Select committee: Work and Pensions Committee
Recommendation 39
Third Report: Universal Credit: the wait for a first payment
Published 19 Oct 2020
Paragraph 170
Addressed to Department for Work and Pensions
Work and Pensions Committee Universal Credit: the wait for a first payment All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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.
From: Work and Pensions Committee, Third Report: Universal Credit: the wait for a first payment (HC 204), paragraph 170, 19 October 2020
Government response
The government responded to the whole report on 12 January 2021 (deadline 19 December 2020).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government notes the Committee's report and, in the sections summarised here, declines to adopt most of its main recommendations, saying that advances mean "No one has to wait five weeks for a payment".
- On research into the impact of the wait, the Department states that it "will not be conducting nor commissioning any research", saying resources were reallocated to the COVID-19 response.
- On a starter payment, the Government says there "is not a need for a starter payment in UC" because New Claim Advances are available, and cites increased fraud risk. It says it will "not be introducing" more frequent payments by default.
- On the deduction cap, it points to the lowering from 30% to 25% of the standard allowance, "effective from October 2021", and says further lowering "would not be an effective way to protect vulnerable claimants".
- It states that it "does not agree that monthly updates" on Work Coach recruitment are appropriate, but will ensure "relevant updates" are supplied to Parliament. It also reports a commitment to increase Work Coaches by 13,500 by end of March 2021.