Universal Credit

On the 11th of January 2019 the Minister for Employment, Alok Sharma, made a statement on Universal Credit (UC) that UC had to work for all; and to deliver it the Government was to seek powers for a pilot of managed migration so that the Department cannot issue any more migration notices once 10,000 people have been awarded UC through this process to provide the opportunity for the Government to develop the best support for claimants. This entails replacing the current regulations laid before the House with two separate statutory instruments.

The first is a negative statutory instrument to provide for the Severe Disability Premium gateway that prevents legacy claimants who are in receipt of the Severe Disability Premium from moving naturally to UC and allows them to continue to claim legacy benefits until they are moved over as part of the managed migration process. This will come into force on 16 January.

The second affirmative statutory instrument will contain the remaining regulations as laid on 5 November 2018. These deliver government commitments to provide transitional protection for claimants who are moved by the Department. These also provide for transitional payments to those claimants who were previously in receipt of Severe Disability Premium and have moved to UC before the gateway came into force.

Because the government are including a new provision for no further migration notices to be issued when 10,000 claimants have been moved onto UC as part of managed migration, the Government are legislating for “piloting powers” rather than the migration of all claimants. This is in line with suggestions from the Secondary Legislation Scrutiny Committee and the Work and Pensions Select Committee. The Government will report their findings from the pilot before bringing forward legislation to extend managed migration. The pilot will begin, as planned, from July 2019 and does not affect the timeline for delivering UC, which will be completed in 2023.

Also, the current legislation provides that, from the 1st of February, new claims to UC will support a maximum of two children, regardless of their date of birth. However, with a focus on families making a new claim whose children were all born prior to the implementation of the policy, the government concluded that including these families would not be right and therefore they will be entitled to support for any children born before 6 April 2017, the date that the policy was introduced. The necessary legislation is being brought forward to enable this change, with exceptions in place to support those who are not able to make decisions about the number of children in their family.

Key points:

The planned extension of the two-child cap on Child Tax Credits is to be abandoned. First introduced for families with third and subsequent children born on or after 6 April 2017, from the 1st of February it was to be extended to include third and subsequent children regardless of when they were born. DWP said this would benefit 15,000 families.
Amber Rudd, the Secretary of State for Work and Pensions, will change the draft managed migration regulations to remove the initiation of managed migration, but keep the commitment to Severe Disability Premium recipients (i.e. back-payments and ensuring they don’t move onto UC through natural migration).
Confirmed 10,000 pilot for managed migration would happen beginning July 2019.
Increasing flexibilities in payment: building an online system for private landlords so they can request for tenant’s rent to be paid directly to them; pilot for how provision can be improved to more frequent payments for those who are struggling on a monthly budget.
Work needed to ensure that UC payments go to primary carer in a household.
UC and childcare: flexible support fund to be used to help smooth transition for those who struggle with childcare costs in first month; DWP to be more flexible when parents are unable to report their childcare costs immediately so that the costs can be reimbursed.
Reported that Rudd will end benefits freeze after the planned four years. Rudd said in speech Q&A she thinks the benefit freeze should come to an end next year (which would keep it at the planned 4 years) but she hasn’t had conversations with the Treasury on this so can’t be more definitive.
Rudd also said on BBC Radio 4 “Maybe things that were proposed previously weren’t effective or weren’t compassionate in a way that I want them to be”

SNP Position:

This latest U-turn is an admission that the two-child cap is a fundamentally punitive and unfair policy. If Amber Rudd is reversing it for some families, she should also be reversing it for all those who are currently and will be subject to it.
This policy still actively targets children with austerity – despite this small U-turn it remains callous and unjustifiable.
The Tories’ dangerous rhetoric that this policy is designed to stop disadvantaged families having more children is both abhorrent and irresponsible.
The fact is these payments are there to support families whose circumstances change – and families who already have three children and fall on hard times will still be subject to the cap.
The reality is this policy is still applying to families right now and will push hundreds of thousands of children into poverty.
We are pleased the campaigning of our SNP colleague Carol Monaghan MP has forced Amber Rudd to stick by her Department’s commitment to pay back those who have lost out – and are still losing out – on Severe Disability Premium Payments. This needs to happen as a matter of urgency.
It is positive that DWP are looking at improving flexibilities in payment to support claimants to budget more – the Scottish Government have already delivered this in Scotland.
Payments going to primary carers in a household is also welcome, however this is a far cry from a separate payments system and will not protect women who are in abusive relationships. She must introduce a system of separate payments in UC to bring it out of the dark ages, give women in heterosexual partnerships financial independence and protect victims of domestic violence.
All these changes are an admission that there are serious flaws in UC, and these announcements have come on the same day that DWP have lost yet another high-court battle on UC because the assessment period can clash with payment cycles meaning claimants’ awards vary substantially month to month.
Every day people are moving onto a system that we know is having a devastating impact. The Secretary of State must put a full halt to all movements onto UC and focus on fixing the system.
To have pushed ahead with managed migration under the current circumstances would be both morally and logistically irresponsible. We are pleased that the new Secretary of State has finally listened to our calls and is going to look at fixing the system – it should not have taken this long and five different Secretaries of State to finally sort this out.
We welcome the delay in the vote, however remain seriously concerned about proposals to undertake a pilot managed migration with 10,000 people. Benefit claimants cannot be treated like guinea pigs for a system that we know is failing.
Stakeholders have already made it clear what needs to be changed to improve UC – instead of announcing plans for a pilot, the Secretary of State should be announcing the recommendations of stakeholders she intends to take forward.
The roll-out of UC to areas across Scotland has already seen more people pushed into poverty, debt and destitution - forcing families to rely on food banks and emergency aid just to get by.
The Secretary of State still has a lot of questions to answer: will she start making changes before this so-called pilot migration; what is she doing to protect people who are continuing to lose out on Severe Disability Premium payments as a result of natural migration (and who would have received back-payments if these regulations had gone through); and what is she going to do to protect people living in destitution right now as a result of moving onto UC.

Updated 27 January 2019