Evidence session on the impact of COVID-19 on Universal Credit
Report from informal meeting on 5th May 2020
OVERVIEW
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 of 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 5 May 2020, the APPG held a virtual evidence on the impact of the outbreak of COVID-19 on Universal Credit hearing evidence from: Citizens Advice, NACCOM network, The Children’s Society, Child Poverty Action Group, and UC:Us.
Of the 120 attendees, the following parliamentarians were present: Debbie Abrahams MP (Chair of the APPG on Universal Credit), Bim Afolami MP, Fleur Anderson MP, Paula Barker MP, Hilary Benn MP, Baron Boateng, Ruth Cadbury MP, Stephen Farry MP, Yvonne Fovargue MP, Drew Hendry MP, Rachel Hopkins MP, Baroness Ruth Lister of Burtersett, Baroness Meacher, Stephen Timms MP, Baron Young of Norwood Green.
SPEAKERS
- CITIZENS ADVICE
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.
The impact COVID-19 on Citizens Advice services
- From the 9 March – 9 April Citizens Advice’s website had 8 million pageviews.
- ‘Coronavirus’ was the most searched word on their website, followed by people looking for information on UC.
- Enquiries about UC to Citizens Advice spiked in mid-March, which was mirrored by the numbers of people applying for the benefit through the DWP.
- Citizens Advice have seen a 35% increase in people coming to them for help with their initial claim, compared to the same period 6 months ago.
Key findings
- Claimants are struggling with applying for benefits due to digital issues exacerbated by lockdown.
- Claimants are contacting Citizens Advice unclear what benefits they are eligible for.
- Some ‘vulnerable’ groups are being disproportionally impacted, such as those with no recourse to public funds (NRPF), disabled people and younger adults.
- Claimants on legacy benefits are facing increased costs and are now unsure whether to move onto UC because of the recent uplift, or remain on legacy benefits until ‘managed migration’ and receive the possible transitional protections it will bring.
- There may be delays to challenging decisions due to the re-deployment of DWP staff to process new claims. This may leave some claimants without the benefits they are entitled to for an extended period, when they need it the most.
- Claimants newly claiming UC as a result of the outbreak, are experiencing the impact of the two-child limit, benefit cap and five week wait.
Recommendations
- Suspend NRPF rules to ensure everyone who needs it can access benefits.
- Suspend the benefits cap to ensure people can access adequate levels of financial support during this period and beyond.
- Turn advance payments into non repayable grants to ensure people get the support they need to get through the five week wait.
- Mirror investment in UC and Working Tax Credits in other legacy benefits.
Further details can be found in Citizens Advice’s new briefing.
- NACCOM NETWORK
NACCOM is the No-Accommodation Network. They have 112 members across the UK who work to prevent homelessness and destitution amongst people who are asylum seekers, refugees and others without recourse to public funds. 63 of their member organisations provide accommodation through hosting, housing projects and night shelters to people who would otherwise be street homeless.
Key findings
COVID-19 has exacerbated existing challenges that people who are new refugees faced pre-pandemic.
- There is a lack of understanding of eligibility and of the process in making a successful application for UC. New refugees need help from support agencies to make successful applications.
- Advance payment loans are unfairly penalising those who have previously lived on £37 per week, who have no savings or support networks.
- New refugees are having difficulties and delays in successfully opening a bank account – a lack of proof of address can be a major issue here.
- People with disabilities or communication challenges, those without access to savings or family support, and those with low IT literacy or without access to IT are being hardest hit by the five week wait. People who are refugees are likely to have 1 or more of the above, in addition to limited English literacy and mental health needs.
- Pre-pandemic, there was a minimum of a 7-day destitution gap, as Home Office support ends at 28-days, whilst UC cannot be paid until at least 35-days after application. This continues to push people into destitution during the outbreak.
- Voluntary sector organisations that new refugees previously relied upon to support them to apply for UC have closed. Often, they do not have access to internet in their asylum accommodation and cannot access libraries or community spaces to make online applications.
- Currently, many of NACCOM members can only be ‘reactive’. They rely on new refugees knowing about them and having phone credit and battery in order to be able to contact them for advocacy. NACCOM members have been reporting that they are no longer able to support the ‘most vulnerable’ people.
Positive policy changes in response to COVID-19
During the outbreak, people who have been granted refugee status will not be evicted from Home Office accommodation for at least three months and will be able to start a claim for UC whilst accommodated. This means that when the time comes for people to move, they are already set up with benefit payments. This change will need to be adapted post outbreak, but NACCOM are calling for it to remain as it shows that there is an alternative to the destitution gap.
Recommendations
- Advance payment loans should be available as a grant. This would reduce the 35-day wait and would mean that new refugees and others are not penalised through repayments.
- There should be the option for the first payment of UC to be made directly to the persons ‘ASPEN’ card- the card that Home Office support is paid to when someone is waiting for a decision on their asylum application. This is an essential change during lockdown as people are struggling to open banks due to closures, an inability to travel on public transport and for those shielding.
- The ‘move-on’ period for people who are new refugees should be extended until the first payment of UC is made and the person has a positive housing option confirmed.
- NRPF conditions should be lifted, enabling everyone should be able to access public funds and services. This would protect individuals during the pandemic as well as wider public health.
- THE CHILDREN’S SOCIETY
The Children’s Society supports change to young people’s lives at an individual level through its direct programmes of work. It also aims to affect systemic change by influencing legislation and government practice, and to affect a positive shift in public attitudes towards children and young people.
Key findings
Accessibility
- Closures of Jobcentres have shown how UC relies on face to face help and support.
- A complex needs team is required in DWP staffing to ensure ‘vulnerable’ claimants do not fall through gaps in the system.
