Written evidence submitted by Royal National
Institute for the Deaf
SUMMARY
RNID believes that the government's proposals for
Universal Credit offer an opportunity to reform a welfare system
that has become overly complicated, but we are concerned that
its universalism may result in a system that fails to respect
or incorporate diversity and that is inflexible around the vast
array of different needs that those in receipt of Universal Credit
will have.
The proposals are marked by a lack of detail throughout,
leading us to have concerns about the lack of assessment of the
practical implications that the introduction of Universal Credit
will have on those who will be in receipt of it. We believe that
any resulting legislation will require the highest level of parliamentary
scrutiny.
In our analysis we have drawn attention to a number
of unanswered questions specifically as they relate to the needs
of people with hearing loss, and we draw the Committee's attention
to these.
We would welcome the opportunity to give oral evidence
to the Committee on this issue.
ABOUT US
We're RNID, the charity working to create a world
where deafness or hearing loss does not limit or determine opportunity
and where people value their hearing. We work to ensure that people
who are deaf or hard of hearing have the same rights and opportunities
to lead a full and enriching life. We strive to break down stigma
and create acceptance of deafness and hearing loss. We aim to
promote hearing health, prevent hearing loss and cure deafness.
RNID welcomes the opportunity to contribute to the
Select Committee's Inquiry into Universal Credit. Our response
will focus on key issues that relate to people with hearing loss.
Throughout this response we use the term "people with hearing
loss" to refer to people who are deaf, deafened and hard
of hearing. RNID is happy for the details of this response to
be made public.
COMMENTS
1. RNID believes that there is a pressing need
to simplify a benefits system that has grown bloated in size at
the same time as it has become incomprehensibly complex. We are
aware that many of the proposals outlined by the coalition government
are designed to reduce complexity and simplify the system, but
we are concerned that doing so may also serve to harm the interests
of people with hearing loss.
2. Universal Credit has been designed to combine
many existing out-of-work benefits and tax credits into one system,
though Disability Living Allowance (DLA) will remain separate.
We welcome the explicit understanding of DLA as providing resources
for people to meet the extra costs of being disabled and the need
for this vital source of income to remain separate.
3. There will be a basic allowance (similar to
current levels of Jobseeker's Allowance) with additional amounts
for disability, caring responsibilities, housing costs and children.
There will be lower rates for younger people, as is currently
the case. We welcome the implicit recognition that people with
additional barriers to work face a more significant labour market
penalty, but are concerned to know what specific provisions will
be made for disabled people, and how, for the purposes of Universal
Credit, disability will be defined and recorded.
4. By using a single Marginal Deduction Rate
of 65%, people who are claiming Universal Credit whilst in work
will be able to keep 35p of every pound that they earn if they
are earning below the tax threshold, (24p of every pound for basic-rate
taxpayers). This means that someone working at the National Minimum
Wage rate of £5.93 per hour would take home £2.08 per
hour if they were below the income tax threshold and £1.42
per hour if they pay basic level tax. RNID doubts that such a
small return will encourage many people to move into paid work,
especially when work-related costs are taken into account. We
believe that as an extra incentive for people to take up poorly-paid
part-time jobs, some contribution should be made to the costs
of transport to and from work.
5. Some groups, including people with disabilities,
will be allowed to earn more money before the deductions are triggered.
These earnings disregards will be based on personal circumstances.
Depending on circumstances, disabled people's households would
be able to earn between £2,080 and £7,000 per year before
having their earnings reduced. RNID is keen to understand what
the bases for these figures are, and how different barriers to
participation, such as hearing loss, will be measured. We are
also concerned that the calculation of the levels of earnings
disregards will take account of housing costs, which may mean
that many people who receive support for paying housing costs
will only receive the minimum disregard, further minimizing the
incentive to work.
6. Housing costs will be included in the Universal
Credit calculations, similar to levels of Housing Benefit. This
component will be paid direct to claimants rather than to landlords.
