Universal Credit: Various Issues

Thank you for contacting me about Universal Credit.

Universal Credit is a major reform that will transform the welfare state in Britain. At the heart of UC is a belief that work should always pay. Under the new system, benefit will be withdrawn gradually as claimants start work or increase their earnings, meaning their total income always goes up.

I firmly believe that UC is a fair benefit that protects vulnerable claimants. As UC is a simpler, more accurate benefit based on up-to-date information, it 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 £110 a month through UC, because their award is higher through UC than legacy benefits.

UC will help 200,000 more people into work when fully rolled out, and empower people to work an extra 113 million hours a year. You might be interested to know that people on UC spend around 50 per cent more time looking for a job than they did under Jobseeker’s Allowance. Since 2010, we have seen over 3.3 million people move into work, which is on average 1,000 people each and every day. And youth unemployment has plummeted by over 50 per cent.

In Yorkshire and the Humber, according to the latest figures from the Official for National Statistics, 2,586,129 people (74.1 per cent) are employed while 121,022 people (4.5 per cent) are unemployed. Between March and June 2018, the largest increase in workforce jobs in the UK was in Yorkshire and the Humber at 36,000. The number of children in workless households fell to 124,415 (12.7 per cent). Clearly, there is more to do to enable people to work and be independent but the direction of travel is encouraging.

Rightly for a programme of this scale, the priority continues to be its safe and secure delivery. The controlled expansion of Universal Credit started in April 2013 and I am pleased that significant progress has been made to date. Universal Credit is now available for single claimants in every jobcentre in the country.

Figures have shown that people claiming Universal Credit are 13 per cent more likely to be in work than people claiming Jobseeker’s Allowance, earning more money and more willing to take a job. I am glad that 83 per cent of UC claimants are satisfied with the service they receive.

MANAGED MIGRATION

The “managed migration” Regulations provide transitional protections for claimants moving from legacy benefits to UC, including support for 500,000 receiving Severe Disability Premium. There will be deliberate flexibility and safeguards built into the process to ensure that vulnerable claimants and those with complex needs are supported throughout. This helps to mitigate a key concern of managed migration, that is, the ability of vulnerable claimants to make a successful claim to UC. Flexibility includes the ability to extend or cancel the date for migration if there is a good reason to do so and to backdate payment should the claimant meet prescribed criteria for not being able to migrate on the date specified by the Department.

CHILDCARE COSTS

The level of support for childcare costs within UC has increased from 70 per cent to 85 per cent, meaning a working family with 2 children can now receive up to £13,000 a year. This support is available to lone parents who are in paid work regardless of the number of hours they work. This helps ensure families with children are not disadvantaged when seeking work or looking to progress in their career, perhaps by taking on more hours. This is part of a wider package of increased childcare provision. This includes an extra 15 hours of free childcare available to working parents of 3 and 4 year olds since September 2017, and the gradual introduction of Tax-Free Childcare for working parents of children aged up to 12 and disabled children aged up to 17.

TWO CHILD LIMIT

From April 2017, new Child Tax Credit claims have been limited to the first two children. It is important to support families, but it is also important to be fair to the many working families who do not see their budgets rise when they have more children. This does not apply to Child Benefit. Benefits have also been capped so that no household can receive more in out-of–work benefits than the average working family earns.

WORK ALLOWANCES

While it has been necessary to reform the system of ‘work allowances’ in UC, it is important to see this as part of a wider package of measures which together are designed to move us towards a lower welfare, lower tax, higher wage economy. The introduction of the National Living Wage (NLW) is delivering a pay rise for millions of low paid workers, and people are keeping more of what they earn due to increases in their income tax personal allowance. This will benefit over 2 million workers. In total, earnings for a full-time worker on the National Minimum Wage will have increased by over £2,000 a year since the introduction of the NLW in April 2016.

IN-WORK PROGRESSION

UC will help 200,000 more people into work when fully rolled out, and empower people to work an extra 113 million hours a year. As part of this, the Department for Work and Pensions has trialled an in-work service, led by Jobcentre Plus. DWP intends to build on this trial, and the Autumn Budget 2017 committed £8 million over four years from 2018/19 to further develop the evidence base. DWP will also be working in partnership with organisations both inside and outside government to develop evidence about what works to help people earn more and progress in work.

HOUSING BENEFIT

From April 2018, claimants already on Housing Benefit will continue to receive their award for the first two weeks of their UC claim. The Government has also promised to make it easier for claimants to request the housing element of their award paid directly to their landlord.

HOUSING BENEFIT FOR 18 TO 21 YEAR OLDS

I am glad that 18 to 21-year-olds will be entitled to claim support for housing costs within Universal Credit. Alongside the Youth Obligation, this change will mean young people get comprehensive and intensive work-focussed support, whether they are ‘learning’ or ‘earning’ as they set off into adulthood. This change means that there are no barriers to young people accessing housing because of their age and is in line with the Homelessness Reduction Act, and the Government’s commitment to eradicate rough sleeping by 2027.

HOUSING BENEFIT PAID TO LANDLORDS

Universal Credit is paid direct to claimants, including those renting in the social sector, and I think it is right to give individuals that responsibility for managing their own finances. People have the opportunity to discuss any concerns about how they will manage their finances with their work coach at the start of their claim through Personal Budgeting Support. Money advice can be offered online, by phone, or face to face, and claimants can be signposted to appropriate third party services. Alternative Payment Arrangements can also be put in place in some circumstances, to allow payments to be made more regularly, to split payments between partners, or to pay the housing element of Universal Credit directly to the landlord.

UNIVERSAL CREDIT HELPLINE

I am delighted that all Department for Work and Pensions customer phone services, including UC, are now Freephone numbers. UC is a major reform that will transform the welfare state that ensures it always pays to work. The vast majority of claims are made online, around 99 per cent, and customers can use their online account using free Wi-Fi and computers in all Jobcentres in the country.

UNIVERSAL SUPPORT

According to the Universal Credit Service Claimant Survey, 98 per cent of claims are made online and nearly half of people had help from others or from their Jobcentre advisers. I realise that there are people who still struggle which is why £200 million has been invested in Universal Support, which will delivered by the independent charity Citizens Advice from April 2019, to help people smoothly move on to Universal Credit. All Jobcentres across the UK have free Wi-Fi and there are more than 8,000 computers available to support customers with making their claim online. If someone cannot get online then I am glad to say that there is a Freephone number for the UC helpline.

I hope this explains why I strongly support this important reform. Thank you again for taking the time to contact me.

Craig Whittaker MP

October 2018