Asked by Baroness Sherlock To ask Her Majesty’s
Government what assessment they have made of the impact on
claimants of the time taken between applying for Universal Credit
and receiving payments. The Parliamentary Under-Secretary of State,
Department for Work and...Request free
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Asked by
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To ask Her Majesty’s Government what assessment they have
made of the impact on claimants of the time taken between
applying for Universal Credit and receiving payments.
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My Lords, the universal credit assessment period and
payment structure is a fundamental part of its design,
reducing welfare dependency by mirroring the world of
work. Safeguards are in place to help the minority of
claimants who are in genuine need to transition to
universal credit. This includes advances and budgeting
support. We continue to work closely with landlords,
local authorities and other organisations to ensure
claimants are supported.
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My Lords, if only it were that simple. In 2013 the
Government introduced a rule that when you first claim
benefit you are not entitled to any money for the first
seven days. The problem is that universal credit is paid
monthly in arrears so it means you get no money at all
for six weeks. That does not sound very long, but the
typical family in social housing has only £200 in savings
and some people are in debt. Social landlords are now
saying that tenants are getting into big arrears and
people are turning to payday lenders and even loan
sharks. Even the noble Lord, , recently told the
Work and Pensions Select Committee that the seven-day
waiting period should be dropped. Please can the Minister
not be complacent about this. Will he go back to his
department, look again at the evidence and please take
action before anyone else is pushed into debt?
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My Lords, I repeat what I said in my original Answer. It
is a fundamental part of the design. That argument was
put forward by my noble friend during the passage
of the Bill and was debated at great length. We recognise
that this does not necessarily suit everyone. That is why
I again made clear in the second part of my Answer that
there are safeguards in place. We introduced universal
credit advances for new claimants. Claimants can apply
for an advance immediately if they are in need and can
receive up to 50% of their indicative award soon
afterwards. To go back to the original point, it is
important to make sure that we mirror the world of work
where 75% of employees are paid monthly.
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My Lords, in the last three months I have visited a large
number of food banks across the diocese of Oxford in
seemingly affluent communities, building on my experience
of food banks in the diocese of Sheffield. All have
underlined to me that the most common reason why people
access food banks is delay in accessing welfare payments.
It is clear from the Government’s figures that too few
people are aware of, or receiving, the emergency payments
intended for them. Will the Minister please outline what
steps the Government are taking to improve communication
of and access to short-term benefit advances for existing
benefits and to ensure that lessons learned from this are
applied to the operation of universal credit.
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My Lords, the right reverend Prelate is right to draw
attention to the problems some people have in knowing how
the system works. He will find that how work coaches
explain the administration of universal credit to people
coming to them is completely different from how it used
to operate. I recommend that the right reverend Prelate
takes an opportunity to visit one of his local jobcentres
to see how it works in practice. He might find that
things have moved on a great deal since, say, his time in
the diocese of Sheffield. If he wishes to take up my
offer I will be more than happy to make the arrangements.
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My Lords, is it not the case that it is not just the
architecture of universal credit that is creating
problems but its administration, as the Select Committee
in the other place determined? I understand that, when
asked about the sometimes fractious relationship between
the DWP and the Treasury over universal credit the noble
Lord’s predecessor said that,
“there were times when one’s view about the Treasury was
totally unprintable”.
Does the current Minister have any such inhibitions?
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My Lords, we have all on occasions had moments when we
have had doubts about what goes on in the Treasury, but I
shall not go into that at the moment. I shall go back to
what the noble Lord said about the administration of the
benefit. From my experience some 25 years ago in the old
Department of Social Security, seeing how things are
operating now in the DWP with universal credit, I think
that there is a very real change taking place. It is
important that noble Lords get a look at what the work
coaches are doing and how they are getting this over to
claimants who are coming to them. The offer that I made
to the right reverend Prelate is one that I repeat to the
noble Lord.
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My Lords, it is a fundamental design of universal credit
that people have to wait a month for their benefits to
mirror what happens in real life, but that is not
actually what is happening. Many families are
experiencing delays of up to 12 weeks in the payment of
universal credit, forcing them to use food banks and
borrow from loan sharks. I have heard what the Minister
says about the mechanism placed to prevent it from
happening, but is he aware that it is just not happening?
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My Lords, we were grateful for the support of the Liberal
Party as part of the coalition Government in the passage
of the Bill and in reaching that appropriate design,
whereby we were looking for something that mirrors the
world of work. That is what we are doing. That is why we
also built in, as I made clear in my original Answer, the
safeguards that we have. That is why, for example, I have
stressed that there are universal credit advances for
certain individuals who are having problems coping with
that four-week waiting period.
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My Lords, I am sure that all of us in this House want
universal credit to work, but it is not. There have been
pilot schemes showing how people are being plunged into
debt through no fault of their own. There are three
simple administrative changes, as my noble friend on the
Front Bench mentioned, that would transform the easy
delivery of UC and prevent people spiralling into deep
debt from which many can never recover. The first is to
get rid of the seven-day waiting period; the second is to
pay people fortnightly as well as monthly in advance, if
they so wish; and the third is to pay housing benefit, if
tenants so wish, direct to the landlord. Those three
things together would transform the ability of people who
are not particularly sophisticated about the benefit
system—why should they be—and give them the opportunity
to get money that will help them back into the labour
market, as we all want, and not have a lifetime of debt
hanging over them.
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My Lords, I am very grateful that the noble Baroness
offers support for universal credit. Like her, we wish to
see it work, which is why, as my noble friend always made clear,
we want to see a very slow rollout of universal credit.
The noble Baroness, Lady Hollis, will be aware just how
slow that rollout has been—deliberately so, before the
noble Baroness, Lady Sherlock, giggles too much—so that
we can learn as this goes along. I do not necessarily
accept the three points that the noble Baroness made, but
they can be taken into account as we continue with that
rollout as it accelerates over the coming year.
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