Recommendations & Conclusions
22 items
2
Recommendation
Third Report: Universal Credit: the wai…
Rejected
DWP has previously adopted a sceptical attitude towards the evidence linking food bank use with Universal Credit. The Minister has now recognised that the Department needs to do more to improve its understanding of the what causes food bank use to increase. This is a welcome step. The Department has …
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DWP has previously adopted a sceptical attitude towards the evidence linking food bank use with Universal Credit. The Minister has now recognised that the Department needs to do more to improve its understanding of the what causes food bank use to increase. This is a welcome step. The Department has still not published its own analysis of the drivers of foodbank use, which it commissioned in 2018 and which it originally planned to publish in October 2019. We recommend that the Department publish this work without delay.
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Government response AI summary
The government explicitly rejects the recommendation to publish its analysis of foodbank use drivers, stating that due to resource reallocation for the COVID-19 pandemic, it will not be conducting or commissioning any research.
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Department for Work and Pensions
4
Recommendation
Third Report: Universal Credit: the wai…
Rejected
We also heard evidence which suggests that people on Universal Credit are more likely to have rent arrears than people still claiming legacy benefits. The Department’s own data show that, while some people who come onto Universal Credit have pre-existing rent arrears, the level of these arrears rises much more …
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We also heard evidence which suggests that people on Universal Credit are more likely to have rent arrears than people still claiming legacy benefits. The Department’s own data show that, while some people who come onto Universal Credit have pre-existing rent arrears, the level of these arrears rises much more sharply after they make their claim. Even after a year, they have not fully returned to their pre-claim levels. That too is a worrying finding which deserves investigation by DWP.
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Government response AI summary
The government rejects the recommendation to investigate the link between Universal Credit and rent arrears, citing resource reallocation due to the pandemic and arguing that attributing arrears solely to UC is simplistic.
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Department for Work and Pensions
5
Recommendation
Third Report: Universal Credit: the wai…
Rejected
There is also research which found evidence of an increased prevalence of psychological distress, following the introduction of Universal Credit, among people affected by the policy. The research was not able to delineate whether a change of benefit system in itself—such as moving to Universal Credit—was a driver of the …
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There is also research which found evidence of an increased prevalence of psychological distress, following the introduction of Universal Credit, among people affected by the policy. The research was not able to delineate whether a change of benefit system in itself—such as moving to Universal Credit—was a driver of the rise in psychological distress in the sample of people studied. Further research and evaluation would be needed to understand the drivers behind this rise and its clinical impact. In addition to this, there are wider reports of the impact of the wait for a first payment on claimants’ mental wellbeing. Again, the connection between these findings and the wait for a first payment is not yet clear. But the Department ought to seek to understand this evidence.
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Government response AI summary
The government rejects the implicit recommendation to conduct further research and evaluation to understand the drivers and clinical impact of psychological distress linked to Universal Credit, citing resource reallocation due to the COVID-19 pandemic and outlining other support measures.
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Department for Work and Pensions
6
Recommendation
Third Report: Universal Credit: the wai…
Rejected
DWP should conduct or commission research, before the end of this financial year, to develop its understanding of the impact of Universal Credit, particularly the wait for the first payment, on the rising use of food banks; on claimants’ levels of rent arrears; and on claimants’ mental health and mental …
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DWP should conduct or commission research, before the end of this financial year, to develop its understanding of the impact of Universal Credit, particularly the wait for the first payment, on the rising use of food banks; on claimants’ levels of rent arrears; and on claimants’ mental health and mental wellbeing. While the evidence we heard falls short of establishing a causal link between the wait and these experiences, that is no reason for the Department not to take these findings seriously. It should use them 78 Universal Credit: the wait for a first payment as a starting point for a concerted effort to understand the full impact of the wait for the first payment, and how this may differ for claimants who are moving to Universal Credit from legacy benefits and for those who are making entirely new claims. DWP should more thoroughly consider the evidence linking Universal Credit to increased use of food banks, rent arrears and psychological distress and should use this in its overall strategy for protecting claimants’ safety and wellbeing.
