Universal Credit implementation: meeting the needs of vulnerable claimants - Work and Pensions Committee Contents

3  Claims and payments

Monthly assessment

52.  Entitlement to Universal Credit will be calculated on a monthly basis. The assessment period will run from the effective date of the claim and each subsequent assessment period will begin on the same date of the month. DWP believes that this approach reflects monthly salaries and explained that "maintaining a consistent assessment period supports our simplicity agenda and also enables us to make consistent payments to claimants". Universal Credit will not normally be paid for a period of less than a month and assessment periods will always be one month in length.P 70F[71]P

53.  The Social Market Foundation commented that there had been little discussion about the potential implications of a rolling assessment and monthly payment in arrears and believed that there were likely to be significant unintended consequences. It explained that "Someone on a weekly wage who is subsequently made redundant could face over a month waiting for their revised Universal Credit payment. Many would have little alternative but to go into debt, with all the potential consequences that can entail".P71F[72]P CPAG pointed out that, if an entitlement ended during an assessment period, the payment for that entitlement would be lost for the entire month and commented that this was "arbitrary and will cause hardship".P72F[73]

54.  The Women's Budget Group highlighted that the principles of monthly assessment had not been discussed in detail during the parliamentary debates on the Welfare Reform Bill and that a clearer picture of the policy and its implications had only emerged on publication of the draft Universal Credit Regulations. It had now become clear that monthly assessment would mean that payments would only be made to claimants with a full month's entitlement (with no pro rata payment for shorter periods). The effect of changes of circumstances on entitlement would be calculated as if they had occurred at the beginning of the month, meaning that some claimants would lose out for the whole month (if the change meant a reduction in entitlement) but others would gain (if the change increased their entitlement). The Group acknowledged that adopting this whole month approach might avoid administrative complexity for the Government and some of the difficulties associated with under- and over-payments of tax credits. However, it was also likely to create difficulties for claimants who were being encouraged to set up monthly direct debits, but who would have difficulty in anticipating in advance the effect of changes of circumstances on their entitlement for the coming month. This was a particular issue for claimants on low incomes, who tended to have very frequent changes of circumstances.P73F[74]

Monthly payments

55.  Universal Credit will be paid on a calendar monthly basis in a single payment per household. DWP explains that this is "to reflect the fact that 70% of people in work are paid wages in this way".P74F[75]P DWP plans to provide budgeting support to help claimants manage the transition to monthly budgeting. It also plans to make provision for some payment exceptions, including making payments more frequently than monthly, making split payments and rent payments direct to the landlord. However, these exceptions are expected to be time-limited, with support being given to claimants to help them make the transition to the standard monthly payments. The qualifying criteria for payment exceptions will be included in formal guidance for decision-makers.P75F[76]

56.  The Centre for Social Justice, which was responsible for the work on "dynamic benefits" which paved the way for Universal Credit, explained the rationale for monthly payments:

Our evidence for Dynamic Benefits found that difficulties in managing the transition from benefits to work included budgeting, and that this could act as a barrier to employment. Where households do struggle to manage a monthly budget, changing the frequency of payments gets to the root of the problem [...] the majority of Universal Credit recipient households will be in work and will be able to manage monthly payments without any problems."P76F[77]P

57.  Many witnesses raised concerns about the proposed move to monthly payments. The University of Bristol Personal Finance Research Centre and the Women's Budget Group summarised some of the issues:

  • monthly payments do not reflect the reality of work for many people, especially those on low incomes who are likely to be claiming Universal Credit;
  • shifting to monthly budgeting would disrupt existing budgeting patterns;
  • people choose to budget over shorter timeframes in order to keep tighter control of a low income and to retain the capacity to respond to unexpected events, not because they have poor financial management skills.

