Source · Select Committees · Public Accounts Committee
Recommendation 16
16
Department initially underestimated Universal Credit non-claim rate for Tax Credit claimants.
Conclusion
The Department told us that, before the migration started, it had no evidence to use to assess how many Tax Credit claimants would not transfer to UC. At the time, the public finances had been under challenge so it had decided to make a safe assessment of what the non-claim rate would be, as it did not want to under-forecast the costs of UC. Its public expenditure forecast assumed an overall non-claim rate of 3% for all legacy benefit types, based on what had happened with the earlier move from incapacity benefit to ESA. It did not break the rate down between different types of benefit.29 The Department also told us that the non-claim rate for households claiming Tax Credits had remained fairly consistent during testing and as it rolled out the migration process at scale.30 In November 2023, the Department revised its migration plans and now expects 26% of households claiming Tax Credits, and 4% of households claiming other legacy benefits or combinations of benefits, will not move to UC.31