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Government response AI summary
The government rejects the recommendation to conduct or commission research on the impact of Universal Credit and the five-week wait on food bank use, rent arrears, and mental health, citing resource reallocation due to the COVID-19 pandemic and highlighting other support measures.
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Department for Work and Pensions
7
Recommendation
Third Report: Universal Credit: the wai…
Rejected
DWP should publish details of the meetings that it holds with stakeholders, like the Trussell Trust, to ensure that the public and Parliament know that important and well-regarded research, such as that produced by the Trussell Trust, is considered when policy and operational decisions are made. The publication should include …
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DWP should publish details of the meetings that it holds with stakeholders, like the Trussell Trust, to ensure that the public and Parliament know that important and well-regarded research, such as that produced by the Trussell Trust, is considered when policy and operational decisions are made. The publication should include the topics that were discussed and any actions that the Department decided to take following the meeting. (Paragraph 36) Moving to Universal Credit without a change in circumstance
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Government response AI summary
The government states that Ministerial meetings with stakeholders are already published quarterly on GOV.UK but rejects publishing details of every engagement, including topics discussed and actions taken, citing the need to maintain trust and partnership with stakeholders.
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Department for Work and Pensions
10
Recommendation
Third Report: Universal Credit: the wai…
Rejected
We recommend that DWP should eliminate the five week wait for all claimants moving to Universal Credit through managed migration, including for claimants moving from tax credits. Those claimants should continue to receive their existing benefits during their first monthly assessment period. They should then be offered the option, from …
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We recommend that DWP should eliminate the five week wait for all claimants moving to Universal Credit through managed migration, including for claimants moving from tax credits. Those claimants should continue to receive their existing benefits during their first monthly assessment period. They should then be offered the option, from day one of their Universal Credit claim, of choosing fortnightly payments of their award. This would ensure a smooth and seamless move from legacy benefits to Universal Credit for people whose circumstances have not changed.
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Government response AI summary
The government rejects eliminating the five-week wait by continuing legacy benefits, citing existing advance payments and run-ons. It also rejects offering fortnightly payments by default, stating that monthly payments prepare claimants for work and Alternative Payment Arrangements are available case-by-case.
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Department for Work and Pensions
12
Recommendation
Third Report: Universal Credit: the wai…
Rejected
The evidence we received was overwhelmingly in favour of some form of initial, non-repayable payment for new Universal Credit claimants. That would give new claimants the money they need for basic living essentials like food and heating, without requiring them to repay a debt to the Department from their future …
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The evidence we received was overwhelmingly in favour of some form of initial, non-repayable payment for new Universal Credit claimants. That would give new claimants the money they need for basic living essentials like food and heating, without requiring them to repay a debt to the Department from their future Universal Credit payments. We agree that new claimants should receive a form of Universal Credit: the wait for a first payment 79 “starter payment” when they first apply for Universal Credit. But we heard a wide range of proposals for how such payments should work and the level at which they should be set.
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Government response AI summary
The government discusses existing repayable Advances for financial support, the Breathing Space scheme, and increased funding for debt advice, but does not commit to the recommended non-repayable 'starter payment'.
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Department for Work and Pensions
13
Conclusion
Third Report: Universal Credit: the wai…
Rejected
We have considered the various options carefully. In recommending a course of action, we have chosen an approach which offers simplicity: a simple amount of money, so it is clear to claimants what they can expect, and a simple process, which does not require the Department to carry out any …
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We have considered the various options carefully. In recommending a course of action, we have chosen an approach which offers simplicity: a simple amount of money, so it is clear to claimants what they can expect, and a simple process, which does not require the Department to carry out any additional means-testing or assessment of a household’s needs. The benefits of simplicity seem to us to outweigh any possible cost savings offered by more targeted approaches. It would also address the Department’s concerns that targeted grants could risk creating an unfair system with significant disparities of entitlement between claimants.
