APPG ON UNIVERSAL CREDIT
Evidence session on Claimants under 25
Report from informal meeting on 9th June 4:00pm-5:30pm
The APPG on Universal Credit (UC) is a cross-party group, which was established in order for Members of Parliament and Peers of all parties to be able to come together to discuss their experiences of UC and those of their constituents, to receive advice and support from various agencies, to share best practice at supporting claimants and monitor this critical policy as it is rolled out.
The APPG accepts the core aims of 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, that it fails to provide many households with sufficient income to get by and that in its current form, UC does not work in their best interest. When this is coupled with the cuts to UC, for example, from the work allowances, taper rate and disability premiums, evidence indicates that some groups of claimants, including disabled people and single parents, are worse off than under the legacy system.
On 9th June, the APPG held a virtual evidence session on claimants under 25, hearing from: Resolution Foundation, Who Cares? Scotland, Centrepoint, DWP Kickstart, Child Poverty Action Group, National Leaving Care Benchmarking Forum.
Of the 56 attendees, the following parliamentarians were registered: Peter Grant MP, Stephen Timms MP, David Linden MP, Anne McLaughlin MP, Peter Grant MP, Christina Rees MP, Kate Osborne MP, Syed Kamall, Wendy Chamberlin MP, Bim Afolami MP, Marsha De Cordova MP, James Cleverly MP, Rachel Hopkins MP, Angela Crawley MP, Marion Fellows MP.
- Resolution Foundation: Karl Handscoomb
About Resolution Foundation
The Resolution Foundation is an independent think-tank focused on improving living standards for those on low to middle incomes. They work across a wide range of economic and social policy, combining their core purpose with a commitment to analytical rigour. Karl joined the Resolution Foundation in January 2020. He specialises on welfare, but also works on broader labour market and economic growth issues.
Why are more young people claiming UC? large sectors of economy shut down, either been put on furlough or not and had to claim UC as a result. Young people felt the brunt of the labour market crisis as a result of the pandemic.
- January 2021 – 20% of those working before the lockdown now not working – 18-24 – highest of all age groups, 8% of those working before lockdown had been on furlough (under half of those who were working).
- 40% had lost pay, stopped working or been furloughed, which compares to 1 in 4 of the general working age population.
- Number of people claiming UC has doubled, with half of this increase coming from young people.
- Young person rate is £79 a week (with uplift) compared to £95 for over 25s – 16% less – in October will have £59 a week to live on.
- Housing element is offered at Shared Room Rate for young people, which is a lot less and there often are not shared rooms to live in, so left with a housing shortfall very quickly.
- Income replacement rates a lot lower than general population – 20% and 60% of previous income – every pound you earn, when you lose that job and claim UC –people left between 25p and 50p per pound of previous income – low earners to start with, so it is a precarious position to be in.
- More people are in education than before, but this is not offsetting the number of people not in work or education.
- One Parent Families Scotland: Olivia – a young parent
One Parent Families Scotland is a charity working with single parent families in Scotland. They provide advice, practical support and campaign with parents to make their voices heard to change the systems, policies and attitudes that disadvantage single parent families.
Has a child of 3 years old and first claimed UC in 2019. She was living with her mum at the time, who was self-employed. Her mum had an assessment for benefits and she was told she wouldn’t receive anything. She had no money to pay bills or rent. Olivia was on income support and had to support family, but was receiving no money for rent. They were told they were going to be evicted, at the time her baby was only 6 months old. Her mum was made homeless and Olivia’s only support was gone. Olivia took over the house and moved onto Universal Credit from Income Support. It was a big drop in income for her, and she struggled affording essentials. When she found out she was getting less because she was under 25 she thought this was unjust. Still to this day her mum is homeless, and they don’t see each other as much. Olivia is now at college, working and providing childcare. Her mother’s arrears rolled onto her, on top of the advance loan – amounted to over a grand worth of debt.
Those under 25 and over 25 receive the same amount.
- DWP: Tammy Fevrier – deputy director for youth and skills in DWP
Tammy is Deputy Director, Youth & Skill at the Department for Work and Pensions. Tammy leads the implementation of the DWP Youth Offer and works to improve the alignment between employment and skills in the department’s labour market offer.