RNID welcomes the release of this money to the individual and
believes that it could help to drive out much of the fraud in
the Housing Benefit system that is perpetrated by landlords.
7. Universal Credit will include a fixed amount
of money to cover the costs of bringing up children. The levels
and structure of support for disabled children is still under
consideration. Likewise, the options for providing support for
childcare under Universal Credit are still under consideration.
RNID would like to see more detail about the structure of support
for disabled children, especially those with complex needs. We
would also like to see explicit mention of the needs of disabled
parents and the extra support that they need in raising a family.
8. The level at which a household can receive
Universal Credit will be subject to the recently announced cap
on household benefit payments in the Spending Review. However,
as announced, Disability Living Allowance recipients will be exempt
from this cap. RNID is pleased with this latter announcement,
but fears that many people with hearing loss may, following forthcoming
reform, lose access to DLA and face the cap on household benefits
while still having to meet the extra costs they face in daily
life.
9. The White Paper proposes a single progression
to higher levels of conditionality based upon individual circumstances,
with conditionality increasing as people are deemed more able
to take on paid work. This means that disabled people in the Work-Related
Activity Group of Employment and Support Allowance will have to
take greater steps to engage with work than under the current
arrangements. People in the Support Group of ESA will have no
conditions placed upon them. While we agree that a level of conditionality
has a place at the heart of the modern welfare state, the conditions
imposed should be proportionate with the support provided by the
system. This is particularly true of groups where there is clear
evidence that they face significant external barriers to finding
employment. People who are deaf, for instance, are five times
more likely to meet the International Labour Organisation's definition
of unemployment ie unemployed and actively seeking work.
10. Additionally, partners of benefits claimants
will also face a degree of conditionality by having to attend
work-focused interviews. RNID seeks clarification as to whether
this will extend to disabled partners, either of disabled or non-disabled
claimants.
11. Under Universal Credit, conditionality may
not cease when an individual enters work, rather it could be based
upon moving people on to undertake more work as appropriate to
their circumstances. As children grow up, or health conditions
improve, individual circumstances will change and people will
be reassessed as to the expectations the system places on them.
RNID agrees that there should be encouragement for people to take
on more work where appropriate. Our concern here is that people
who are only able to take on smaller parcels of part-time employment
are not expected to exceed their capacity for work. Note must
also be taken of the capacity for employers to increase the hours
worked by their employees, and we would like to see guarantees
that people are not pressured to leave existing employment in
order to satisfy the conditions of their benefit entitlement.
We are also keen to learn how this more fluid and flexible approach
to work will be reflected in Work Programme, and how employment
service providers under that system will be rewarded for finding
part-time work for clients.
12. We note that decisions as to eligibility
and conditionality could be made with more devolved discretion
to account for differences at a local level. This would involve
greater flexibility for local Job Centre Plus advisers to make
specific conditions apply to claimants, such as mandatory training
or attending interviews more frequently. We agree that there are
significant differences at local levels that will affect an individual's
ability to gain and retain paid work. We do not believe that localized
changes to eligibility would be fair, but would like to see a
system of differing levels of conditionality applied according
to a range of local or regional factors. These may include the
local labour market, local transport infrastructure and local
availability of child care.
13. Advisers will also be able to refer people
to Mandatory Work Activity, which would see the claimant being
required to work a full week in order to receive their benefit
for up to four weeks. RNID does not believe that this activity
should ever be seen or be used as a punishment or sanction, and
we are aware that similar schemes in the United States have had
the effect of driving people away from the welfare system. We
have a number of questions that remain unanswered about this proposal:
- How will the work undertaken differ substantially
from the work undertaken as part of community service?
- Will disabled people be asked to participate?
- Has the government carried out a separate impact
assessment to ascertain the possible impact upon vulnerable groups,
such as disabled people?