- At the start of the outbreak claimants were struggling to verify their identity, with long delays online and on the helpline. The announcement made on 16 April that claimants could use existing gov.uk accounts has helped ease this.
- The DWP needs to improve ID verification and focus on those who need offline help.
- Claims should also be backdated from when a claimant requests a claim, not when it is made.
Transitioning onto Universal Credit
- Some claimants who have lost their jobs as a result of the outbreak and apply for UC, have found earnings from their previous employer are counted in their assessment period, substantially reducing their award.
- Where this reduces a claimant’s award to nil, it can end up extending their wait for UC beyond five weeks.
Legacy Benefits
- New claimants are confused about what they are entitled to and how much they will get. What they finally receive can often be a quite a shock, as it is a substantial drop in their income.
- New claimants who request a UC advance are also finding the condition to repay advance payments a surprise.
Recommendations
- Automatic back dating of UC payments to when a claimant first requested their claim.
- Increasing the capacity for DWP staff to help and support claimants with complex needs.
- UC should count the date a claimant leaves their job, rather than when they receive their final pay so it does not reduce their entitlement, or leaving them with nothing.
- Advance payments should be non-repayable grants, especially for ‘vulnerable’ groups. These could be based on the DWP’s own criteria of ‘vulnerability’.
- CHILD POVERTY ACTION GROUP (CPAG)
About Child Poverty Action Group
Child Poverty Action Group (CPAG) works on behalf of the one in four children in the UK growing up in poverty. CPAG develop and campaign for policy solutions to end child poverty. They also provide information, training and advice to the people who work with hard-up families, to make sure they get the financial support they need and carry out high profile legal work to establish and confirm families’ rights.
Key findings
The pandemic confirms what we have always known about social security but is frequently forgotten – benefit claimants are not a static group of people – life is unpredictable and any one of us may need to claim benefits at any time.
Additional costs
- Families are struggling with additional costs of raising children. This is due to school closures, with children at home for extended periods and parents impacted by job losses, reductions in hours and pay.
- Standard Life Foundation that found that of those households that are facing serious financial difficulty, families with children are disproportionately represented. (40% of households in serious financial difficulty are families with children, compared to 25% of all households in the UK).
- Despite positive steps by government there have been few announcements to provide additional support for families with children other than the voucher scheme which is not working in many areas of the country – despite facing additional costs. Nor has there been any increase in child benefits.
Benefit cap
- The DWP have indicated that they think a small number of households would be affected by the benefit cap.
- CPAG’s early modelling suggests otherwise. However, more government data needs to be published for CPAG to accurately model these figures.
- As of November 2019, 76,000 households were capped.
- CPAG modelling estimates that there will be a rise of at least 50% of the number of households capped. The main reasons for this are:
- Increases in UC standard allowance and Local Housing Allowance uprating, is pushing families already on benefits who were already close to the cap – to now being capped. CPAG modelling estimates that 12,500 families will be affected by the benefit cap, as a result of UC standard allowance uprating.
- Families previously on benefits are now not working enough, they may have lost a job or hours as a result of COVID-19. Lots will benefit from the nine month grace period from the benefit cap, but not all.
- New claimant families who are now claiming UC as a result of the outbreak, will be capped. CPAG’s estimates that of this new cohort of claimants 10,000 families will be capped.
Two-child limit
- CPAG and The Church of England have published a report marking the three-year anniversary of the two-child limit.
- Families with three children or more, with the youngest born after April 2017 – do not get any additional financial support for that child. This is worth more than £50 a week per child.
- By April 2020, an estimated 230,000 families and 860,000 children have been affected by the two-child limit.
- CPAG estimates suggest that an additional 60,000 families will be hit by the policy as a result of COVID-19.
- In the vast majority of constituencies at least 10% of children will be affected by the policy (592 constituencies), in 60 constituencies at least 25% of children are affected rising to 40% in some areas of the country.
Recommendations
- The benefit cap needs to be addressed – families are not receiving the recent uplifts in benefits because of the cap.
- There needs to be help for children. CPAG are The Children’s Society are calling for a £10 increase in Child Benefit.
- The two-child limit must be lifted.
CPAG are publishing weekly briefings on families’ income during the pandemic.
- UC:US
About UC:Us
UC:Us is a group of Universal Credit recipients based in Northern Ireland, representing a wide range of family circumstances and claimant groups. Led by Ruth Patrick (University of York) and Mark Simpson (Ulster University) the claimants have been part of a participatory study of the experiences of early UC claimants in Northern Ireland, where the benefit was first introduced in late 2017.
Key findings
Ruth Patrick introduced UC:Us, outlining the history of the group as part of a participatory study of the experiences of UC claimants in Northern Ireland.
The APPG heard from two claimants based in Northern Ireland about their experience of living on UC during the outbreak:
- They spoke about struggling with increased food costs because they were unable to shop around at bigger stores, or online. Instead they are relying on smaller corner shops with significant mark ups.
- They can no longer rely on friends or family to cook meals because of social distancing, which usually relieves some of the costs of food.
- Utility bills have increased, as their children are at home for extended periods.
- A claimant described UC as a ‘domino affect’ pushing people into a cycle of debt, which leads to mental health issues.
Mark Simpson outlined the main issues with UC encountered in the study:
- Claimants struggled to make their initial claim.
- Claimants were unable to access a staff member to help with their application.
- Claimants did not always have the digital literacy or access needed to make an application.
- Claimants were experiencing debt from the very start of their claim.
- Claimants may not have taken a UC advance, but UC:Us found that participants were taking out other loans or borrowing and getting into debt, in order to help them through the five week wait. With only 70,000 advance payments made to claimants from the 1.8million who have made a claim during the outbreak so far, some may similarly be borrowing from elsewhere.
Recommendations
- Remove the five-week wait.
