Response to SSAC consultation on UC migration

Disability Rights UK response to SSAC consultation on Government proposal to move claimants on 'legacy' benefits to Universal Credit

Disability Rights UK (DR UK) is led by people with lived experience across the spectrum of disability and health conditions, including mental health conditions, learning disabilities, dementia and autism.

We are a pan disability membership organisation led by disabled people seeking change. Our membership includes individual disabled people and organisations working on their behalf including disabled people led organisations.

Among our membership are over three hundred organisations that give advice directly to disabled people, particularly in respect of benefit issues. DR UK run a second-tier advice line where we assist their front-line advice workers with supportive information and advice.

Introduction: universal credit not fit for managed migration

In this submission, we detail our concerns in relation to the provisions of the Universal Credit (Transitional Provisions) (Managed Migration) Amendment Regulations 2018.

Fundamentally, no managed migration of legacy benefit claimants should begin until there has been reform in its administration.

There have been a series of damning reports on the operation and effects of universal credit that the SSAC are probably aware.

According to June 2018 research by the DWP itself - Universal Credit full service claimant survey - almost half of universal credit claimants say that they needed help in registering their claim online. Overall, more than four in ten claimants said they needed more support registering their claim for universal credit. Three in ten said they need more ongoing support with using their universal credit digital account.

The DWP research also found that it was quite common for the claim process to take more than one attempt and, even amongst those with experience of claiming other benefits, again nearly half found it more difficult to claim universal credit.

Many universal credit claimants struggle financially on claiming the benefit as it is paid monthly. However, further delay in payment has caused increasing debt problems.

For example, recent research by the National Federation of ALMOs found that a quarter of rent arrears are accrued by universal credit households even though they only make up 4% of total households. 

In addition, the Observer recently highlighted that one in three universal credit claimants are having their payments cut to cover debts:

“Figures released by the DWP under the Freedom of Information Act show that in May this year, 316,100 universal credit claims had deductions imposed on them by the government for reasons other than fraud penalties or jobcentre sanctions.

The proportion of universal credit claims hit by deductions has rocketed from one in 10 in May 2017, to one in five in December 2017, to a third in May 2018. It has risen at a time when the total number of universal credit claims has risen sharply. Nearly 40% of universal credit claimants are in paid work.

Up to 40% of a standard monthly universal credit payment can be deducted - a higher proportion than under the old benefits system.”

The National Audit Office’s June 2108 report Rolling out Universal Credit included following findings:

  • the DWP showed insufficient sensitivity towards claimants who struggle to adjust to universal credit, did not know how many claimants were having problems with the programme or had suffered hardship; and
  • one in five claimants do not receive their full payment on time.

Unsurprisingly, the NAO concluded that the DWP must ensure that operational performance and costs improve sustainably before increasing caseloads through managed migration.

The NAO also found that while the DWP had responded to operational concerns raised by external organisations, such as making changes to the wording on claims material, it had not been clear how it tracks and responds to concerns raised about the impact of its wider policy design choices.

As a result, the NAO recommended that the DWP needs to collect data on, and learn from, the experiences of claimants and third parties on how universal credit is working in practice:

“The Department needs to ensure that delivery partners’ feedback on both implementation issues and the impact on claimants is considered alongside the existing feedback from frontline staff and programme managers.

It needs to systematically collect, analyse and publish data and evidence from delivery partners and produce a shared understanding of what is happening on the ground and how it is addressing any issues raised.”

Finally, in its July 2018 research report - Making a Universal Credit claim – Citizens Advice says that significant numbers are failing to claim at their first attempt, particularly because of difficulties supplying evidence, either in order to verify their identity or to enable payments to cover extra costs such as for health conditions, housing and childcare.

Citizens Advice highlights that a quarter of claimants it advised lost more than a week's universal credit entitlement because of difficulties finishing their claims, and that, of those advised who qualified for extra costs under universal credit:

  • 48% found it difficult to provide evidence for health conditions;
  • 40% found it difficult to provide evidence for housing; and
  • 35% found it difficult to provide evidence for childcare.

Citizens Advice also highlights that while support is currently available through Universal Support - though assisted digital services and personal budgeting support - provision is inconsistent across local authority areas and almost half (45%) of claimants it advised were not aware of the support on offer but would have used it if they had known of it.

We would highlight that Citizen Advice found that those who are accessing financial support for a health condition face particularly long delays, with only 1 in 3 of those who have a limited capability for work element in their claim receiving their full payment on time. Almost half (48%) of those it spoke to said they found evidencing health conditions difficult.

In launching this consultation, the SSAC is fulfilling one its legal responsibility to consider and report upon proposals, for regulations, referred to it by the DWP.

However, the SSAC’s other legal responsibility is to give advice and assistance to the Secretary of State for Work and Pensions in connection with the discharge of their functions concerning most DWP benefits and related matters.

The DWP’s “test and learn” approach to the roll-out of universal credit should end. Given the dire state of universal credit, as detailed by the several reports we have cited, it is inevitable that migration of claimants to the benefit in its present state will cause hardship and distress to many thousands of claimants.