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Government response AI summary
The government rejects the need for a starter payment, stating that New Claim Advances are already available, and introducing non-repayable advances would increase fraud risk and administrative burden.
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Department for Work and Pensions
14
Recommendation
Third Report: Universal Credit: the wai…
Rejected
We recommend that the Department pay all first time claimants of Universal Credit a “starter payment” equivalent to three weeks of the Standard Allowance of Universal Credit. This payment should be made two weeks after the initial claim, and only once the claimant’s identity has been verified, to mitigate the …
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We recommend that the Department pay all first time claimants of Universal Credit a “starter payment” equivalent to three weeks of the Standard Allowance of Universal Credit. This payment should be made two weeks after the initial claim, and only once the claimant’s identity has been verified, to mitigate the risk of fraud. The starter payment should also be given to people who move to Universal Credit by “natural” migration, in cases where it is not possible for them to be moved seamlessly to Universal Credit.
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Government response AI summary
The government rejects the recommendation to pay all first-time Universal Credit claimants a 'starter payment,' stating that New Claim Advances are already available and that non-repayable advances would increase fraud risk, administrative burden, and could lead to inappropriate gains.
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Department for Work and Pensions
16
Recommendation
Third Report: Universal Credit: the wai…
Rejected
The starter payments we have recommended would also be available to people making claims under the Special Rules for Terminal Illness. We recommend that the Department consider what further support it could offer to people making claims for Universal Credit under the Special Rules for Terminal Illness. That might include …
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The starter payments we have recommended would also be available to people making claims under the Special Rules for Terminal Illness. We recommend that the Department consider what further support it could offer to people making claims for Universal Credit under the Special Rules for Terminal Illness. That might include paying the starter payment more quickly on receipt of a DS1500 form; offering a larger starter payment to people making claims under the Special Rules; or proactively offering backdating (beyond the current limit of a month) of claims to people diagnosed with a terminal illness who have, understandably, not made a claim immediately on becoming eligible. (Paragraph 80) Advance payments
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Government response AI summary
The government rejects the recommendation for further support, including starter payments or enhanced backdating, for terminally ill claimants, stating that existing New Claim Advances negate the need for a starter payment and that UC already has an established fast-track process for these claimants.
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Department for Work and Pensions
19
Conclusion
Third Report: Universal Credit: the wai…
Rejected
The Department continues to claim that Advances are not loans, but we find that argument impossible to accept. Advances must be repaid at a set rate, over a set period. The Department risks misleading claimants, and damaging its own credibility, if it insists on denying the obvious fact that Advances …
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The Department continues to claim that Advances are not loans, but we find that argument impossible to accept. Advances must be repaid at a set rate, over a set period. The Department risks misleading claimants, and damaging its own credibility, if it insists on denying the obvious fact that Advances are interest free loans. Unlike firms in the consumer credit sector, where the FCA’s guidance stipulates that repayment rates should be set at levels that are affordable, there is no equivalent body that regulates public sector lending. While Advances can be a vital source of income for new claimants waiting for a first payment, we are concerned that some people find that they are unable to afford repayments later on.
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Government response AI summary
The government explicitly rejects the committee's finding, reiterating that a new claim Advance is not a loan but rather a spreading of UC entitlement. It explains that advances are limited to estimated awards, with support available for budgeting and repayment deferrals for hardship cases.
