Universal Credit

Bedford Benefits Network05/03/2015

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Universal Credit - it’s all about work

• Universal Credit aims to reward work. No 16 hour rule and no limits on the number of hours someone can work. Universal Credit payment only reduces gradually as take home pay increases so claimants won’t lose all their benefits at once if they are on a low income

• Universal Credit will encourage a new type of relationship with claimants. Work Coaches will help claimants to become more independent by supporting them in their worksearch and budgeting support activities. They will help claimants plan and focus their jobsearch as well as set them actions that give them the best chance of finding work

• Universal Credit aims to support jobseekers through the Claimant Commitment to raise their expectations of what they can achieve, and to encourage responsibility. Those who are fit and ready for work will be expected to look for a job on a full time basis dependent on circumstances

• Universal Credit claimants are expected to use Universal Jobmatch, an intelligent job matching service that helps employers to get the best fit for the jobs that they have on offer

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Delivering the policy - how Universal Credit is rolling out to eligible claimants

• Universal Credit rollout began on 29 April 2013 in Ashton-under-Lyne in Greater Manchester

• From 30 June 2014, we began taking new claims for Universal Credit from couples

• From 24 November 2014, we began to expand Universal Credit to families

• From February 2015, Universal Credit will roll out in all jobcentres and local authorities for new claims from single people who would otherwise have been eligible for Jobseeker’s Allowance, including those with existing Housing Benefit and Working Tax Credit claims

• This will ensure Universal Credit is established across Great Britain with new claims to legacy benefits closed from 2016 – with migration to follow thereafter

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Universal Credit

Delivering the policy

Digital Jobcentres

In-Work Progression Pilots

Universal Credit Service

Claimant Commitment

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• Better financial incentives - 65 per cent of people finding Universal Credit a better financial incentive to work

• Doing more to find a job - households on Universal Credit do more to find work – nearly double the number of hours of job search compared to Jobseekers Allowance

• More support to find work - 92 per cent of claimants agreed they were encouraged to find work, or increase the amount they were working

• Working more - those who are on Universal Credit report that they are working more over a six-month period - 69 per cent under Universal Credit, compared with 65 per cent under Jobseeker’s Allowance

• Easier to understand - people find Universal Credit easier to understand

• Better reward for additional work – people consider Universal Credit a better reward for additional work

Universal Credit is working

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UC and Family

• It will do this by making work pay, even if it’s just for a few hours a week, providing the right incentives and support to meet a parent’s needs AND combining in and out of work benefits

• Universal Credit payments will be made monthly to a household and can include:– A child element – A disabled child element to Universal Credit helps with the extra costs of

bringing up a disabled child– The childcare element helps pay for registered childcare while someone is

working• A claimant will also still be able to receive the following benefits whilst claiming

Universal Credit:– Child Benefit – Child Maintenance– Free School Meals and milk (if eligible)

• If a claimant is a lone parent, or the nominated responsible carer in a couple, with a child between the age of one and five they won’t be asked to work in return for their Universal Credit but they may be expected to attend a work focused interview and discuss actions they may take to prepare for their return to work in the future

Universal Credit will support families as they find work, increase their earnings and move towards financial independence

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That means:

– If a claimant is able to work they will get the right service and help to reach their goals

– If a claimant is in work they will be able to keep more of what they earn so they’re better off for every additional hour work, whether in a full or part-time job

– If a claimant can’t work they will still get the support they need• Applications for Universal Credit will be made online. Extra support will be

available to help someone do this and in some circumstances a claimant or their carer will be able to claim over the phone

UC and Disability or Health ConditionUniversal Credit provides claimants who have a disability or health condition

with financial and back-to-work support to meet their needs.

