Select committee: Work and Pensions Committee
Recommendation 52
Third Report: Universal Credit: the wait for a first payment
Published 19 Oct 2020
Paragraph 231
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 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.
From: Work and Pensions Committee, Third Report: Universal Credit: the wait for a first payment (HC 204), paragraph 231, 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.