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Department for Work and Pensions
24
Recommendation
Third Report: Universal Credit: the wai…
Rejected
The Department says that claimants who are struggling can already defer repayments of their Advance for three months. But the evidence we have heard from charities who work with claimants is that this option is not effectively communicated. Without reliable data on how often it is used, it is impossible …
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The Department says that claimants who are struggling can already defer repayments of their Advance for three months. But the evidence we have heard from charities who work with claimants is that this option is not effectively communicated. Without reliable data on how often it is used, it is impossible to know how well this measure is working in practice. The Department should collect and publish data on how many people have requested a deferral of their Advance repayments, and how many of these requests were granted. It should also ensure that work coaches are proactively informing claimants of this option both at the time of their claim and during the repayment period. This should form part of the personal budgeting support we have recommended.
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Government response AI summary
The government rejects publishing additional specific data on advance repayment deferrals, stating no plans to do so at this point, though it will include general information on advances in its annual report. It does not address the recommendation for work coaches to proactively inform claimants …
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Department for Work and Pensions
26
Recommendation
Third Report: Universal Credit: the wai…
Rejected
Some people in financial distress during the wait for their first payment can face a difficult choice between using their Advance to pay their housing costs, or to cover other essential costs, such as food or heating. No one should find themselves in arrears—or facing eviction—during this time. We recommend …
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Some people in financial distress during the wait for their first payment can face a difficult choice between using their Advance to pay their housing costs, or to cover other essential costs, such as food or heating. No one should find themselves in arrears—or facing eviction—during this time. We recommend that anyone claiming an Advance should be given the option, at the outset, of having the housing element of the Advance paid directly to their landlord. This would ensure that claimants’ housing costs are covered during the wait for their first payment, and that they will not face the risk of falling into arrears or eviction as a result.
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Government response AI summary
The government rejects the recommendation to offer direct payment of the housing element of an Advance to landlords. It states that existing Managed Payments to Landlords are already available and cautions against the potential for landlord pressure if this option were introduced for advances.
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Department for Work and Pensions
30
Recommendation
Third Report: Universal Credit: the wai…
Rejected
We recommend that the Department invests in expanding and developing Help to Claim so that the service can provide support to people beyond the application process. This should include debt advice, support for people who are struggling with Advance repayments, and tailored support for people with complex needs who need …
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We recommend that the Department invests in expanding and developing Help to Claim so that the service can provide support to people beyond the application process. This should include debt advice, support for people who are struggling with Advance repayments, and tailored support for people with complex needs who need additional support throughout their claim. The service should also offer digital support—for example, supporting people to make use of the online journal to maintain their claim. This would bring Help to Claim closer to the original plans for Universal Support.
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Government response AI summary
The government rejects expanding Help to Claim to directly provide ongoing support like debt advice and digital skills. It states that Help to Claim already signposts claimants to other support services for these needs and defends the current scope of the service.
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Department for Work and Pensions
37
Recommendation
Third Report: Universal Credit: the wai…
Rejected
The Universal Credit application process requires claimants to provide a great deal of information about their circumstances, to enable the Department to assess their claim. When they have done this, Universal Credit claimants rightly expect that they should be paid the full amount they are entitled to, on time. For …
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The Universal Credit application process requires claimants to provide a great deal of information about their circumstances, to enable the Department to assess their claim. When they have done this, Universal Credit claimants rightly expect that they should be paid the full amount they are entitled to, on time. For too many people, however, this simply does not happen. There is a penalty for claimants who do not provide the necessary documents in time: their Universal Credit is paid late. But there is no equivalent penalty for the Department when it fails to keep its side of the bargain. Where a claimant provides all the information DWP has asked for on time, but DWP has not completed its own processes to verify the claim details and make a timely payment, the claimant should receive the full amount of benefit entitlement for which they are claiming. If the Department subsequently decides that a claimant is entitled to less than they have been receiving, claimants should not be expected to pay anything back to DWP except in clear cases of deliberate fraud. Similarly, where a claimant is expected to complete a Work Capability Assessment to assess how much money they are entitled to, the onus should be on the Department to schedule the assessment and make a decision within the usual initial waiting period for the benefit. If there are delays to the WCA process, through no fault of the claimant, claimants should be paid at the highest rate until their claim has been determined. (Paragraph 159) Tax credit debts