They pointed out that DWP's own research had shown that many would find monthly budgeting more difficult; and believed that the potential risks associated with moving to monthly payments outweighed any benefits.P77F[78]

58.  Advice providers also challenged the Government's assertion that monthly payments were the norm and argued that they did not reflect the world of work for people on low incomes. CPAG said that the move to monthly payments would hinder rather than help claimants to budget effectively and Citizens Advice highlighted the risk that claimants would fall into debt and hardship before they would be able to qualify for a payment exception.P78F[79]P Gillian Guy, Chief Executive of Citizens Advice, described the proposed change as "unrealistic" and "dangerous" because of the risk that people would get into severe debt, be unable to pay priority bills and then turn to pay-day loans and doorstep lenders.P79F[80]P

59.  Local authority representatives believed that the change to monthly payments would be challenging for many claimants and would lead many into debt and budgeting difficulties.P80F[81]P Housing providers agreed that the change would make it more difficult for many to manage their budgets.P81F[82]P The Welsh Local Government Association's view was that "there is a significant risk that pay-day loan companies and loan sharks will be the ones that benefit most from this policy".P82F[83]P The Council of Mortgage Lenders also highlighted concerns about the potential for financial abuse of vulnerable people.P83F[84]P

60.  Support organisations provided examples of particular issues for their clients. YMCA and Barnardo's said that young, vulnerable adults, such as those recently leaving care, often had chaotic lives and very limited budgeting skills and would struggle to manage monthly budgeting.P84F[85]P St Mungo Community Housing Association pointed out that it was still common for many employees to be paid weekly, and said that monthly payments would "put the 45% of our clients who are socially vulnerable at a greater risk of being targeted and exploited financially".P85F[86]P

61.  Professor Mike Brewer of the IFS told us that monthly payments would probably be more costly for the taxpayer because of the support required by claimants to manage the change and the consequences for people who were unable to cope.P86F[87]P Tony Wilson of Inclusion argued that the risk of claimants running up debts and becoming less financially included could undermine the incentive to work. He recommended that the principle of a single monthly payment should be tested on a smaller scale before implementing it for all claimants.P87F[88]P

62.  Witnesses also emphasised the need for budgeting support for claimants if the transition to monthly payments were to go ahead. Some housing providers expressed concern that this would be an additional demand on their services, for which no additional resources would be provided. Halton Housing Trust told us that housing providers had already taken steps to increase their own advice service resources at a time when local services were being cut or significantly reduced elsewhere. It believed that consideration should be given to the provision of ring-fenced resources for advice services to try to ensure that they were not diminished at a time of such substantial change."P88F[89]P The Council of Mortgage Lenders suggested that "Government and others including the Money Advice Service should have a clear role in supporting and advising claimants, backed with appropriate financial commitment".P89F[90]P The Social Market Foundation conducted research on the likely impact of the Universal Credit payment arrangements on the budgeting of low-income families and suggested that DWP should develop a portal to help claimants budget effectively. This would allow them to make changes to the way their benefit money was transferred, before it arrived in their bank account.P90F[91]

63.  Lord Freud acknowledged that weekly or fortnightly wage payments still existed for some, but believed that the "vast majority want to go on monthly and we have to get them ready for that".P91F[92]P The Secretary of State told us that "75% of those in work are on monthly payments and that is a figure that is rising all the time". He believed that difficulty in adapting to monthly payments was currently a barrier to work for the longer-term unemployed.P92F[93]P He explained that the Universal Credit system had been designed for the majority, and that DWP could now start to identify people with particular vulnerabilities and deal with those who have particular problems: "the majority are dealt with, and now we can focus on the minority".P93F[94]P We asked DWP for clarification about the proposed arrangements for claimants who needed more frequent payments and were told that: "for those claimants who we identify as requiring more frequent payments once on Universal Credit, twice monthly payments of 50% of an award will be made seven days after the end of an assessment period and then about 15 days later."P94F[95]

64.  The Women's Budget Group highlighted the problems which might arise from using an "exceptions" service to decide which claimants were "vulnerable" and therefore eligible for more frequent payments and suggested that focusing on monthly payments as the norm might impede successful implementation: "Universal Credit risks getting bogged down in labour-intensive discretionary staff decisions on exceptions, as cases will be assessed on their individual merits with guidance, not regulations".P95F[96]P It recommended that all claimants be given the option of choosing more frequent payments. It also pointed out that the Government would need to clarify the administrative arrangements for more frequent payments, in particular whether the part payment would be in arrears (and so less likely to help claimants avoid hardship) or in advance (and so likely to be subject to adjustment at the end of the month when the relevant circumstances for that month had been confirmed).P96F[97]P The University of Bristol Personal Finance Research Centre agreed with this assessment."P97F[98]

