to claim it.
- Claimants are being guided by DWP to claim new-style ESA by telephone only whereas written claims are allowed for in the regulations.
- Also that DWP appears to hold that claims are not valid unless telephone calls are made and Jobcentre appointments are made and attended. The appointments are for the purpose of gathering evidence to support the claim, and do not affect the validity of the claim as such.
- Once UC claims are established, claimants often have considerable deductions made from their benefit (which then affects their ability to pay their living costs).
- These deductions are to repay benefit advances etc but claimants are also having money taken for historic DWP debts and Tax Credit overpayments
- It is not yet clear in all cases that they have had the chance to challenge the decisions or request that recovery should not take place owing to hardship.
- Not attending Job Centre meetings
- Claims are being closed if clients don’t attend a meeting at the Job Centre and they have to make a new claim.
- This is contrary to regulation – these meetings are part of the ‘supporting evidence’ process
- Claimants should be given a month to produce supporting evidence and a decision on entitlement should then be made.
- DWP full service guidance is at variance with the law.
EVIDENCE FROM PARLIAMENTARIANS
The following concerns and recommendations were raised and made.
- DEBBIE ABRAHAMS MP
Oldham was a pilot area for UC.We have had full service UC since April. It is still the second biggest caseload in my mail bag. We now have 3 foodbanks, we had none before 2017.
- OFFICE OF STEPHEN POUND MP
Ealing North has had full-service UC since the end of March. The Local Authority have been giving claimants the wrong information about Housing Benefit and then refuse to pay it back. DWP are telling claimants to contact their MP – we will be taking this up with DWP. We are meeting with the Jobcentre in July to discuss the problems.
- RESIDENTIAL LANDLORDS ASSOCIATION
Private landlords do not know if a tenant is moving on to UC or not. Social landlords have a better portal than private landlords.
- RUTH GEORGE MP
In UC the housing is imbedded in the overall amount. People need to be made aware that they need to their rent out of the overall UC lump sum, unlike legacy benefits. Landlords need to inform claimants they need to pay – claimants may not know if they were on legacy benefits. It is unlikely private landlords will get money back for missed payments due to transitioning, hence why they are choosing to evict tenants or not renew leases.
- Constituents can calculate whether they will be better off on UC before they have a change of circumstance: https://benefits-calculator.turn2us.org.uk/AboutYou
- The Commons Library tool allows members to check how complete UC roll out is in their constituency: https://commonslibrary.parliament.uk/social-policy/welfare-pensions/benefits/constituency-data-universal-credit-roll-out/
- There will be an Urgent Question tomorrow following the publication of the National Audit Office’s report: https://www.nao.org.uk/report/rolling-out-universal-credit/
- The DWP surveyed 1,000 full service claimants twice, the first 5 pages give an overview of their experiences: https://www.gov.uk/government/publications/universal-credit-full-service-claimant-survey