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• That’s because Universal Credit makes it easier for a claimant to start a new job or work more hours as:

– There is no 16 hour rule and no limits on the number of hours someone can work

– Someone’s Universal Credit payment only reduces gradually as their take home pay increases so they won’t lose all their benefits at once if they are on a low income

– An additional £200 million is being invested into childcare support, on top of £2 billion already spent under the current system – paying up to 70% of childcare costs for anyone in work

• To help claimants meet the terms of their Claimant Commitment a Universal Credit work coach will give them extra help with their jobsearch including:

– Universal Jobmatch– Youth Contract– Work Programme– National Careers Service Apprenticeships – Access to Work– Government funded skills training– New Enterprise Allowance– Work Choice

UC and Work

Universal Credit aims to make sure claimants are better off in work than on benefits

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UC and employers

• Universal Credit provides employers with a more flexible workforce – removing the 16 hour rule makes it easier for claimant employees to move in and out of work and increase their hours, so employers will find it easier to fill temporary vacancies and access a wider pool of applicants

• Universal Credit is an in and out of work benefit, so over time existing employees who have been claiming Tax Credits will move over to claim Universal Credit

• Universal Credit payments are linked to how much an employed claimant has earned. This information is captured through the new Pay as You Earn (PAYE) reporting in real time to HMRC. This reduces employer administrative burdens and simplifies reporting for starters and leavers

• Accurate reporting of employees’ PAYE information on time will be key to a smooth process for the employee so that the correct Universal Credit payment can be made on time too

Universal Credit boosts business as employees can work any hours a business needs without losing their benefit if they are on a low income

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Claimant Commitment

Claimant Commitment

Individually tailored to take account of someone’s circumstances

Outlines what a claimant must do in return for their benefit

Sets out clearly the consequences of not meeting Claimant Commitment

Claimant Commitment reviewed on a regular basis

Work

Claimant

Work Coach

Claimant

Create Accept Work Requirements

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Universal Credit helps people be better off in work than on benefits by:

• Introducing a generally more generous work allowance

• Removing the limit to the number of hours someone can work each week

• Reducing a claimant’s Universal Credit payment gradually as their earnings increase, so they won’t lose all their benefits at once if they’re on a low income

• Working families can recover 70% of their actual childcare costs, up to maximum amount

• From 2016 those paying income tax will be able to claim up to 85% of childcare costs

Better off in work

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Making Work pay

Universal Credit helps to ensure people are better off in work than on benefits by:

• Removing the limit to the number of hours someone can work each week• Reducing a claimant’s Universal Credit payment gradually as their earnings increase, so they won’t lose all their benefits at once if they’re on a low income

Universal Credit – one year on

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Claimant Journey

Seek Work

Make Claim for

Universal Credit

Provide personal

Details

Submit Claim Organise Finances

Award notification

and payment

InterviewConfirmation of

interview

Confirmation of starting work

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Local Area

Support for claimants with complex needs

BudgetingWork

OnlineHousing

Support for claimants

LA Services

National Partners

Local Partners

Jobcentre Plus

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Delivery Partnership AgreementsDWP Districts & LAs

Overarching Partnership AgreementDWP & LA Associations

Universal Support – delivered locally: Partnership arrangements

• A common Overarching Partnering Agreement , signed at the corporate level between the DWP and LA representative bodies (LGA, WLGA and COSLA) setting out a number of general terms, obligations and expectations that apply to all DWP and LA delivery partnerships; and

• A set of local level Delivery Partnerships Agreements, signed between the DWP and LAs locally, will give details of specific service providers locally

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Support for those that need it to manage the

changes Universal Credit brings.

Housing costs direct

to tenant

Single payment to household

Monthly Payment

We want to help people to manage their own finances successfully, whether they are in or out of work……

Personal Budgeting Support – Why?

