Thank you for contacting me about Universal Credit (UC) and financial hardship.
There are many reasons why people use food banks; insofar as some UC claimants turn to them, the Government is determined to ensure that the right lessons are learned from claimants' experiences and has introduced a range of measures to tackle hardship.
I am committed to having a strong safety net where people need it. That is why the Department for Work and Pensions has committed to a test and learn approach to delivering UC and has made improvements where necessary, such as through removing seven waiting days and introducing 100 per cent advances. Since 2016, almost £10 billion has been injected into UC, and UC will be £2 billion more generous than the legacy system when fully rolled out.
All UC claimants are subject to an initial assessment period, regardless of the circumstances that have led to a claim. Assessment periods allow for UC awards to be adjusted on a monthly basis, ensuring that if a claimant’s income falls, they do not have to wait several months for a rise in their UC award.
As of February 2019, 86 per cent of paid UC full service new claims were paid in full on time. When new claims are not paid on time, it is estimated that two-thirds have an outstanding verification issue, such as providing bank statements, evidence of childcare costs, or proof of rent.
The DWP recently announced that parents may be eligible to receive a Flexible Support Fund Award or a budgeting advance to enable them to take up a job offer or increase their working hours. The DWP has introduced a more flexible approach to claimants reporting childcare costs, which allows people to be reimbursed for childcare even if they are not able to provide immediate evidence. Claimants can now be reimbursed for costs reported in the Assessment Period in which they were paid, or in the following Assessment Period.
UC has been designed with accessibility in mind. Where a claimant requires assistance to complete the initial application process, support is available via the Universal Credit helpline, face to face in the Jobcentre or in exceptional circumstances through a home visit. If a claimant needs more intensive or specific support to make their claim, face-to-face and other help is available through the Universal Support Assisted Digital Service.
I also welcome advance payments which are worth up to 100 per cent of someone’s indicative award and are available from the date of their claim. Around 60 per cent of eligible new claims to UC received an advance in October 2018. This shows that people are being made aware of advances and are getting help when they need it. I would add that if a claimant is in financial difficulty as a result of the level of deductions being made, they can request that a reduction be considered.
Claimants may also be entitled to a two week Universal Credit Transitional Housing Payment. Claimants on the income-related elements of Jobseeker’s Allowance and Employment and Support Allowance, and Income Support will also receive an additional payment providing a fortnight’s worth of support during their transition to UC. This will be effective from July 2020, and benefit around 1.1 million claimants.
Personal Budgeting Support (PBS) is also offered to UC claimants from the outset of their claim. PBS helps claimants as they transition to UC and adapt to the financial changes that UC brings. PBS can be online, telephone or face to face support. Face to face support is currently delivered through local authorities via Universal Support.
I do realise that, despite the actions detailed above, some people can fall into problem debt. That is why I support the implementation of the Breathing Space Scheme – a 60 day period of protection for people in problem debt, to engage with debt advice and find a sustainable, long-lasting plan to solve their debt problems.
I hope this helps to clarify the support available to people claiming UC when they struggle with financial difficulty, and I will continue to support improvements when necessary.
Thank you again for taking the time to contact me.
Craig Whittaker MP