We would therefore urge the SSAC not only report and comment on the proposed migration regulations themselves but to make recommendations as to the timing and nature of any migration and how claimants can be properly safeguarded.

The following are our concerns in relation to the provisions of the Universal Credit (Transitional Provisions) (Managed Migration) Amendment Regulations 2018 themselves.

Regulations 44 to 46 – need to make a universal credit claim, migration notices and deadlines

The DWP estimates that over a third of those due to be managed migrated to universal credit will be disabled people or have a health condition:

“During the managed migration process a large proportion of the caseload being migrated from existing benefits will have a disability or health condition.

To give an indication of this, an estimated 36% of those being managed migrated to UC will be ESA(income-related) claimants.”

(paragraph 133 Explanatory Memorandum to the draft regulations).

The regulations provide issuing a notice that a legacy benefit claimant’s existing benefit claim will come to an end after a period of between one and three months directing them to make a claim to universal credit before this deadline.

We are unclear why in most DWP benefit cases it is not possible for legacy benefit claimants to be simply transferred to universal credit without a need to make a claim.

Both the DWP and the local authority will already hold the relevant information on a claimant to make such a transfer. And the future payment of universal credit to that claimant will involve in any case liaison between the two.

Most DWP benefit claimants already have their DWP benefit paid into a bank account or similar.

Automatic transfer may not be possible where a claimant and/or their partner is working, and no payroll records are held by the DWP. But this information could be obtained by the DWP before such a legacy benefit claimant is migrated.

A process of transfer rather than claim will better safeguard all claimants, especially those who have a mental health problem or a disability that causes them difficulty in claiming universal credit online.

Incapacity benefit, severe disablement allowance and income support claimants have been subject to regulations with effect from October 2008 that converts their benefit awards to ESA without the need for a claim.

In terms of ease of information exchange between the DWP, HMRC and local authorities it is hoped that things have improved since 2008.

In relation to authorising information exchange relating to universal credit claimants, significant legislation has already been enacted to enable sharing between both public and private bodies. For example, the Social Security (Information-sharing in relation to Welfare Services etc.) (Amendment) Regulations 2015.

Given this, it is not clear why the DWP is insistent on manged migration by ‘claim’ rather than ‘conversion’ in most cases.

The four to six weeks “warm up” information period the DWP propose could be a “warm up” to transfer rather than migration.

The proposed claiming process places the responsibility for navigating the process of claiming universal credit on the person who is being migrated.

This inevitably means that there is a possibility that some disabled people, will suffer hardship due to their benefits stopping before a successful claim to universal credit.

We would highlight again the Citizens Advice evidence we have cited that a quarter of claimants it advised lost more than a week's universal credit entitlement because of difficulties finishing their claims. And that 48% found it difficult to provide evidence for health conditions.

The DWP itself found that almost half of universal credit claimants say that they needed help in registering their claim online and commonly needed one attempt to do so.

We acknowledge that HMRC may not hold the information needed for someone to transfer rather than claim universal credit.

However, many tax credit claimants are familiar of the need to renew their tax credit awards at the end of the tax year. Rather than migrate tax credits to universal credit at any point, we submit that tax credit claimants could be progressively migrated at their annual tax credit renewal point.

Regulations 44 to 46 – safeguards

The explanatory memorandum to the regulations sets out safeguards aimed at ensuring that people who are vulnerable or who have complex needs do not see their benefits stopped due to managed migration.

Regulation 45 provides that circumstances that may be treated as good reason for someone to miss their deadline to claim universal may include the claimant has a mental-health condition or has a disability or has learning difficulties.

Regulation 46 provides for universal credit to be backdated up to one month where someone has a disability they have a disability or can supply medical evidence that they had an illness that prevented them from making a claim.

While these safeguards are well intentioned there is little or no detail as to how the DWP will proactively identify such vulnerable claimants.

In a June 2018 briefing, Mind highlight that:

“There are many circumstances where people could potentially slip through the net. For example, the relatively common situation where a person is too anxious to open official letters, or to answer calls from unknown numbers, and who does not understand that they are being migrated. Or alternatively a situation where a person does not disclose their mental health problem to Department for Work and Pensions staff, misses the deadline day because of ill health, and has no evidence to show ‘good reason’. 

While we recognise the intention behind these safeguards, we do not believe that these arrangements, or a system of safeguards more generally, could adequately guard against the risk that significant numbers of people could see their benefits stopped as they attempt to navigate the process of applying to Universal Credit. “

Not having to make a direct claim but a transfer would mean that such safeguarding would not be needed.

If the DWP is to insist on migration rather than transfer, we submit that no migration should begin until it sets out its proposed safeguarding procedures and allows consultation as to how they might be better improved and managed.

We submit that a starting point for identifying claimants who might be vulnerable to the migration process would be those who are in receipt of ESA, limited capability for work national insurance credits, PIP or the disability premium within their legacy benefit.

