Esther McVey MP has announced further concessions to plans that will see millions of low-income households moved from ‘legacy benefits’ to the Government’s troubled Universal Credit scheme.
In a statement made in the House of Commons main chamber on Monday, detailing the Government’s plans for “managed migration” to Universal Credit, the Work and Pensions Secretary said she has listened to “the genuine concerns raised about the support we were offering people”, including recommendations from the Social Security Advisory Committee (SSAC).
She said: “We will put an extra £1.7billion a year into work allowances, increasing the amount that hardworking families can earn by £1,000 before Universal Credit is tapered away – providing extra support for 2.4million working families.”
“And, we have gone further – recognising the genuine concerns raised about the support we were offering people, especially to the most vulnerable, when they move to Universal Credit.
“So we have made a further £1billion package of changes, providing 2 additional weeks of DWP legacy benefits for those moved onto Universal Credit – a one-off non-repayable sum that will provide claimants with extra money during the period before they receive their first Universal Credit payment.
“And this is on top of the 2 additional weeks of Housing Benefit announced at Autumn Budget 2017, and put into place this year.”
Perhaps the largest change is that new claimants will now only have to wait three weeks to receive an initial payment, rather than the minimum five weeks waiting period that attracted a great deal of condemnation.
She added: “And we will support the self-employed moving to Universal Credit. We will open up a 12-month grace period before the Minimum Income Floor is applied, supporting 130,000 self-employed claimants.”
Laying out plans for the final and most difficult stage of the Universal Credit roll-out, Ms McVey conceded that more needed to be done to support some groups.
“We will support those in debt by reducing the normal maximum rate at which debts are deducted from Universal Credit awards, from 40% to 30% of Standard Allowances.
“This will help over 600,000 families to manage their debts at any one point when roll out is complete – providing them with, on average, £295 extra a year as their debts are repaid over a longer period.”
The managed migration regulations will also “protect 500,000 people’s Severe Disability Premium at the point of migration”, she said, and “deliver Transitional Protection for those we move, to ensure that at the point of moving, those manage migrated have their entitlements protected”.
McVey continued: “And we have changed a key part of the regulations, which charities have raised with me, my department and MPs. Which relates to the minimum statutory notice period for people moving from their legacy award to Universal Credit.
“We have extended this period from a minimum of 1 month to a minimum of 3 months – to allow claimants maximum time to prepare and make their claim before their legacy award expires.
“Alongside this, we have unlimited flexibility to extend claim periods for people who need it.
“We will also backdate any claimant who has missed the deadline date, but has made a claim within a month of the deadline day passing.
“And we will test a variety of communications methods, including advertising campaigns, face to face communication, letters, texts, telephone calls and home visits.”
Responding to McVey’s statement, a spokesperson for the Disability Benefits Consortium (DBC), a collaboration of more than 80 UK charities and disabled people’s organisations, said: “DBC is pleased that Ministers have listened to the serious concerns raised by the disability sector over ‘managed migration’ and have taken action to address some of these.
“We welcome the Secretary of State’s desire to work with claimants and charities to improve the process as well as the announcement that disabled people will have a longer time to make a Universal Credit claim before their legacy benefits are terminated.
“However, the ‘stop start’ approach remains and large numbers could still fall through the gaps. We would like to see an orderly process of migration, whereby claimants remain on their “legacy benefits” until a UC claim is in place
“Furthermore, much work is needed to ensure that the application process is accessible and appropriate support is available to complete what is a very complex process.
“Finally, the Government cannot escape the fact that close to a million disabled people will be worse off on UC by more than £200 a month despite the measures announced in the budget and we would like to see these losses reversed.”
David Finch, Senior Fellow at the Resolution Foundation, said: “The final phase of the Universal Credit roll-out, which will involve around two million families moving from one benefits system to another, is the biggest challenge yet facing the government’s flagship welfare reform.
“Its progress has been significantly eased by the welcome measures announced in the Budget, including higher Work Allowances and the rolling-on of key benefits to prevent significant waits between payments.
“The Secretary of State’s relaxation of hard deadlines within which families must complete a claim is also encouraging. But challenges remain.
“The good news is that with the final phase now not starting until late 2020, there is still plenty of time for the government to make further improvements.
“The government must increase the share of claims that are paid in full and on time, and improve the treatment of self-employed workers, to ensure this difficult final phase of the roll-out delivers for those that Universal Credit was created to support.”
Universal Credit merged six benefits and tax credits into one single monthly payment.