Select committee: Economic Affairs Committee
Recommendation 27
2nd Report - Universal Credit isn't working: proposals for reform
Published 31 Jul 2020
Paragraph 129
Economic Affairs Committee The economics of Universal Credit All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
The recent increase in the standard allowance is welcome considering the evidence we have received about the adequacy of Universal Credit, which said that it was often not enough income to live on. Universal Credit must provide claimants with an adequate income and act as a safety net for avoiding extreme poverty and hardship. We believe that the increase shows the original rate was not adequate. The Department has, to date, said that this is only a temporary measure. The Government should commit to making the increase in the standard allowance permanent. The Government should commit to making the increase in the standard allowance permanent. To avoid undue hardship and poverty it should also examine the relative levels of benefits for couples and those with children and investigate whether there are other claimant groups who do not receive adequate income .
From: Economic Affairs Committee, 2nd Report - Universal Credit isn't working: proposals for reform, paragraph 129, 31 July 2020
Government response
The government responded to the whole report on 13 October 2020 (deadline 30 September 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 recommendations and says it is 'surprised by several of the Committee's observations', and in the areas covered below it does not take forward the main design changes proposed.
- On payment design, the Department says it "will not be taking this recommendation forward" on a three-month fixed award, and "will not be introducing this choice by default" of monthly or twice-monthly payment. It cites accuracy risks and preparation for monthly paid work.
- The Department states that "in 2021 we will be increasing the time over which an advance can be repaid to from 12 to 24 months". It "rejects" the proposed non-repayable two-week initial grant, citing fraud risk.
- The Department "does not accept" the recommendations on the two-child limit and on reducing the taper rate. It says it "keeps the taper rate under review".
- It "intend[s] to keep childcare support integrated as part of UC" and "does not publish estimates of UC take-up rates". On the benefit cap, it "acknowledges" the recommendation and says the statutory review "will happen at an appropriate time".