Universal Credit

A number of constituents have contacted me about Universal Credit.

Universal is the biggest and most fundamental reform to the welfare state since its creation. It is a modern benefit based on the sound principles that work should always pay and those who need support receive it.

Universal Credit is a simpler, more accurate benefit based on up-to-date information, and will provide people with their full entitlement. This means that 700,000 people will receive on average an extra £285 per month which they have not received under the existing system. Around a million disabled claimants will gain on average £100 a month through Universal Credit, because their award is higher through Universal Credit than legacy benefits.

Rightly for a programme of this scale, the priority has been to ensure its safe and secure delivery. The introduction of Universal Credit has therefore been gradual, with the controlled expansion of Universal Credit starting in April 2013 so that lessons can be learnt and the system its introduction can be improved.

I understand that some of my constituents have concerns regarding transition from old to the new benefits system – and I can confirm that I have been active in lobbying Government to make essential changes to Universal Credit in order to make the system work better for claimants, their families, and the wider community, especially in the transition (or ‘migration’) from the old benefits system to Universal Credit.

For example, Ahead of last month’s Budget, I lobbied the Chancellor, along with a small group of other Conservative MPs, to raise the Universal Credit Work Allowance threshold – the level of income at which benefit support begins to reduce. Our campaign was successful, with the Chancellor doing exactly that, and committing £1.7 billion in his Budget to raise this level by £1,000. This means that 2.4 million families with children and people with disabilities on the lowest of incomes will have £630 per year more in their pockets.

Additionally, the Government introduced changes providing two additional weeks of legacy benefits for those moved onto Universal Credit, a twelve-month grace period before the Minimum Income Floor is applied, and a reduction of the normal maximum rate at which debts are deducted from UC awards, from 40 per cent to 30 per cent of Standard Allowances. In all, the Government committed an extra £4.5 billion in this year’s budget to help improve the roll-out and working of Universal Credit for claimants.

To help improve the transition for claimants, the “managed migration” Regulations provide protections for claimants, including support for 500,000 through the Severe Disability Premium, and Transitional Protection to those moved through managed migration.

The process of managed migration will be tailored to different claimants needs, and the Department for Work and Pensions (DWP) ensures high-quality of communication of this transition, through national advertising campaigns and individual communication, including face to face communication, letters, texts, telephone calls and home visits. This will start before a notification is sent to claimants to make their Universal Credit, in many cases many months before, and a notification to move to UC should be received at least three months before the claim has to be made. Protections for those moving include:

    • Unlimited flexibility for the DWP to extend this transition period;
    • Guidance for Work Coaches and case managers to identify and protect vulnerable claimants.
    • Back-dating all late claims made in the following month.

Additionally, claimants receiving Employment and Support Allowance, Jobseekers Allowance, Income Support and Housing Benefit will receive the two weeks of additional, non-repayable payment announced in the Budget 2018 and Autumn Budget 2017.

Many claimants may come to UC with final earnings to support them until their first payment, or may find work relatively quickly, but for those individuals who think they may face difficulties before their first payment, an advance payment can be requested. Advance payments of up to 100 per cent can help with managing the initial period before payments start, and are treated as a loan, with repayments automatically deducted from future Universal Credit payments. Around half of all new claimants to Universal Credit receive an advance.

Any household that needs it will be able to access a full month’s payment as an advance within five days of applying, and the repayment period will be increased to 16 months.

I was very pleased that the Chancellor confirmed, in February 2018, that he had listened to MPs’ concerns, and so removed the initial seven-day waiting period so that entitlement to Universal Credit starts on the first day of the application.

Universal Credit is proving to be a system better suited to helping people get into work and earn more money, with those on Universal Credit spending around 50 per cent more time looking for a job than they did under Jobseeker’s Allowance. Universal Credit is predicted to help 200,000 more people into work when fully rolled out.

I will continue to lobby Government to ensure that the benefits system works for claimants and the wider community, and that any issues which arise with its roll-out are solved by Government.