Oral answer (Lords) on Universal Credit - Sep 5

To ask Her Majesty’s Government what assessment they have made of the impact on claimants of the timing of Universal Credit assessments and payments.

One of the main building blocks of universal credit is the monthly payment cycle. It is important because we are trying to replicate the world of work where people receive their salary on a monthly basis. There are no issues for the majority of claimants. Universal credit has been designed to take earnings into account in a fair and transparent way. We do not want to prejudice the ongoing legal case, but I assure the House that we take any feedback very seriously. We welcome it. We care about our clients, and we want our system to work for them.

I thank the Minister and I am happy to give her some feedback right now. The Child Poverty Action Group has done some work on real cases and has found low-paid workers who are losing hundreds of pounds a year because their payday clashes with the monthly assessment period for universal credit. If someone is paid fortnightly or every four weeks, they can end up being paid twice in one universal credit month and not at all in the next. The result is that they lose a lot of money in work allowances. In the double month they can lose things such as free prescriptions because they seem to earn too much and in the lean month they can be hit by the benefit cap because they look like they earn too little. CPAG has made some really obvious recommendations, such as flexing assessments dates and averaging income figures. Are the Government going to look at this and, if so, when? It surely cannot be right that some people lose out just because of when they get paid.

I am always happy to rely on the noble Baroness to keep us on our toes and I am grateful to her for it. She raised valid points which are in the report. We are listening to stakeholders. We understand the concerns raised in the report, and we are going to come back and say what can or cannot be done, but we cannot prejudice the legal case and, annoying as it is, I ask the noble Baroness to be patient. We are doing our very best to consider the report.

My Lords, will the Minister tell the House what support the Government are giving families who may have trouble budgeting when it comes to some of the variable payments when they transition to universal credit?

There are many different supports that we give people. Personal budgeting support is offered to all universal credit claimants from the outset of their claim. It helps them as they transition to universal credit and adapt to the financial challenges that it gives them, some of which are significant. It can be online, telephone or face-to-face support. We are reviewing the universal support system and personal budgeting the whole time and we will do all we can to make sure that claimants are equipped to get the best from the system.

Does the Minister agree that the timeliness of payments should be a key performance indicator in any respectable social security system? Would she consider contriving a set of statistics broken down to universal credit full service payment areas, comparing the timely payment or otherwise of universal credit against the local performance for payment of the legacy benefits that universal credit is designed to replace?

I am pleased to tell the House that 80% of new claimants are paid on time and in full, and 90% of universal credit payments across the board are paid on time and in full. That is not 100%, and we need to get there. I would like to have a conservation with the noble Lord to understand exactly what he wants, and if it is possible, I will do it.

Where a claimant would be entitled to transitional protection under the migration management arrangements, what would be the effect of the rules that my noble friend outlined if a universal credit payment ceases, even if it is later revived? Would that transitional protection cease or would it continue?

As I understand the transitional protection, there are ups and downs. I need to double check with officials before giving an answer that is not accurate; I have no desire to do that.

Will the Minister explain why no additional allowance is made to people on universal credit in the long school holidays when their children are not receiving free school meals?

I can say that when children are on holiday from school, their parents or whoever is looking after them are responsible for feeding them. I do understand that that causes a problem, as these youngsters get school meals when they are at school. I am unaware of any plans to change that, but rather than get it wrong, I shall find out exactly and come back to the noble Baroness. If she has any ideas, I shall be pleased to have them.

I wonder whether one of the difficulties is not still that when somebody is on another benefit and goes on to universal credit, that person gets no benefit for a period. During that period, it is possible to get a loan to cover expenses, but unfortunately the loan is then deducted from the benefit once that starts. The loan off the benefit means that the resulting net amount is extremely small. This has been a difficulty, and I understood that it would be looked at, but I am not sure that it has been satisfactorily resolved. Can my noble friend help me on that?

When people are in financial difficulty, they can have 100% advance from day one. It has to be paid back but it can be done over six months and, in cases where there is real difficulty, over 12 months. Before this Question, I talked to people in Jobcentre Plus. Where the work coaches are in good relationships with their clients, which I hope is in the majority of cases, claimants can raise it with their work coach. I am assured by a district manager that solutions are being sought and people are not being left hanging, as it were.