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Government response AI summary
The government rejects the recommendations, stating payment timeliness must be balanced with fraud reduction, and defending the existing WCA process which includes backdating awards if a delay occurs. They do not agree to pay claimants at the highest rate during WCA delays or limit repayments …
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Department for Work and Pensions
39
Recommendation
Third Report: Universal Credit: the wai…
Rejected
The recovery of Tax Credit debt from claimants’ Universal Credit awards clearly presents problems. However, the option of returning responsibility to HMRC now would be too challenging to deliver in practice. Instead, we recommend that DWP should continue to collect these debts, but that recovery should only begin when the …
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The recovery of Tax Credit debt from claimants’ Universal Credit awards clearly presents problems. However, the option of returning responsibility to HMRC now would be too challenging to deliver in practice. Instead, we recommend that DWP should continue to collect these debts, but that recovery should only begin when the claimant has repaid their Advance (if they have taken one out). Repayments of any remaining debt should be capped at 10% of the Universal Credit standard allowance per month. Debts that have not been pursued for more than 6 years should be written off entirely, in line with the approach taken in the private sector. We also recommend that the FCA’s approach be extended so that it covers public sector debts, including tax credit overpayments and Advances in Universal Credit. This will help ensure that best practice from the private sector is reflected in DWP’s approach to debt. (Paragraph 170) Universal Credit: the wait for a first payment 85 Backdating
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Government response AI summary
The government rejects the recommendation for a 10% cap on debt repayments, stating its 30% cap balances claimant needs with responsible fund administration. It does not address recommendations to delay debt recovery until advances are repaid, write off debts over 6 years, or extend the …
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Department for Work and Pensions
41
Recommendation
Third Report: Universal Credit: the wai…
Rejected
Many claimants are simply unaware that they can ask for their claim to be backdated by a month. Even when they do ask for backdating, they sometimes face an intrusive and bureaucratic process. We recommend that the Department review the use of evidence for backdating and works with work coaches …
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Many claimants are simply unaware that they can ask for their claim to be backdated by a month. Even when they do ask for backdating, they sometimes face an intrusive and bureaucratic process. We recommend that the Department review the use of evidence for backdating and works with work coaches to find a way to make the application process less burdensome on claimants. The Department should publish the information that work coaches use to advise claimants on backdating. It should work to increase awareness of the option for backdating from day one of a person’s claim, and of the circumstances in which somebody may be able to see their claim backdated.
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Government response AI summary
The government rejects the recommendation, stating that UC is designed for quick claims at the point of need, and that extending backdating beyond one month could disincentivize this. They do not commit to reviewing evidence use for backdating, publishing work coach information, or increasing awareness.
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Department for Work and Pensions
42
Recommendation
Third Report: Universal Credit: the wai…
Rejected
Currently, backdating is only permitted up to a month before the claim was submitted. Given the seriousness of the life events which might allow the backdating of a claim—bereavement, serious illness, relationship breakdown—this period seems astonishingly short. We recommend that, in specified circumstances, the Department allow backdating to the point …
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Currently, backdating is only permitted up to a month before the claim was submitted. Given the seriousness of the life events which might allow the backdating of a claim—bereavement, serious illness, relationship breakdown—this period seems astonishingly short. We recommend that, in specified circumstances, the Department allow backdating to the point at which the change in someone’s life occurred, rather than strictly a month before.
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Government response AI summary
The government rejects extending the backdating period beyond one month, arguing that it could disincentivize claimants from making their UC claims at the point of need. They reiterate that existing limited provisions and support are available for vulnerable claimants.
