Asked by
What steps they are taking to remove the five week wait for
Universal Credit payments.
The Question was considered in a Virtual Proceeding via video
call.
The Parliamentary Under-Secretary of State, Department for Work
and Pensions () (Con)
The universal credit assessment period and payment structure are
fundamental parts of its design. An assessment period must run
its course, which includes a feed of earnings data from HMRC,
before an award reflecting actual household circumstances can be
calculated. This can be achieved only by having a model based on
paying in arrears, and we have no plans to change that.
(Lab)
I thank the Minister for that Answer. There have been 2.8 million
claimants for universal credit since lockdown, and I fear many
more will come. They are all being hit by the five-week wait. The
Resolution Foundation found that on average, people going on to
universal credit see their disposable income almost halved. All
Ministers will offer is an advance, but that pushes people into
debt and asks them to live on less than universal credit for a
whole year to repay the debt. The Government have steadfastly
resisted a deluge of calls from across the board to abolish the
five-week wait or at least to turn advances into grants that do
not have to be repaid. Why will they not do it?
Non-repayable advances cannot be implemented without significant
development of the universal credit system. No one has to wait
five weeks. Advances are available urgently. The repayment
schedule is to be extended to 24 months in 2021. Repayment can be
delayed by three months in certain circumstances, and we removed
the seven-day waiting period. This is all backed up by support
from work coaches.
(Con)
My Lords, given the greatly increased burden on the DWP, can my
noble friend indicate what measures are being taken to ensure
that the benefits system can cope?
I am pleased to be able to tell the House that we have seen
unprecedented hard work and dedication by the staff of the DWP to
make sure that the unprecedented number of claims have been paid
in a timely and efficient manner. Our system is standing up to
the challenge, and I am pleased to say that we have redeployed
staff and introduced more IT equipment. Our highest priority is
to pay the benefits that people need, and we are coping with
that.
(CB)
My Lords, I declare an interest as chair of Feeding Britain,
which has found that the poorest groups in our society are the
only ones who have suffered a reduction in disposable income.
They cannot afford to wait these five weeks. Will the Minister
set a long-term target of reducing this wait and a short-term
goal of introducing, with immediate effect, the department’s
policy, which is not due to take effect until October 2021, of
further easing the rate of repayment of advances?
The noble Baroness makes a very good point and I understand where
she is coming from, but I must tell her that there are no plans
to do as she requests. Bringing forward the October 2021 easement
is not something I have heard discussed, but I am happy to go
back to the department and find out.
(Lab)
My Lords, according to a recent Resolution Foundation survey,
two-fifths of new UC claimants had not asked for an advance
because they feared getting into debt—and debt it is, albeit
interest-free. Will the Government therefore follow the
foundation’s advice and at the very least suspend repayments for
some months, following the welcome precedent set with other debt
repayments, which shows that it is administratively possible, and
if not, why not?
Non-repayable advances cannot be implemented without significant
changes to the system; this is not currently our policy intent.
Funding to do it would be needed from the Treasury, costing an
estimated £2 billion to £2.7 billion. With an advance, there are
13 payments over a year instead of 12, and as of next year the
period over which advances have to be repaid will be extended
from 12 months to 24 months.
(LD)
People who are suddenly faced with zero income are unable either
to wait five weeks for funds or to repay an advance by receiving
lower payments, as required by universal credit. Will the
Government consider providing an additional dedicated hardship
fund via local authorities to provide immediate relief for people
in urgent need?
The issue of a local hardship fund has been raised and there is a
recommendation for it to be put in place. I am afraid that we
will have to wait for the outcome of those deliberations.
My Lords, the problems of the five-week wait have already been
highlighted by other noble friends, and we should not
underestimate their seriousness, but perhaps I may draw attention
to some other temporary changes in universal credit. There has
been an increase of £20 per week, which Ministers have stressed
is a temporary, emergency measure, but the IPPR has calculated
that if this had been in place since 2015, the UK would have
entered this crisis with a pretty staggering 500,000 fewer people
in poverty. Do Her Majesty’s Government plan to make this
increase in universal credit a permanent feature, particularly as
it would be such a help to children?
My answer to the right reverend Prelate is that I know of no
intention to make it a permanent arrangement.
(Con)
My Lords, can my noble friend explain the measures that are in
place to support claimants with their housing costs?
We have increased the local housing allowance to cover the lowest
30th percentile of the local market, and alternative payment
arrangements to landlords have been put in place. If claimants
have great difficulties, they can speak to their work coach or
client adviser, who, if there is a way to help them, will do
their best to find it.
(CB)
My Lords, the five-week wait has significantly increased
household debt and anxiety as a result of council tax arrears.
Will the Minister please press the Government to issue clear
guidance to local authorities that collection and enforcement
activity on council tax arrears, including all bailiff contact,
should be suspended for a minimum of three months?
I am happy to take that point back to the department and will
write to the noble Baroness in due course.
(Lab)
Given that the Chancellor has shown flexibility in designing his
deal for the unemployed, will the Government consider suspending,
at least temporarily, all the cuts which people on universal
credit have had to suffer and which, in any case, should have
been removed? Will they suspend them for, say, another 18 months?
I do not wish to be negative in any way but I have no knowledge
of the Government considering that. Therefore, I am unable to say
more than I have already said.
(LD)
Does not the mechanics of the whole-month approach to changes in
circumstances create arbitrary fluctuations in income that are
hard for those on low incomes to manage?
I am not sure that I agree with the noble Baroness about the
complexities of the changes. As we have made clear all along, we
are trying to make the universal credit system replicate the
world of work. However, I am aware that people on low incomes
have difficulties, and I assure the noble Baroness that the
Government want to do all they can to help them.
(Con)
My Lords, can my noble friend expand a little on the previous
question and explain how the structure of monthly payments
compares with the legacy system, which had much shorter
timescales?
Universal credit is simpler and fairer than the legacy system. It
is designed to target resources at those who need them the most
and to provide support for people who cannot work. There is a
monthly reconciliation, which we are absolutely clear is better
than the annual reconciliation.