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Alternative Payment

Arrangements

Moneyadvice

Financial products

Claimants managing their

money

Personal Budgeting Support - Overview

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01/01Date of Claim

+7 days

1st UC PaymentCalc/notification

to claimant:01/02

1st UC Payment

Received by Claimant:

07/02

Regular UC Assessment Period

2nd UC PaymentCalculation:

01/03

2nd UC PaymentReceived by Claimant:

07/03

An example claim

30/01 28/02

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Payment Advances: New Claims

+7 days31/01 28/02

Regular UC Assessment Period

(35 days)

1st payment:£1000

2nd payment:£1000

Standard Monthly Payment

Payment minus repayment of UC advance(new claim)

UC Advance(up to 50%)£500

£926.67 £926.67

(3 days)

Based on an indicative claim of £1000 pcm

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• Alternative Payment Arrangements (APAs) are part of the support offering for the minority of Universal Credit claimants that may struggle to manage initially and include:

• Payment of the housing costs element of Universal Credit directly to the landlord (a managed payment)

• More frequent payment of Universal Credit to help claimants that may find it difficult to budget on a monthly basis to start with

• A split payment of Universal Credit might be considered in exceptional cases e.g. financial abuse where one partner mismanages the Universal Credit award

• Wherever possible, APAs are time-limited and delivered in conjunction with appropriate budgeting support to help claimants successfully make the transition to the single monthly Universal Credit payment

• When considering an alternative payment arrangement, a series of factors are considered to help to decide if one is appropriate or not (see slide15)

• We have also introduced ‘triggers’ for claimants who repeatedly underpay their rent to review their claim and consider if a managed payment might be appropriate

Alternative Payment Arrangements

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Tier One factors – Highly likely / probable need for alternative payment arrangements

Drug / alcohol and / or other addiction problems e.g. gambling

Learning difficulties including problems with literacy and/or numeracy

Severe / multiple debt problems

In Temporary and / or Supported accommodation

Homeless

Domestic violence / abuse

Mental Health Condition

Currently in rent arrears / threat of eviction / repossession

Claimant is young either a 16/17 year old and / or a Care leaver

Families with multiple and complex needs

Tier Two factors - Less likely / possible need for alternative payment arrangements

No bank account

Third party deductions in place (e.g. for fines, utility arrears etc)

Claimant is a Refugee / asylum seeker

History of rent arrears

Previously homeless and / or in supported accommodation

Other disability (e.g. physical disability, sensory impairment etc)

Claimant has just left prison

Claimant has just left hospital

Recently bereaved

Language skills (e.g. English not spoken as the ‘first language’).

Ex Service personnel

NEETs - Not in Education, Employment or Training

APA – consideration factors

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• Managed payments will be considered on a case-by-case basis and can be requested by landlords as well as claimants. They can be considered on request from:– The start of the claim; or – During the claim if the claimant has accumulated rent arrears which will put

their tenancy at risk

• We do expect landlords to continue to follow their usual rent collection practices and procedures, making every effort to manage rent payments and recovery of any rent arrears. However, if the claimant is unable or unwilling to resolve payment issues with their landlord, Universal Credit can then intervene

• When a claimant has accumulated one month's rent arrears due to persistent underpayment, we will make an early intervention, reviewing the financial support they need and making managed payments to their landlord if appropriate

• If a claimant has accrued two month's rent arrears, we will pay the Universal Credit housing element direct to the landlord and if requested take steps to recover the rent arrears through deductions from their remaining Universal Credit payment

Managed Payments to Landlords

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Universal Support – delivered locally

• Universal Support – delivered locally is the element within Universal Credit that provides support to those who need additional help in making and maintaining a claim for Universal Credit

• It is recognised that individual local needs can best be met through an integrated

and localised support service and thus reflects the partnership working between DWP, local authorities (LAs), Citizens Advice, Credit Unions, social landlords and relevant registered charities

• This is based on the principles within the Local Support Services Framework (LSSF) published February 2013 which will help DWP and local partners to plan the detail of appropriate services and delivery methods

https://www.gov.uk/government/publications/universal-credit-local-support-services-framework

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Universal Support – delivered locally

• Universal Credit Local Support Services Update and Trialling Plan published in December 2013

https://www.gov.uk/government/publications/universal-credit-local-support-services-update-and-trialling-plan

• This describes how we will work together to test different arrangements for – partnership working– financial management – the effective delivery of front line services– and other specific aspects of the LSSF

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Universal Support – delivered locallyLocal Delivery Partners: What we are hoping to achieve

The real purpose of the partnerships approach is joined up “coherent claimant journey” for claimants with complex needs, from benefits dependency to independence and,

where appropriate, work

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Who do we think may require Universal Support – delivered locally ?