65.  We understand the Government's preference for moving to a monthly payment system for Universal Credit, given that 70% of people in work are paid this way, and this amount is increasing. We accept that monthly payments of Universal Credit will make the transition to monthly salary easier for claimants and improve the position for claimants whose work status fluctuates. However, monthly payment is not the norm for many people on a low income and some claimants will return to weekly payments when they return to work. Budgeting weekly or fortnightly can be an effective way of managing a low income, and is not necessarily a sign of poor money management and monthly payment risks disrupting the existing budgeting methods of some households. Financial literacy training is likely to be expensive to provide and is unlikely to solve the difficulties of managing on a tight budget.

66.   4T We are concerned that the Government's proposed exceptions process will be too slow in identifying people who may struggle to adapt to monthly payments and who may fall into debt or suffer further hardship. We recommend that DWP monitors the impact of monthly payments from the start of the Pathfinder in April 2013 and moves quickly to change its approach if this payment system appears to be creating difficulties for claimants.

Single payment per household

67.  The Universal Credit payment will normally be paid in full into one bank account per household (rather than each partner receiving their own benefit, as is often the case at present). DWP has stated that this single household payment "will enable low-income households to develop a greater responsibility for managing their household budget and support their transition into work".P98F[99]P The Explanatory Memorandum provided with the draft Regulations stated that "It is for [the family] to decide how to manage their finances in a way that best meets the needs of the family".P99F[100]P However, this aim of offering choice appears to be contradicted by establishing a default arrangement where the entire payment is made to one account, with split payments only available on an exceptional and time-limited basis.

68.  The Centre for Social Justice explained that it had found that "claimants want consistency. A choice must be made over whether Universal Credit payments are made on a household basis or on an individual basis." It believed that the benefits of a single household payment outweigh the disadvantages, "which can be mitigated."P100F[101]P

69.  Some witnesses questioned whether the proposed single payment per household would in practice support the Government's objectives of greater financial inclusion and readiness for work. The University of Bristol Personal Finance Research Centre highlighted that, while most potential recipients did not consider that single household payments would be a problem, research had also shown that it could be very problematic for a minority of claimants.P101F[102]P

70.  The Social Market Foundation agreed; in its research "a small number of households expressed real concerns about how the benefit money would be distributed in their house if the money was no longer allocated to specific members of the household". It noted that the draft Regulations included a number of "welcome safeguards", but questioned the evidence base which would be required to invoke payment exceptions in cases of economic abuse or severe financial imbalance. SMF raised three key issues:

  • a single payment could exacerbate the existing tendency for men to benefit at the expense of women from shared household income;
  • when women receive benefits, this is likely to lead to higher expenditure on children and a single household payment could undermine this;
  • a single payment could reduce the exposure of some people to financial engagement which could have negative consequences in the case of separation or bereavement.

It believed that there might be a case for claimants to have a choice of split payments if they felt this would help their budgeting or financial arrangements.P102F[103]

71.  The Women's Budget Group put forward similar arguments. It also pointed out that the issues relating to merging several benefit payments into one tended to be confused with those about whether the full entitlement should be paid to a single person or bank account, and said that "while combining benefits may be key to Universal Credit design, paying it into one account is not". It highlighted the potential gender imbalance of single payments, saying that "women are more likely to be economically dependent, and subject to financial and other abuse [...] The Government says that 'both members of the couple play an equal part in the claim' but this is not the case if only one gets the payment." It also believed that the system of "personalised individual conditionality" which would operate under Universal Credit "does not fit well with a system in which one partner receives no benefit."P103F[104]P CPAG also raised the question of how a couple would be treated if one partner did not accept the claimant commitment (see chapter 6).P104F[105]

