Universal credit: early warnings

Issue 249 (Dec 2015)

Kirsty McKechnie reports on what is emerging about the experience of universal credit through CPAG in Scotland’s Early Warning System.

CPAG in Scotland’s Early Warning System is a framework which has been developed by Child Poverty Action Group in Scotland to collect and analyse case evidence about how welfare changes are affecting the wellbeing of children, their families and the communities and services that support them. Since its start in January 2014 and the end of October 2015, we had gathered over 1,800 cases, and in the last few months we have started gathering case studies about universal credit. So what are we seeing?

Confusion

The majority of the case studies have an overarching theme: confusion. First of all, confusion about who can actually claim universal credit (UC). As it is rolled out, the DWP is starting with the simplest claims, first from single jobseekers, although this is extended to couples and some families with children in some areas – eg, Inverness and several areas in north-west England. To identify the simplest claims, a number of ‘gateway conditions’ have been introduced.

We have received a number of cases regarding people who have been misadvised about whether they meet gateway conditions, and in some cases have received conflicting information from their local jobcentre and the Benefit Delivery Centre. This has led to some clients slipping through the gateway when they should not have done.

Anecdotally, we are hearing that some local authorities have provided the DWP with a list of their temporary accommodation in an attempt to prevent any more homeless clients who are excluded by the gateway from slipping through.

As well as the gateway conditions, there is also confusion about when UC or a contributory benefit should be claimed. One client, who it would appear should have been entitled to contribution-based jobseeker’s allowance (JSA), was told that he must claim UC. He mistakenly failed to include his partner in the claim because the form asked if he wanted to claim for anyone else – he did not, as his partner is working. Realising the client’s mistake, his adviser wrote to the DWP, who confirmed receipt of the letter, agreed that the claim should be closed and that he should claim contribution-based JSA, but it could not confirm when it would be dealt with or by whom.

Confusion is leading to people being given conflicting or inaccurate information. For example:

  • One advice agency received conflicting information about whether an advance payment of UC must be requested within 21 days of the original claim for UC. There is no legal time limit, but the DWP's internal advice on advances used to state a 21-day limit. However, at the time of the case, this had been changed: an advance can now be requested at any time during the first assessment period, but it will not be considered if made with three days before the assessment period ends.1
  • A client in receipt of UC who was pregnant and about to move in with her partner was told by the jobcentre that she would be moved to a different benefit when she was 20 weeks pregnant. However, there is no benefit that starts at this stage of pregnancy and, with only a small number of exceptions, once you are receiving UC you remain on UC.

Financial difficulties

As expected, the monthly assessment periods and delays in receiving the first payment of UC are causing issues for some clients.

  • In one case, the client claimed UC the day after she finished work. Her first payment was reduced to take account of the last wages she received during that assessment period, so her first payment was £135 less than her monthly rent and gave her nothing to live on until the next payment.
  • In another case, a private tenant moved into supported accommodation 20 days into the monthly assessment period. Housing benefit started to pay the rent for his supported accommodation from the date the client moved in, but his UC housing costs ceased to be paid from the start of the monthly assessment period rather than the date he moved out, leaving him with 20 days where he received no financial contribution to the rent in his private tenancy. He lost his deposit as a result.
  • In a third case, the client claimed UC but started full-time education the day before his first assessment period was due to end and was no longer entitled to UC. Because the change of circumstances took place during the monthly assessment period, he was not entitled to any UC at all.

Sanctions

Universal credit introduces ‘in-work conditionality’, where people who are earning less than 35 times the minimum hourly wage a week may be required to increase their hours or look for additional work. The DWP confirmed that it has been trialling variations of this, and we have two cases of people who are working and in receipt of UC who have been sanctioned.

We have heard of a number of cases where third-party deductions are causing rent arrears during sanction periods. Clients who have had 100 per cent of their personal allowance sanctioned are continuing to have third-party deductions taken from their award, reducing their housing element. Ironically, in some cases the third-party deductions have been for rent arrears, creating the position where a tenant is reducing her/his rent arrears and accruing them at the same time.

Discretionary housing payments

Worryingly, some local authorities do not seem to be up to speed with the roll-out of UC. In three local authority areas, claimants were mistakenly advised that they must be in receipt of housing benefit (rather than UC or housing benefit) in order to qualify for discretionary housing payments (DHPs). Their websites and DHP application forms make no mention of UC either.

Hopefully, some of these ‘teething problems’ will be ironed out. But as UC rolls out further, we anticipate collecting more cases in relation to monthly assessments/payments and sanctions for those in work.

For more information about the Early Warning System, or if you are based in Scotland and would be interested in submitting case studies, please contact kmckechnie@cpagscotland.org.uk. You can also order CPAG’s new universal credit handbook from the CPAG website.

 


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  • 1. DWP internal guidance: Universal Credit Benefit Advance, July 2015