14. The current sanctions regime will be toughened
before the introduction of Universal Credit with an incremental
series of sanctions imposed on people who do not meet the conditions
of benefit receipt. Failure to comply with the conditions of receiving
benefit could result in the loss of 100% of benefit for until
the claimant re-engages with the regime, plus a further fixed
minimum period. The toughest sanctions (loss of benefit for three
years), for people on Jobseeker's Allowance only, would apply
to people who refuse to accept a reasonable job offer, fail to
apply for a job or fail to attend Mandatory Work Activity. RNID
recognises that recent and forthcoming changes to disability benefits
mean that many more people who are deaf or hard of hearing will
be potentially subject to such sanctions. With more disabled people
being expected to claim Jobseeker's Allowance, care must be taken
by decision-makers when applying them, and any sanctions regime
must be transparent and must include a readily available appeals
system. Evidence from the United States shows clearly that as
conditionality increases and sanctions become harsher, more people
opt to leave the benefits system altogether. RNID is concerned
that this pattern may materialize in the UK, and wants to see
the government undertake to provide information on what happens
to benefits claimants when they leave the system.
15. With Universal Credit being applied to households
rather than to individuals, we are concerned that any sanctions
that are applied will have a detrimental effect on families who
could end up facing severe financial penalties for the actions
of one individual. We do not believe that this is a fair way of
enforcing sanctions, and believe that only the individual transgressor
should face a penalty under such circumstances.
16. Under the plans outlined in the White Paper,
people will be able to make a single application for all major
entitlements. This will require the development of an integrated
system that works across the DWP, HM Revenue and Customs (HMRC)
and Local Authorities. Universal Credit will be calculated on
a household basis, with one household member identified as the
"claimant". This person will be responsible for all
contact with DWP administrators. RNID is concerned that these
plans may run the risk of disempowering those household
members other than the designated "claimant". This could
see disabled people (and many women) lose access to their main
or only source of independent income. We would seek clarification
as to how this policy is aligned with the government's stated
support of greater choice and control for disabled people.
17. A new IT system will be developed based on
existing technology. This would involve a customer management
system that would gather evidence and assess entitlement and a
system that brings together entitlement calculations and information
on income. HMRC is investigating the development of PAYE2 which
would collect real-time income data that could form part of this
system along with existing BACS payments as used by DWP. It is
intended that these systems would combine to create real-time
data that would negate the need for customers to notify changes
of income, making the system more responsive to fluctuations in
income and movement in and out of work. This would also resolve
the issue of overpayments that have plagued the Tax Credits system.
We believe that this system has significant attraction, and welcome
any development that makes the welfare system more responsive
and flexible.
18. There are concerns that the PAYE2 system
may suffer from the poor quality of data. HMRC must work with
employers to ensure that they submit timely and accurate data
to a far greater degree than at present. This is particularly
important when greater numbers of staff undertaking part-time
work may increase the data burden on employers.
19. The move to a real-time earnings system would
necessitate that Universal Credit is paid monthly rather than
fortnightly, as is the case with most benefits at present. Low-income
households may not find it easy to operate on a monthly basis,
and we would like to see more flexibility in the payments system
as well as the provision of financial advice. Fortnightly payments
for some households may serve to reduce the risk of increasing
demand on the Social Fund for emergency payments.
20. The vast majority of claims and future contact
between DWP and claimants would be online. There would be additional
support available by telephone and some facility for face-to-face
contact for those who need it. The Government hopes that this
reduction in administrative complexity and move to an integrated
computer system would serve to provide accurate data in one place,
reducing the chances for official and customer error and fraud.
RNID would like to see greater opportunity for people with hearing
loss to request and receive alternative forms of communication
with DWP staff.
21. Stricter and swifter penalties will be applied
to people who are found guilty of defrauding the benefits system.
In addition, a £50 penalty will be imposed on people who
fail to notify a change of circumstances. We agree that even small
amounts of fraud are unacceptable and should be targeted, but
are concerned that the imposition of such a penalty is likely,
under the proposed arrangements, to impact upon an entire household,
including any children, for the actions of one individual claimant.
December 2010
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