72.  The Children's Society expressed concerns about the risk of the child element not being used for the benefit of children if it were not paid to the main carer. It also highlighted potential difficulties for couples in new relationships who would have to relinquish control over elements of their income for which they had previously been responsible, and believed that this would be difficult in the early stages of a new relationship, particularly if partners were responsible for children from a previous relationship. The Association of Directors of Adult Social Services (ADASS) agreed that a single payment would "disempower many women and remove safeguards that payments for children and housing costs are used for that purpose, where one partner in a couple acts irresponsibly".P105F[106]P Alison Garnham of CPAG told us that "What a lot of us are advocating is that couples should just be able to simply choose whether they have split payments or not."P106F[107]

73.  A single household payment may not be suitable for every household claiming Universal Credit and we therefore see disadvantages in insisting that all households receive their benefit this way. There is potential for women to lose out under this arrangement and a risk that money intended for children or for rent will not be used for its intended purpose. We therefore recommend that DWP decision-makers have the discretion to allow payments to be split between two partners in a household, where circumstances make this necessary. This would not conflict with the Government's intention of calculating Universal Credit on a household basis.

Direct payments of housing costs

74.  At present, Housing Benefit is paid directly to social sector landlords, and local authorities have some discretion to make direct payments to landlords in the private rented sector. Under Universal Credit, the default position will be that all housing costs for both social and private sector tenants will be paid to the benefit claimant. The draft Regulations make provision for exceptions to be made for vulnerable people to continue to have their housing costs paid direct to their landlord, but DWP has not yet defined its interpretation of "vulnerable".P107F[108]P Witnesses' concerns focussed on the risks to individual claimants of managing their own rent payments and to landlords of a potentially higher level of rent arrears.

75.  DWP is currently running a number of "demonstration projects" with local authority and housing association partnerships to test how well claimants renting social sector accommodation are able to manage housing benefit monthly payments and to consider the appropriate level of safeguards needed to help secure landlord income streams if tenants fall behind on their rent.P108F[109]

76.  Gavin Smart of the CIH told us that the early results were "encouraging in the sense that landlords are managing to make it work, but it requires a huge amount of additional effort." He highlighted concerns about levels of arrears and bad debts and the impact that might have on the ability of landlords to meet their financial obligations.P109F[110]P Shelter made similar points and argued that it was crucial for the Government to put systems in place to identify tenants who were vulnerable or in arrears so that direct payments to landlords were triggered quickly to avoid arrears building up.P110F[111]P The Council of Mortgage Lenders highlighted the potential combined impact on landlords of direct payments to tenants, the new social sector size criteria and the benefit cap. It believed this might "destabilise landlords' income streams with consequential impacts on lender and investor confidence in the sector, particularly small to medium sized associations".P111F[112]

77.  The National Housing Federation recommended that DWP work closely with social landlords, local authorities and other agencies to work out how to identify and support people who were likely to need payment exceptions, rather than waiting for them to get into debt or crisis. It suggested using as a starting point the existing DWP guidance on vulnerability with respect to claimants of Local Housing Allowance in the private rented sector.P112F[113]

78.  The Convention of Scottish Local Authorities agreed that the change could destabilise the social housing sector and argued that a radical change of this kind needed to be phased in over a much longer timescale than currently planned.P113F[114]P Both the LGA and the Welsh LGA agreed that there was a real risk of rent arrears and increased collection costs as a consequence of direct monthly payment of Universal Credit.P114F[115]

79.  Providers of accommodation for vulnerable people, such as refuges and hostels, were concerned about the potential impact on clients. St Mungo's said that payment of the housing element to its clients could threaten vulnerable people's housing security and the financial viability of supported accommodation providers.P115F[116]P Refuge pointed out that refuges providing short-term emergency accommodation for women and children would become financially unsustainable because many women would already have left the refuge before they had received their housing payment in arrears, and that smaller organisations would have no means of retrieving those arrears.P116F[117]P [The wider issues about housing costs for supported exempt accommodation are discussed in Chapter 4.]