It is those claimants who will need extra support who are among those who will be less likely to self-identify themselves to the Department.

Regulations 48, 56, and 57: gaps in transitional protection

The provisions for ending transitional protection are harsh, punitive and unjustified.

Making one defective claim to universal credit will permanently disqualify someone from receiving transitional protection, even if they are able to rectify the issue in time and make a successful claim.

This provision does not in any way acknowledge the difficulty many disabled people have with making an effective online claim for universal credit.

The DWP’s own research has found that it was quite common for the universal claim process to take more than one attempt and Citizens Advice found that 48% of claimants had difficulty providing evidence of health conditions.

Rather than penalising someone for making a defective claim the DWP should consider it a means of identifying someone who has difficulty with the claims process and needs extra support.

Given the difficulty of the claiming process we submit that this provision is removed.

The provision of ineligibility for universal credit due to earnings for a period of three months resulting in loss of transitional protection can only deter disabled people from gaining employment. Any loss of transitional protection for disabled people should be for a much longer period.

Regulation 63: Claimants in receipt of severe disability premium: restriction on new claims for universal credit and transitional payments

In June 2018, the High Court - in TP and AR, R (On the Application Of) v Secretary of State for Work And Pensions [2018] EWHC 1474 (Admin) - ruled that the Secretary of State unlawfully discriminated against two men who had to claim universal credit following a move into a full service area, and as a result had a sudden drop in income due to there being no equivalent to the severe disability premium and enhanced disability premium within universal credit.

Following the ruling, the DWP has now agreed to pay compensation of around £170 per month to each claimant - equivalent to the reduction in income they experienced - Men with severe disabilities win compensation following Universal Credit discrimination.

However, regulation 63 of the draft regulations - that deals with those who have already “naturally migrated” to universal credit - only provides for compensation to those in the position of those in the TP and AR judgement to a flat rate of £80 a month.

This ignores the loss of the enhanced disability premium that is not included within universal credit.

However, those who are subject to managed migration will have their transitional protection calculated under regulation 53 of the draft regulations. 

For single people over 25 years old who are in the limited capability for work related activity group this will be -

ESA calculation: £73.10 (personal allowance) + £37.65 (support component) + £64.30 (sever disability premium) + £16.40 (enhanced disability premium) = £191.45 x 52 divided by 12 = £829.62 per month.

Universal credit calculation: £317.82 + 328.32 = 646.14 per month.

A difference £183.48 meaning transitional protection for those subject to managed migration will be £183.48 per month.

Before moving, both TP and AR were in receipt of the severe disability premium and enhanced disability premium that specifically aimed at meeting the additional care needs of severely disabled people living alone with no carer.

When they moved both TP and AR were required to make a claim for universal credit as they moved into local authorities where the new benefit was being rolled out. According to both, they were advised by DWP staff that their benefit entitlement would not change.

Another common situation where someone has lost the severe disability premium and enhanced disability premium is where they have stopped claiming ESA to try employment of 16 hours a week or more.

Under ESA, if they gave this work within 12 weeks as it proved not possible for them to continue they would automatically return to ESA at the same rate and component as previously.

However, if the area in which they lived was now a universal credit live area this was not possible as a new ESA claim was prohibited. This meant a universal credit claim in which no severe disability premium and enhanced disability premium was payable.

We submit that the draft regulations should treat those who have undergone natural migration in a similar way to those who will undergo managed migration so that full transitional protection will no income loss is awarded to them.

Conclusions and recommendations

Given the dire state of the universal credit system we find it beyond belief that a responsible Government would intend migrating claimants to the benefit from July 2019.

DR UK’s recommendations are that:

1. There needs to be a complete overhaul of the administration and claiming of universal credit before managed migration to it should commence.

2. The migration process should not be carried out on a “test and learn” basis and that the DWP publish research to justify universal credit’s fitness for purpose before any legacy benefit claimant is managed migrated.

3. Instead of requiring migration by direct claim the DWP should instead seek to convert legacy benefit claimants wherever possible.

4. If a claim is needed, no claimant should have their existing benefit stopped until they have established a universal credit claim.

5. A starting point for identifying claimants who might be vulnerable to the migration process would be those who are in receipt of ESA, limited capability for work national insurance credits, PIP or the disability premium within their legacy benefit.

6. The DWP should consult with disabled people organisations and disability organisations to agree ‘quality and performance benchmarks’ for the DWP to achieve before managed migration begins. 

This should as a minimum include:

  • the percentage of claimants not being paid on time;
  • how disabled claimants will be identified; and
  • how disabled claimants will be supported in making any claim and that such support is in place.

7. Finally, we ask that the SSAC does not limit itself from reporting on its and others views on the provisions of Universal Credit (Transitional Provisions) (Managed Migration) Amendment Regulations 2018.

Instead, we hope that the SSAC also seeks to exercise its other recommendations as to the timing and nature of any migration and how disabled and other claimants can be properly safeguarded.

Ken Butler

Welfare Rights and Policy Adviser

Disability Rights UK

17 August 2018