Claimants with mental health issues

Geographically isolated people

Multi Agency Public Protections Agreement (MAPPA) restricted claimants

Care leavers

People with Financial Inclusion or severe debt issues

Domestic Violence victims

People with physical and/or sensory disabilities

Non EEA citizens – including refugees

Entitled 16/17 year olds

Prison leavers

People with English language limitations

Homeless people

People with addiction problems (drugs/alcohol/gambling)

People with literacy/numeracy difficulties

Claimants with learning difficulties

Those under the supervision of the Troubled Families Initiative

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Universal Support – delivered locally Trials

11 sites are currently trialling Universal Support focussing on Triage, Digital Inclusion and Financial Inclusion:

• Westminster and RB Kensington & Chelsea• Lambeth/Lewisham/Southwark• West Lincolnshire (incorporating West Lindsey, City of Lincoln, North Kesteven &

Lincolnshire)• Northumberland & South Tyneside• Argyll and Bute• Blaenau Gwent• Derby City• Islington• Carmarthenshire• Dundee City

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• We have worked particularly closely with the social rented sector supported by the National Housing Federation, enabling landlords with Universal Credit tenants to challenge and suggest improvements to the support services available

• We have introduced rent arrears triggers to help protect landlords and tenants alike

• We have conducted business tests in the North West to involve landlords more in the housing costs verification process. This means landlords will know a tenant is receiving Universal Credit and can raise any concerns they have right from the outset

• We have taken steps to improve the take up of budgeting support and make it a more personal service by including the process as part of the Work Coach role

• We have set up dedicated teams as a result of feedback to manage housing and alternative payment arrangement cases

• We are continually reviewing and tweaking our strategy to ensure we have it right as Universal Credit expands

• The NHF in their ‘Universal Credit One Year In’ commented that ‘DWP has listened to the evidence and implemented real service improvements’

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We are listening, testing and learning………

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Universal Credit pages on GOV.UK https://www.gov.uk/universal-credit

Jobcentre offices where eligible claimants can make a claim for Universal Credithttps://www.gov.uk/jobcentres-where-you-can-claim-universal-credit

The Claimant Commitment https://www.gov.uk/government/publications/universal-credit-and-your-claimant-commitment-quick-guide

The Local Support Services Frameworkhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181395/uc-local-service-support-framework.pdf

UC Local Support Services Update and Trialling Plan published in December 2013 https://www.gov.uk/government/publications/universal-credit-local-support-services-update-and-trialling-plan

Operating Guidance for PBS & APAshttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181399/personal-budgeting-support-cover-note.pdf

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181400/personal-budgeting-support-guidance.pdf

Budgeting help and support https://www.gov.uk/government/publications/budgeting-your-universal-credit-quick-guide

Useful Links

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Useful Links

The Universal Credit Personal Planner - aimed at helping financial and digital preparationhttps://secureonline.dwp.gov.uk/universal-credit-preparation/

Landlord Preparation Strategy https://www.gov.uk/government/news/universal-credit-support-boost-for-social-landlords

Money Advice Service support for Universal Credit https://www.moneyadviceservice.org.uk/en/categories/universal-credit-and-other-benefits

Money Advice Service Universal Credit video https://www.moneyadviceservice.org.uk/en/videos/get-ready-universal-credit

The Universal Credit and Rented Housing Frequently Asked Questionshttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/337964/universal-credit-and-rented-housing.pdf

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Any Questions?