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Department for Work and Pensions
47
Recommendation
Third Report: Universal Credit: the wai…
Rejected
Universal Credit works best when it mirrors people’s daily lives. Payments which align with people’s rent schedules could make it easier for claimants to budget and plan. We recommend that the Department explain in response to our report whether it is feasible for landlords to tag the tenancy agreement to …
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Universal Credit works best when it mirrors people’s daily lives. Payments which align with people’s rent schedules could make it easier for claimants to budget and plan. We recommend that the Department explain in response to our report whether it is feasible for landlords to tag the tenancy agreement to the claimant’s Universal Credit claim so that payments are made in line with their rent schedule. If this is not possible, the Department should set out what aspects of the design of Universal Credit it would need to adapt to build in this flexibility for claimants.
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Government response AI summary
The government rejects the recommendation to align Universal Credit payments with rent schedules, stating it is not appropriate due to potential difficulties if claimants change address, and highlights an existing payment alignment feature for social landlords.
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Department for Work and Pensions
51
Conclusion
Third Report: Universal Credit: the wai…
Rejected
It is disappointing that suggestions to improve Universal Credit have apparently been thwarted by an IT system which was supposed to be developed in an agile fashion, yet seems to be anything but. It is unfortunate that such a rigid, clunky IT structure was adopted for UC which makes improvements …
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It is disappointing that suggestions to improve Universal Credit have apparently been thwarted by an IT system which was supposed to be developed in an agile fashion, yet seems to be anything but. It is unfortunate that such a rigid, clunky IT structure was adopted for UC which makes improvements required by Ministers and needed by claimants harder to implement, adding greater costs to benefit administration.
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Government response AI summary
The government rejects the committee's characterisation of the Universal Credit IT system as rigid and clunky, instead asserting its agility and strong performance in supporting claimants throughout the pandemic, maintaining high payment timeliness.
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Department for Work and Pensions
52
Recommendation
Third Report: Universal Credit: the wai…
Rejected
The monthly assessment is a core part of design of Universal Credit for the Department and is the guiding reason behind the five-week wait and payment in arrears. Although the Department says that most people in the wider economy are paid monthly, there is evidence that a significant proportion of …
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The monthly assessment is a core part of design of Universal Credit for the Department and is the guiding reason behind the five-week wait and payment in arrears. Although the Department says that most people in the wider economy are paid monthly, there is evidence that a significant proportion of people moving onto Universal Credit were paid weekly or fortnightly in their previous job. Even for people who are paid monthly, the recent High Court and Court of Appeal cases which found against DWP show that a rigid assessment still causes fluctuations for claimants, financially disadvantages people and, in some cases, puts people off applying for more stable work. But changing the monthly assessment period would entail a fundamental rebuilding of the entire Universal Credit system. That is not likely to be feasible in the short or even medium term. In the longer term, we would encourage the Department to consider in detail the proposals that have been made for systems that could more flexibly meet claimants’ needs—especially for people who are not paid monthly.
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Government response AI summary
The government rejects the recommendation to consider more flexible assessment systems, stating that such a system is not easily operationalised due to complexities with fluctuating earnings and multiple income sources, which would cause financial uncertainty and poor customer service.
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Department for Work and Pensions
53
Recommendation
Third Report: Universal Credit: the wai…
Rejected
We recommend that the Department assesses a model in which it estimates people’s daily pay rate from data it already receives from HMRC, as suggested by Ferret Information Systems, and in which it would make payments from day one of the claim with reconciliation in month two. We request that …
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We recommend that the Department assesses a model in which it estimates people’s daily pay rate from data it already receives from HMRC, as suggested by Ferret Information Systems, and in which it would make payments from day one of the claim with reconciliation in month two. We request that the Department share information on what data that it receives from HMRC, including whether it knows how frequently people are paid, and makes clear what parts of its system are and can be automated. (Paragraph 232) Conclusion
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Government response AI summary
The government rejects the proposed model for daily pay rate estimation and day-one payments, explaining it cannot be easily operationalised for claimants with fluctuating or multiple earnings due to reconciliation challenges and potential over/underpayments, but it does detail the data received from HMRC.
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Department for Work and Pensions