LITRG concerns mentioned in universal credit report

26 Jul 2019

‘Natural migration’ is trapping benefit claimants in the DWP ‘lobster pot’, struggling with a sudden drop in income and with no way back, says the Work and Pensions Committee as it published its latest report on universal credit this week (23).

Understanding when existing benefit claimants will need to naturally migrate to UC is so complex, it baffles even experienced benefit advisers, says the report. The Committee is calling on the DWP to work with stakeholders to develop clear and comprehensive guidance. The Committee has repeatedly asked, and asks again with this report, for the Department to provide a complete list of the ‘changes of circumstance’ which will trigger ‘natural migration’.

There are a number of references to the evidence of the Low Incomes Tax Reform Group (LITRG) in the report, such as where the group drew attention to the unfairness that the rules on moving home create. If a claimant moves outside of their local authority they must make a new claim to UC to get help with their housing costs, whereas if they move within the same local authority they can remain on legacy benefits. LITRG said there does not seem to be ‘any sound rationale’ for this distinction. And LITRG said that the information on the main UC page on GOV.UK could be misleading. LITRG added that the DWP’s website is ‘difficult to follow’ and that working out which changes would trigger a move to UC would be complex and require a person to have a good understanding of the existing benefit system and to follow a trail of pages across GOV.UK and then be able to put the information together to answer their questions. LITRG said that it had seen an increase in advice calls from claimants who had prematurely signed up for UC without being aware of the detrimental impact it would have on their lives.

The committee’s recommendations include:DWP should make an ongoing payment to meet any shortfall in income for households that lose out compared to the legacy system as a result of moving home outside of their local authority

DWP should make an ongoing payment to meet any shortfall in income for households with any level of disability who lose out when they move to UC DWP should allow people on legacy benefits to remain on legacy benefits for a grace period of one year after the death of their partner DWP should look at practical options to eliminate the five-week wait Better communication to claimants about natural migration Full compensation to all claimants who have lost out financially because they have moved to UC prematurely, despite their circumstances remaining the same

The full report can be found here.

House of Commons – Statement on Universal Credit: Managed Migration – 22 July 2019

Rudd announces pilot for UC managed migration

The Government wants to transfer people from the existing benefits or tax credits onto Universal Credit. This process is known as managed migration. This week Secretary of State for Work and Pensions Amber Rudd lay regulations to commence a pilot in Harrogate, for no more than 10,000 claimants, which will start this month (there is a possibility that the pilot will be extended to further sites soon after). Claimants who are moved to universal credit will be eligible for transitional financial protection and have access to additional financial support before they receive their first universal credit payment.

The Government has revised its approach to claimants who are entitled to the severe disability premium, offering backdated payments covering the time that has elapsed since their move and gain access to ongoing transitional payments, she said. Until 2021, anyone who currently receives the premium and whose circumstances change will continue to be held on legacy benefits, as they are now. After 2021, the barrier will be removed. The DWP will review effectiveness of universal credit sanctions in helping people into work in order to report to the Select Committee in the autumn, she said.

Labour responses

Labour spokesperson Margaret Greenwood said it would be an ‘absolute disgrace’ if the regulations laid by Rudd this week are not debated in Parliament. The role of any pilot is to justify the whole, yet we know the flaws in universal credit are causing real hardship, she said. Rudd replied that the Government is proceeding by negative resolution to get support for this measure because that was the advice we received from the Joint Committee on Statutory Instruments.

Debbie Abrahams pointed out that 240 children a year die as a direct consequence of being pushed into poverty and, ultimately, because of the cuts in social security support. Carolyn Harris said individuals with a disability premium on their employment and support allowance are still eligible for housing benefit because universal credit does not cater for cases that are out of the ordinary. Since migration, however, many people are not receiving payments because local authorities are not providing the correct information or recognising the special circumstances of such claims. Ruth George welcome that DWP will not stop the benefits of anyone participating in the pilot. However, she notes that in Harrogate, 56 per cent of the people involved were already on universal credit in February, and fewer than 2,000 are due to migrate using the process. That is far less than the rest of the country, where there is an average 27 per cent roll-out. Stephen Timms called for a thorough assessment of the impact of the five-week delay as part of the pilot’s evaluation.

Other responses

SNP MP Chris Stephens highlighted that the regulations will be laid by the negative resolution procedure despite Rudd’s predecessor committing to allowing the House to debate the new regulations. Rudd accepted that a move in future from the pilot to the full managed migration is likely to need much fuller debate. Alan Brown (also SNP) asked Rudd to look at the system that encourages claimants to take out a new enterprise allowance to go into business, but one year down the line, when they might still be building up that business, the system assumes that they are earning a minimum amount. Rudd retorted that the new enterprise allowance has been a great success and the balance is about right.

Independent Frank Field called for Rudd to publish the criteria by which she will judge whether the pilot is a success, before the pilot is completed. Rudd declined to say, but did add that success is if ‘we get as many people as we expect across from the legacy benefits to universal credit as effectively and efficiently as possible’.

The full session can be read here.