- Youth offer – September last year implemented youth offer for 18-24 on Universal Credit under intensive work search, includes; 13 week youth employment programme, collocated and co-delivered youth hubs supporting YP with skills gaps, training, mental health support, debt management, housing support – 1 stop shop place based approach – 130 open (across country with local staff to find suitable provisions, going where the need is). Youth employability coaches for YP with specific complex needs.
- Kickstart – ambitious employment programme to create 6 month placements for young people aged 16-24 on UC and at risk of long term unemployment, as they know the scarring effects of being out of employment at the start of their job journey. Restart scheme – people on UC who have been out of work from 16-18 months, roll out in July.
- CentrePoint: Billy Harding
Centrepoint provides homeless young people with accommodation, health support and life skills in order to support them to move into independence and access education, training and employment. They want to end youth homelessness by 2037. Billy is the Policy and Research Officer at Centrepoint, focusing on housing and welfare. Before his role at Centrepoint he worked at Southwark Group of Tenants Organisations and Citizens Advice. Billy will be joined by representatives from the Centrepoint peer research team, who are young people conducting research to improve the benefits system.
- Conducting a peer led research project about young homeless people’s experience of social security.
- Young people going through homelessness do not have access to financial support from friends and family, plus have additional barriers to work – UC is a real lifeline to them. This leaves them at risk of exploitation and abuse.
- For young homeless people accessing UC, where they don’t have access to financial support from friends and family, the 5 week wait and advance loan can compound financial hardship, by increasing the amount of debt they face.
- Young people in supported accommodation, interaction between earnings and entitlement – UC for living costs and Housing benefit for housing costs – when start earning UC is tapered away and their housing benefit is recalculated – often lowers income significantly, so prevents many from working.
- This is a group that already faces barriers to work and this should not be compounded.
- Evaluated the Youth obligation support programme in 2018 – precursor to existing schemes – facing homelessness and MH crisis – 50 people tracked, only 5 in work, half dropped off benefits entirely and it was unclear what, if any, support receiving.
- Support needs to be tailored to support the most vulnerable young people
- The uplift has been vital and Centrepoint wants this to be made permanent.
- There is a need to equalise the rates for over 25s and under 25s living independently. Lower amount makes it harder to move on to homelessness.
Morgan – peer researcher at Centrepoint
Findings and personal account
- Whilst at university, became depressed, dropped out and became homeless for seven months.
- Forced to take an advancement loan out and struggling to pay it back.
- Within 2 weeks, doesn’t have enough money to get by. Cannot afford new clothes. Has to borrow from friends as money doesn’t cover the entire month. £110 to live on for the entire month after rent and bills – for food, travel etc.
- Never thought would be in this position – can happen to anyone. Not looking for work as would have to move on from housing provided by Centrepoint.
- Surveyed 150 young people receiving support from homeless charities – ¾ receiving UC. Findings – 16% of YP say their benefit levels are enough to get by. 1/3 of YP say benefits don’t cover rent and bills. 4/10 say rates aren’t high enough to find work, education or training, a common thing for people at CentrePoint. ¾ of YP say they have stressed or worried about low rates – ¾ of this number has had a negative impact on MH. Nearly half say they have used a foodbank. 1/3 people say they have resorted to doing things they’re uncomfortable with (such as criminal acts and sex work) for money. Half of YP say taking away the £20 uplift will make it harder to afford essentials like food. This is a quarter decrease in income for young people. Of YP who have had experiences with the Jobcentre, 1/3 say these experiences have been negative. More YP said they felt they didn’t feel close enough to their work coach to disclose personal information – need to tailor to more complex needs. When accessing advice from JC, only 1 in 5 said JC takes into consideration their goals and aspirations. 52% said they had to turn down or not look for work because of the impact it would have on their benefits.
