The switch to Universal Credit represents one of the biggest changes to the welfare system in the United Kingdom in recent decades. Originally announced by the coalition government in 2010, the benefit replaces six means-tested benefits with the aim of streamlining the system, encouraging personal responsibility and making it easier to claim.

The idea initially gained support from across the political spectrum. However, there have been multiple problems with the roll-out of the benefit and it is now renowned for its setbacks amid increasing hostility from both claimants and professionals alike. With an estimated seven million households due to be in receipt of the benefit by 2023, it is clear that the government must take steps to bring the benefit in line with the original vision.

A recent report by think tank Bright Blue reviewed the current system and interviewed Universal Credit claimants to get their views on the new benefit. Their research showed a mistrust of the system, with many claimants struggling with the nature of the new application. This has led some claimants to believe that the process is deliberately more complicated as a way to save the government money.

Megan George, a member of our Pro Bono team, has summarised below some of the main problems identified by Bright Blue’s report that claimants are facing with the new system.

 

Initial waiting period

The first and most widely-reported issue is the initial waiting period. New Universal Credit claimants must wait at least five weeks before receiving their first payment. This is because the benefit is paid in arrears and only after a four-week assessment period, plus a one-week period for the benefit to be calculated and processed.

Whilst many claimants agree that having their benefit paid in arrears was beneficial and helped them to budget more effectively, this initial waiting period has caused many claimants to fall into debt. A report from Citizens Advice found that 36% of Universal Credit claimants were left unable to pay for essentials such as rent, energy or other bills as a result and that nearly three in 10 claimants relied on a food bank during this period. Fifty one percent of claimants had to borrow money from friends and family to survive the waiting period.

The report recognises that the initial waiting period has been reduced from six weeks, however, this does little to alleviate claimants’ financial hardship.

 

Accessing the benefit

New Universal Credit claimants must set up an online account and complete their application, including submitting documents to verify their identity, within 28 days. They are then expected to manage their benefit online.

Whilst this was a positive change for younger claimants, the report found that older claimants or those suffering with physical and mental health problems were adversely affected by this new application process. Claimants from these demographics were found to have relied heavily on ad hoc assistance from family and friends.

Some of the interviewees reported trying to make use of the telephone helpline as an alternative. However, many were put off by the poor service, particularly the length of time they had to wait to speak to an advisor.

 

Maladministration and sanctions

A further issue raised in the report was that whilst claimants are subject to harsh sanctions for not fulfilling their obligations under the new benefit, there are currently no sanctions impose on the Department for Work and Pensions (DWP) for maladministration, despite an increase in administrative errors.

Under the new system, claimants must sign and comply with a ‘claimant commitment’. This document sets out the obligations with which they must comply to be in receipt of the benefit, for example, the number of hours in a week they are expected to work. If a claimant is not found to not be fulfilling these obligations, a number of sanctions may be imposed. There is evidence that these sanctions are being imposed more frequently than under the previous system.

However, despite a rise in examples of maladministration by DWP, (including examples where DWP had failed to pay claimants their benefit, which had led to severe financial distress), there are currently no sanctions imposed on DWP. The report noted frustration among claimants for the stark contrast in how their failures were treated in comparison to the failures of DWP.

Research showed that all of the above problems with the current system adversely affect those who are older, self-employed, long-term unemployed, and/or suffer from mental or physical health problems.

In response to these problems and the comments of the interviewees, the report suggests ways in which to improve the system to make Universal Credit the easy-to-use and streamlined benefit first envisaged by politicians. The report proposes that in implementing changes the focus should be on helping claimants who are older, unemployed, self-employed or who suffer from mental or physical health problems.

The report made 11 recommendations in total, including the below suggestions, which aim to tackle the problems listed above.

 

One-off payment

The first recommendation made by the report is that all new Universal Credit payments are offered a one-off initial ‘helping hand’ payment, which would be non-repayable. The sum would be equal to 25% of the estimated initial award and, therefore, equivalent to a week’s worth of their future benefit.

The aim of this recommendation is to help ease the financial stress currently placed on claimants who are awaiting assessment and payment of their benefit.

 

Improving access and assistance

Many of the current claimants found it extremely difficult to reach a member of DWP when they experienced problems with the application process or payment of their benefit. As it is important that any problems are rectified as soon as possible, the report suggests the implementation of a live chat facility within online Universal Credit accounts to allow claimants’ queries to be answered quickly and at their convenience.

The report also suggests that there is a full-time disability and mental health specialist employment adviser in every Jobcentre Plus to answer queries about the application. This would be especially useful for those who struggle to access the benefit online, including those with physical and mental health issues.

Whilst the report found that the younger generation found it easier to access the benefit online, even some of the more tech-savvy claimants found it hard to use the website on their mobile browsers. As such, one of the claimants suggested that a user-friendly mobile phone app be created.

 

Penalties

The report notes the disparity between how the actions of claimants are penalised and the lack of sanctions imposed on DWP for administrative errors. It gives recommendations to make the system fairer.

Firstly, it suggests that victims of maladministration by DWP should have the right to appeal to an independent case examiner who would have the authority to award compensation to claimants. This could include compensation where benefits are paid late.

 

Finally, the most widely reported recommendation is that a financial reward should be provided to claimants who put ‘maximum effort’ into finding a job but are unable to do so. This would be a ‘small but significant’ cash supplement to those who consistently meet the most demanding conditions set by their work coaches but who, despite their best efforts, are simply unlucky in their search to find suitable employment. This recommendation aims to counteract the current unfair system of sanctions by balancing these out with the possibility of rewards for motivated claimants.

It remains to be seen whether Bright Blue’s recommendations will be implemented.

In the meantime, the legal service is on hand to provide help and advice on welfare benefits to those who have suffered catastrophic injury and who may be adversely affected by the current difficulties with Universal Credit. If you need advice, please contact Kara Smith on 020 7822 8049 or email ksmith@stewartslaw.com.

 

For more information the full report can be found here – ‘Helping Hand? Improving Universal Credit’.

 


 

This article was published as part of ‘The Legal Service Newsletter’. The Legal Service is provided by Stewarts’ pro bono team as part of the firm’s commitment to help people with serious injury. The service offers free advice to patients when they need it most.

To make a referral to The Legal Service, please contact Kara Smith by phone on 020 7822 8000 or by email at ksmith@stewartslaw.com.

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