80.  In previous reports on Local Housing Allowance and Housing Benefit reform for tenants in the private sector, this Committee and its predecessor acknowledged that the principle of paying benefits direct to claimants is an important one, but also highlighted that paying landlords directly might increase landlord confidence, enable lower rents to be negotiated and reduce the risk of arrears.P117F[118]

81.  The Secretary of State confirmed that payment exceptions would only be available on a temporary basis for people who met certain criteria:

[...] we make a system for the majority; we then look at what the problems are for the minority. We said all along we need to look very carefully at the trigger points that actually mean someone's simply not coping and temporarily you may need to take that in hand, but at the same time you want to get them back out of that and deal with their problems.P118F[119]

82.  DWP published some early findings from the demonstration projects at the end of October. This showed that 54% of tenants "said they were confident receiving their Housing Benefit payment directly to their own bank account". The DWP press release announcing the findings reported Lord Freud as saying that "These findings show most people on low incomes manage their money well and for most tenants the switch to direct payments under Universal Credit will be straightforward".P119F[120]P

83.  The proposal under Universal Credit to pay the costs of rent to the benefit claimant, rather than direct to the landlord, is a major change to the benefit regime for tenants in the social housing sector and for some in the private rented sector. We note the Government's view that this will contribute to claimants' financial capability. While we recognise that many existing social tenants and most tenants in the private rented sector already pay their own rents, we are concerned that some vulnerable claimants will be unable to manage making regular rent payments and may fall into arrears.

84.  Initial findings from the pilots the Government is running to test the impact of direct payments of housing costs to claimants, the "housing demonstration projects", showed that just over half of tenants surveyed felt confident receiving their housing costs payment direct. Pilots receive additional time and attention both from landlords' staff and from local authorities' housing benefit staff in a way which would not be practical as larger numbers are brought into Universal Credit.  Care must be taken in drawing conclusions from such small-scale pilots.

85.  We believe that the Government's long-term aims for Universal Credit are more likely to be achieved if time is allowed for a proper evaluation of the housing demonstration pilots, followed by a phased implementation of direct payments after appropriate safety net arrangements for vulnerable people have been developed and tested. We therefore recommend that, during the initial phases of Universal Credit implementation from April 2013, claimants who currently have their housing costs paid to their landlord should have the option to continue with this arrangement.

86.  We also recommend that the Government moves quickly to publish a clear definition of "vulnerable" groups within Universal Credit for whom it will not be appropriate to include housing costs in their benefit payment. It also needs to establish a robust process for proactively identifying claimants who are struggling to manage their housing costs so that they can be properly assisted before they fall into arrears and face eviction.

Bank accounts

87.  DWP expects to make the vast majority of Universal Credit payments into a nominated bank account using the BACS system.P120F[121]P Most claimant households will receive all of their monthly benefit entitlement, including their housing costs, in a single sum once a month. They will need to make arrangements to pay their rent and other bills regularly from this amount when previously their budget management might have relied on earmarking different sources of income to cover different living expenses.

88.  DWP says that the Universal Credit payment arrangements are intended to help claimants develop greater financial literacy and prepare them for work and that they will "make it easier for households to take advantage of cheaper tariffs for essential costs such as utility bills. Increased financial responsibility will also allow households to improve their access to affordable credit".P121F[122]P DWP acknowledges that some claimants do not currently have access to a mainstream bank account. It explains that work is underway with a range of banking and financial product providers to make financial services more accessible to low-income households and that it is working with the British Bankers Association and providers of alternative financial products such as credit unions.P122F[123]

89.  Witnesses questioned whether benefit claimants would be able to access banking facilities, and whether the bank accounts available to them would provide appropriate facilities for people managing on a low income. Housing providers were particularly concerned about this, because of the number of social tenants who would be managing their own rent payments for the first time, and the desirability of them having direct debit facilities to do this.

90.  The Council of Mortgage Lenders was concerned that there might be insufficient financial products available to support direct payments to claimants and that claimants might be unlikely to opt for banking products which could assist them in household budgeting and making rent payments direct to their landlords because of the associated charges.P123F[124]P Shelter said that the provision of bank accounts with direct debit facilities would be necessary to enable Universal Credit claimants to manage their rent payments and to support social tenants to handle their rent for the first time. It pointed out that Post Office accounts did not support direct debits, and recommended that DWP continue its work with the banking industry to develop products which would prevent the housing element of Universal Credit being diverted to cover overdraft fees and other direct debits.P124F[125]P The Halton Housing Trust suggested that DWP should support housing providers to encourage and promote bank accounts as the preferred mechanism for benefit payment.P125F[126]P Some housing associations have started providing a financial incentive to tenants to open credit union accounts in order to help protect their rent payments.P126F[127]