- Who Cares? Scotland: Charlotte Armitage
About Who Cares? Scotland
Charlotte Armitage is a Care Experienced young woman and Public Affairs Support Officer for Who Cares? Scotland. Charlotte has worked for the organisation for four years and has played a key role in delivering legislative and policy changes for Care Experienced people in Scotland. Most notably Charlotte was involved in the lobbying ahead of the introduction of a Guaranteed Offer for Care Experienced university applications, the expansion of the upper age limit on the Care Experienced bursary and the expansion of early learning and childcare funding for Care Experienced parents. Outside of Who Cares? Scotland, Charlotte is a committed activist and is currently studying History and Sociology at the University of Glasgow.
- Lifelong opportunities team provide holistic support aged 16 and above. Since 2014 this team has worked with more than 500 care experienced people. Most common issues involved are the resolution of benefit issues, supporting with UC claims and issues encountered with applying for UC if in receipt of SEIS bursary.
- Between 2013 and 2019, 12% of all advocacy issues raised by member 16 and above were related to welfare issues.
- Response to lockdown was first responder helpline, which dispensed support and financial assistance to over 800 care experienced people in the first 100 days.
- Those experiencing poverty and financial difficulty prior to lockdown experienced significant impacts – struggling to put food on the table.
- Many people calling the helpline found themselves unexpectedly unemployed and struggled with the complex process of applying for UC.
- Care experienced bursary to provide financial support for CE students to study and allow for equitable access to study. This is meant to supplement existing income, however under UC it is classed as income, causing systemic complications issues for care experienced people. This is a particular issue for people who receive additional benefits due to being a parent themselves.
- Not uncommon for overpayments to be made to bursary recipients due to errors in calculating, resulting in repayments further down the line.
- LMS Care Leavers marker was introduced October 19th 2013, followed by a cross-departmental care leavers strategy. Significant step in ensuring CL experience priority employment and benefits support. However, this CL marker does not exist in UC, despite the promise that incorporation of existing support in legacy benefits into UC. This has meant Jobcentre staff are no longer aware of a person’s care experience unless they self-declared or provided by a LA worker, therefore care experienced people unable to access additional support previous Secretaries of State have promised.
- Who Cares? Scotland calling for the bursary to be discounted as income, to allow it to fulfil its original purpose. Population of care experienced people in Scotland is 0.5% of the general population in Scotland. Only 4% of CE people make it to university, so this change will only apply to 0.1% of the population, and not everyone in this group will need to apply to UC.
- Introduce Care Leaver marker under UC
- National Leaving Care Benchmarking Forum: Hannah McCowen
About the NLCBF
Hannah is the National Leaving Care Benchmarking Forum (NLCBF) Manager at Catch 22. The forum has 120 local authority leaving care team members and works to share best practice and improve outcomes for young people leaving care. This is achieved through regular events for young people and leaving care professionals; engaging with care leavers through the Young Person’s Benchmarking Forum and working closely with the Department for Education, Ofsted, other government departments and leaving care organisations.
- In January and February of this year they consulted with care leavers around Universal credit and spoke to 106 care leavers.
- The additional £20 has made a huge impact on care leavers – benefiting in particular their mental health and ability to stay connected to people.
- One care leaver said, ‘The extra £20 has seriously impacted me in alleviating the burden of scrambling to make ends meet or shivering during cold winters so I can cut corners on gas. Please reconsider slashing the extra £20.’
- The additional £20 has assisted with purchasing food, heating, supporting mental health and for emergencies.
- Leaving care professionals say young people are managing their finances better – it’s still not a lot to live on, but they have less young people in financial crisis.
- Universal credit is a barrier to work when care leavers are living in supported accommodation. This is a structural/systems issue where a young person will get a job and then end up paying huge rents on supported accommodation.
- Reality Cheque Project – Sheffield Care Leaver Union ran a project called the Reality Cheque where they invited people to live on £24 for 5 days – and this was worked out based on universal credit, after money for bills was taken out. 90 people took part including Sheffield chief executive and the Director of Children’s services. With the £24 they had to purchase their food, drinks, all activities and travel, they had to purchase toiletry and a household item and on the Wednesday of that week they all received an envelope with an unexpected windfall or an unexpected financial challenge. What came out of that was that people who took part said the biggest impact of living on this low amount of money was on their mental health, they felt grumpy, unhappy and isolated – unable to purchase anything extra than the basics. This highlights the important link between living on such a low income and mental health.
