The Low Incomes Tax Reform Group (LITRG) has cautiously welcomed the Government’s response to the recommendations made by the Social Security Advisory Committee (SSAC) on moving claimants to Universal Credit from tax credits and other working age benefits. However, a number of concerns remain and LITRG calls on the Government to stop existing benefit claimants moving across to Universal Credit until the migration process is more fully developed and all claimants can be given transitional protection.
In June, the SSAC launched a public consultation on proposals for moving existing claimants of working age benefits to Universal Credit. The roll-out of Universal Credit will be complete by December 2018 which means that most people cannot make brand new claims for some current benefits1 such as tax credits. However, the next stage requires the move of existing benefit claimants across to Universal Credit. This is called the ‘managed migration’ process and will involve millions of claimants. It is expected that this process will be complete by December 2023.
The Government has made a commitment that ‘anyone who is moved to Universal Credit without a change of circumstances will not lose out in cash terms’. This will be done by providing transitional protection to top-up Universal Credit to the level of previous benefits in cases where the award would be lower. However, people who move to Universal Credit naturally2 in the meantime will not qualify for this protection and in some cases will get less benefit under Universal Credit.
LITRG Chair Anne Fairpo said:
"Given the importance and sheer magnitude of the migration process, it is disappointing that the Department for Work and Pensions (DWP) did not carry out its own consultation on the different options available for the migration process.
"In our submission to the SSAC consultation we expressed concern that the Government’s original plans were too ambitious and that so much reliance on the test and learn approach was not appropriate where weaknesses in the process could have serious financial impacts on claimants.
"We agree with the SSAC – that the migration process should, as far as is possible, minimise the risk to claimants. There were a number of points in the original proposals where the risk of people falling into financial hardship was high. We particularly welcome the confirmation that claimants will now have a minimum of three months to make their Universal Credit claim, that a previous defective claim will not result in the loss of transitional protection and that those who miss the deadline will have one month to submit their Universal Credit claim without having to show any reason for missing the deadline.
"We remain concerned that a lot of detail about the process remains unknown and will continue to be developed through a test and learn approach with real claimants, albeit in much smaller numbers than originally envisaged. It is crucial that processes reduce risk to claimants as much as possible and provide as many safeguards as possible – especially for the most vulnerable claimants."
LITRG is pleased that the Government has made a clear commitment to work closely with stakeholders and encourage them to take notice of those experts throughout the migration so that DWP can react swiftly and sympathetically when issues and recommendations are brought to their attention.
Anne Fairpo said:
"We previously recommended that the DWP should delay the testing start date and we are pleased that this has been agreed. However, the result of this is that more claimants will naturally migrate to Universal Credit and, in some cases, will be entitled to less money than under the existing system. They will not be entitled to transitional protection. We therefore call on the Government to delay natural migration until existing benefit claimants are able to qualify for transitional protection."
- Universal Credit is replacing Child Tax Credit, Working Tax Credit, Income Support, Income-based Jobseeker’s Allowance and Income-related Employment and Support Allowance.
- This can happen for a number of reasons. for example certain changes in circumstances or the need to make a new claim for a benefit that Universal Credit has already replaced.
- SSAC report/Gov response on GOV.UK.
- LITRG submission to SSAC on the LITRG website.