91.  The University of Bristol Personal Finance Research Centre estimated that about 1% of households do not have a bank account of any kind and 5% of households do not have a transaction account.P127F[128]P The Social Market Foundation estimated that 1.54 million people have no access to a transaction account and 0.95 million have only a basic bank account.P128F[129]P Barnardo's said that "everyone will need to have a bank account or Post Office account under the Universal Credit regime, yet despite progress, those on low incomes are much less likely to have a bank account than those with higher incomes". It added that the introduction of Universal Credit provided "the ideal opportunity to ensure that more people become financially included by making it easier for people to open bank accounts and by extending the facilities of the Post Office Account Card".P129F[130]

92.  Witnesses also pointed out that some people, particularly those on a low income, chose not to use a bank account because of the risk of incurring charges. The University of Bristol Personal Finance Research Centre believed that "most bank accounts are inappropriate for day-to-day money management by people on low incomes who need to keep close control over their finances". It highlighted a wider problem "of low-income people incurring penalty charges for failed direct debits which far outweigh any cost saving achieved by paying bills by direct debit". P130F[131]

93.  One option which has been discussed in the context of Universal Credit is the creation of "jam-jar accounts". These accounts automatically distribute income to different "pots" within a bank account—for rent, household bills etc—which helps to protect amounts intended to cover specific bills. They can also have facilities to send low balance alerts by text and to move savings into a bill-paying account in order to avoid penalty charges or failing to make a payment. They are intended to remove the risk that banks, if owed interest or overdraft charges, will automatically take money from claimants' accounts when they receive benefit payments, leaving them with insufficient funds to pay their bills.

94.   The Social Market Foundation believed that financial products of this type were likely to be of significant help to those who are ready to engage with mainstream financial services but pointed out that a significant number of people chose not to use banking products to their full potential. Many people deliberately chose to deal in cash and "even assuming that a private market for such accounts is viable (and this seems doubtful), they will not help the whole claimant population, including many of the most vulnerable".P131F[132]P The Women's Budget Group agreed that some people operate in cash because they may not want bank accounts, "partly because of the risk of penalty charges and that banks may not be keen on their business". The Group highlighted that financial products such as jam-jar accounts "are unlikely to suit everyone—or be free".P132F[133]

95.  A research report from Social Finance found that, whilst some jam-jar accounts were available, there was fairly limited take-up, because of issues of price and because providers lacked strong consumer recognition. However, many customers would be willing to pay for a jam-jar account if the fees were lower than those currently available. It suggested that "harnessing trusted consumer brands like the Post Office, third sector providers such as credit unions, retail payment networks like Paypoint and high street banks could help to improve the attractiveness and increase the take-up of jam-jar accounts".P133F[134]P In June this year, the Government announced a further investment of £38 million for credit unions to help them build up their IT systems and infrastructure and so provide a viable alternative to pay-day loans, doorstep lenders and illegal loan sharks, for people on low incomes.P134F[135]

96.  Lord Freud announced during our oral evidence session that the Government was intending to subsidise the development of new budgeting accounts for Universal Credit claimants by up to £140 million, "to make sure that people have the ability to manage their finances and then get support to do so". He added that "we are allowing people to take control of their lives and get rid of the poverty premium that we have imposed on people by giving them dribs and drabs of money, so they can never buy anything".P135F[136]P The Secretary of State explained that the intention was to show people that there were better ways of managing their money.P136F[137]

97.  DWP is exploring the feasibility of making accounts with budgeting tools available to Universal Credit claimants. It states that the key requirement is to ensure claimants have access to a range of suitable financial products including "transaction accounts that will enable claimants to manage rent and bill payments more effectively on a monthly basis through automated transactions such as direct debits and standing orders". It explained that it was looking for a range of diverse providers, including high street banks, mobile phone operators and pre-pay card providers, to express an interest in developing new financial products which would help ensure claimants' essential bills were covered, build up their credit rating and break the cycle of financial exclusion.P137F[138]P