- UC as a barrier to work needs to be looked at for care leavers and other vulnerable young people living in supported accommodation – so that Universal credit does make work work. So that care leavers live in the best place for them, not dictated to by the universal credit regulations
- Care leavers should be receiving the over 25 rate – they are financially independent and responsible for their bills and living costs from the age of 18.
- Child Poverty Action Group: Lynsey Barber
CPAG brings their understanding of what causes poverty to campaign for policies that will prevent and solve poverty; and they provide training, advice and information to make sure families get the financial support they need. Lynsey Dalton joined the Child Poverty Action Group as a trainee solicitor and Justice First Fellow in January 2019. She has vast experience in the field of benefits, having previously managed the Benefits and Money Advice Team for Royal British Legion and worked in the field of social welfare for over 12 years.
Works on the Early Warning System at CPAG, which collates case studies from welfare benefits advisers and individuals. Allows to identify areas of concern and widespread issues, being able to identify patterns. Three of these are:
19 year olds in full time non-advanced education:
- Still at school or college – usually living at home as a dependant of the family.
- No longer included in family claim, cannot claim UC because in full-time education, cannot access student finance available to those in advanced education. Family needs to find a way to support a young adult with no amount included in the UC award to provide for them.
- Young person may be forced to give up education. Those affected are still in non-advanced education two academic years after their peers have moved on to work or advanced education – there is usually a reason for this. The cases often involve a young person with a learning difficulty or a disability. Also had a case where the young person was a refugee who had to wait for a place at school. Other reasons could include an accident or period of ill health, or because the young person is a carer. Those affected are often already dealing with adverse situations – lack of financial support to complete their non-advanced education is a further barrier.
- Generally cannot receive UC while in full time education. Exception if the student receives PIP or DLA and has limited capability for work.
- Prior to August 2020 a disabled student could make a claim and should have been referred for a work capability assessment. Often told could not get a CWA because they were a student – High court decision Oct 2020, this is unlawful and there should be a WCA to determine whether claimant is exempt from requirement to not be in education and therefore meets the basic conditions for UC (Kauser & JL v SSWP CO/987/2020). SSWP’s response to JR challenge was to amend reg 14 UC Regs 2013 – a person in FTE can now only meet the eligibility requirements for UC if they have already been assessed as having LCW.
- Disabled students in a catch 22 position – cannot get UC without a determination of LCW and cannot get that determination without UC entitlement. Disabled students are less able to subsidise their student income through work and so UC is an important lifeline.
Shared room rate:
- Single people under 25 with no dependents are only entitled to the shared room rate under UC housing costs. Exceptions to this rule apply in certain circumstances – if the young person is receiving PIP, was previously living in a homeless hostel for 3 months, or if they are under 22 and was previously looked after by the local authority.
- Advisers are reporting that applying the exceptions requires manual intervention. Even if, e.g. the young person received PIP and this is recorded on the UC system, shared room rate will be applied. Young person needs to be able to recognise that the housing costs are incorrect, then raise with UC and try to get the rate corrected. The manual override seems to last only one assessment period. Following that the rate reverts to the default shared room rate.
- The young person has to keep checking their housing costs and raise it with UC if the rate is incorrect. If they do not stay vigilant, they risk the wrong rate being paid and falling into arrears.
- Nicole – a young parent from OPFS
Has 2 children. She was on Income Support and then once had a daughter she was not entitled to Income Support anymore, had to go onto UC and was evicted from her house as UC did not cover the costs. She was left with a lot of debt from this. Difficulty paying for bills, food, and things for children. Sometimes has to ask her family for money, but then the next month she has to repay so it’s a constant cycle. She has had to sell possessions. Makes her feel inadequate as a parent, and has struggled with her mental health. Her children had to stay with her family as she was struggling with finances and her mental health, which exacerbated mental health issues.
Why do older people get more money? Living costs are the same. The payments should be the same.