98.  DWP estimates that up to 2.5 million Universal Credit claimants will need additional support to manage their money during the transitional period. It plans to subsidise the cost of financial products for an interim period of one year per claimant as they move on to Universal Credit. After this the claimant might choose to move to a mainstream financial product, or continue to use the budgeting account and pay for it themselves, or their landlord might recognise the value of the budgeting account and pay for it.P138F[139]P

99.  Some potential Universal Credit claimants do not have a bank account. Some witnesses were concerned that these claimants may have particular problems managing monthly payments and housing costs and may be vulnerable to exploitation, particularly from those loan companies and operators charging excessive interest rates. We welcome the Government's support for credit unions, but note that it is likely to be some time until credit unions have sufficient national coverage and capacity to offer a solution to everyone who needs it. We therefore welcome the Government's intention to ensure a range of financial product options are available to claimants. However, it is essential to ensure that any new products provide the same protection for customers as mainstream bank accounts. We note that DWP is proposing to subsidise the first year of customer charges under the proposed new scheme. The Government must assess during that year whether support for subsequent years will also be required, and plan accordingly.

71   Draft Claims and Payment Regulations, Explanatory Memorandum, p 12 Back

72   Ev w175  Back

73   Ev 70 Back

74   Ev 130 Back

75   Ev 90  Back

76   Ev 90  Back

77   Ev w22  Back

78   Ev w149 and Ev 127 Back

79   Ev 70 p2 and Ev 81 p3 Back

80   Q 130 Back

81   See for example Ev 111; Ev w192; Ev w107 Back

82   See for example Ev w130; Ev w65; Ev w39 Back

83   Ev w192  Back

84   Ev w65  Back

85   Ev w202 and Ev w12 Back

86   Ev w165  Back

87   Q 79 Back

88   Qq 73,104 Back

89   Ev w83  Back

90   Ev w65 Back

91   Social Market Foundation, Sink or Swim? The impact of Universal Credit, September 2012, p14 Back

92   Q 241 Back

93   Q 229 Back

94   Qq 222, 234 Back

95   Ev 105 Back

96   Ev 127  Back

97   Ev 130  Back

98   Ev w149 Back

99   Ev 90  Back

100   Draft Claims and Payment Regulations, Explanatory Memorandum, pp 11-13 Back

101   Ev w22  Back

102   Ev w149  Back

103   Ev w175  Back

104   Ev 127 Back

105   Q 127 Back

106   Ev w7  Back

107   Q 127 Back

108   Draft Claims and Payment Regulations, Explanatory Memorandum, p 13 Back

109   DWP Press release, 19 January 2012, "Councils and housing associations to test direct payments of housing cost support" Back

110   Q 43 Back

111   Ev w169 Back

112   Ev w65  Back

113   Ev w130  Back

114   Ev w62  Back

115   Ev w192 and Ev 111  Back

116   Ev w165  Back

117   Ev w159 Back

118   Work and Pensions Committee, Fifth Report of Session 2009-10, Local Housing Allowance, HC 235; and Second Report of Session 2010-11, Changes to Housing Benefit announced in the June 2010 Budget, HC 469, paras 168-180 Back

119   Q 331 Back

120   DWP press release, 30 October 2012 "Freud: Universal Credit switch will be simple for most - but we must prepare early" Back

121   Draft Claims and Payments Regulations, Explanatory Memorandum, p 12. BACS is the Banking Automated Clearing Services, one of the main systems used for electronic processing of financial transactions. Back

122   Ev 90  Back

123   Ev 90  Back

124   Ev w65  Back

125   Ev w169  Back

126   Ev w83  Back

127   Social Inclusion News, August 2012 Back

128   Ev w149 Back

129   Ev w175 Back

130   Ev w12  Back

131   Ev w149 Back

132   Ev w175 Back

133   Ev 127  Back

134   Social Finance, A new approach to banking. Extending the use of Jam Jar Accounts in the UK, April 2011, pp1-3 Back

135   DWP Press release, 27 June 2012, "Freud announces further investment to secure future of credit unions" Back

136   Q 231 Back

137   Q 241 Back

138   Ev 105 Back

139   DWP Press release, 17 September 2012, "Freud: New financial products to help Universal Credit claimants manage money"  Back

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Prepared 22 November 2012