Work and Pensions Committee - Universal Credit implementation: meeting the needs of vulnerable claimantsWritten evidence submitted by Citizens Advice Scotland
Citizens Advice Scotland and its member bureaux form Scotland’s largest independent advice network. CAB advice services are delivered using service points throughout Scotland, from the islands to city centres.
Citizens advice bureaux in Scotland helped clients with over 560,000 new issues in 2010–11—more than 1,500 new issues for every day of the year. Over 230,000 clients brought new issues to a bureau over the year.
In 2010–11, Scottish bureaux achieved a financial gain of almost £126 million for clients based on funding of £16.3 million (including £7.6 million in core funding). This means that CAB clients were better off by £8 for each £1 of funding given to bureaux.
Summary
Universal Credit represents one of the biggest sets of changes to the welfare system since its creation. Its implementation will be a huge challenge not only for the Department for Work and Pensions, but also for the frontline advice services that will support claimants to navigate the new system.
Citizens Advice Bureaux play a key role in the current benefits system and will continue to do so under Universal Credit. In 2011–12, bureaux in Scotland advised on over 78,000 new issues that concerned the benefits that are being rolled up into Universal Credit (almost 300 per working day). As a result of advice provided by bureaux on benefits, the client financial gain in additional benefit entitlement was £63.5 million.
Our key points in this response include:
Frontline free advice services are likely to experience significant demand for advice on making applications for the new Universal Credit. These services, including Citizens Advice Bureaux, must be explicitly included in the implementation of the new benefit and resourced appropriately.
The “digital by default” approach to making a claim for Universal Credit will not be suitable for a significant minority of claimants who may therefore struggle to make an application. Frontline advice services should be provided with resources to support individuals to make online claims.
The proposed arrangements for conditionality and sanctions could cause considerable hardship for claimants. Citizens Advice Bureaux are already seeing clients who have reached crisis point as a result of the sanctions regime. The proposed arrangements will increase the length and severity of existing sanctions and potentially increase hardship for claimants.
The changes proposed in income entitlement of disabled people will benefit some groups but will leave others worse off. The majority of those who are assessed as unfit for work will benefit from Universal Credit, but disabled people who can work or those caring for disabled children stand to be worse off.
In this response, we focus on the following areas of the Committee’s interests:
Proposed arrangements for claims and payments and the provision of support and advice for claimants.
Proposed arrangements for the “claimant commitment”, sanctions and hardship payments.
Changes in income entitlement of disabled people under Universal Credit.
Impact monitoring.
Proposed Arrangements for Claims and Payments and the Provision of Support and Advice for Claimants
All Universal Credit claimants will be initially signposted to the self-service online channel, and other channels will be used as an exception rather than the rule.1 There will be no paper form, but telephone claims may be completed where appropriate. Where online and telephone claims are not appropriate, the DWP will provide face-to-face support to complete online forms in exceptional circumstances.
Under current arrangements, individuals make their claims via a mixture of paper forms, telephone claims, and online claims depending on the benefit involved. Due to a number of factors—including complexity of forms, literacy problems, and health conditions—thousands of people approach Citizens Advice Bureaux every year for help with their applications. In 2011–12, Citizens Advice Bureaux in Scotland helped clients to completed 19,463 benefit forms (75 every working day). We expect that this demand for support with claims will continue and may even rise with the advent of “digital by default” applications under Universal Credit. The following cases show claimants for whom the online application process proved unsuitable and who turned to a Citizens Advice Bureau for support to claim their entitlement. These examples are repeated every day across the country.
A West of Scotland CAB reports of a client who is struggling to apply for JSA. The client’s appeal for ESA was refused and he was advised to apply for JSA. He was told at the Jobcentre that he had to apply for JSA either over the phone or online and that were no other ways to apply. The client cannot apply by phone as he has hearing difficulties and the client has no access to the internet. The bureau advised that the client has a right to make a claim on a paper application form and arranged for the Jobcentre to provide one.
A West of Scotland CAB reports of a client who asked for help as he has been trying to claim JSA for two days without success after he was made redundant the week before. The client went to the Jobcentre and was told that they couldn’t see him and was given a card and told to apply online or to phone the Aberdeen office. The client had been trying to get through on the phone for the previous two days without any answer. He also tried to go online but was unable to get a user name or password to allow him to apply.
We are concerned that the DWP’s focus on online applications may leave a significant minority of claimants behind. A number of sources suggest that claimants in Scotland are less likely to have access to the internet to make an application. The Scottish Household Survey2 found that around a third of households in Scotland do not have access to the internet, with less than half of households with an income of less than £15,000 having access to the internet.
Ofcom recently found that only one in three Scottish households earning less than £17.5k per year had broadband compared to 56% of equivalent households in the rest of the UK. Glasgow has particularly low access to broadband (60%) compared to other UK cities such as Liverpool (77%) and Leeds (86%). OFCOM found that the 45–64 age group in Glasgow had a particularly low level of broadband take-up (35% compared to 79% GB average) as well as the DE socio-economic group (36% compared to 56% average).3 Claimants in Scotland, and Glasgow in particular, are likely to face greater barriers to making an online application for Universal Credit. In turn, this will impact on free advice agencies supporting these claimants.
It is therefore imperative that support is in place to help the thousands of claimants for whom online applications may be inaccessible. In recent DWP research, 45% of participants said that they would need support to claim and manage their claim online.4 Frontline advice services, such as Citizens Advice Bureaux, are likely to be the places where claimants will turn to for support and are ideally placed to provide this support. However, resources must be in place to ensure that advice services are able to meet this demand. We recommend that the DWP works with frontline advice services to ensure they are able to support claimants to make online applications. Advice services are ideally placed to ensure that Universal Credit works for claimants, but must be supported to do so.
Proposed Arrangements for the “Claimant Commitment”, Sanctions and Hardship Payments
The proposed arrangements for conditionality and sanctions could cause considerable hardship for claimants. Citizens Advice Bureaux are already seeing clients who have reached crisis point as a result of the sanctions regime. The proposed arrangements will increase the length and severity of existing sanctions and potentially increase hardship for claimants.
In 2011–12, clients sought advice on over 1,850 new issues relating to JSA conditions, sanctions and hardship payments at Citizens Advice Bureaux in Scotland. Many of the clients seeking advice on these issues had reached a crisis point where the disruption to their income as a result of the sanction had left them in a desperate situation. A number of these clients had incurred “minor” sanctions of two weeks which meant that they were not entitled to hardship payments to help them cope.
In a number of the cases in which claimants were given sanctions for a minor failure they fell into financial difficulties very quickly and required referrals for food parcels. Figures from bureaux in Scotland show that the number of clients that have required a charity referral has more than doubled over the last two years.
A West of Scotland CAB reports of a client who is reliant on food parcels that he is receiving from local churches. The client is currently homeless and recently received a sanction of two weeks to his JSA claim after missing a signing on date for the second time this year. The client cannot claim a hardship payment or Crisis Loan, so the bureau referred the client for a food parcel. The client approached the bureau two weeks later as he still has no money, cannot afford to travel to the Jobcentre, and is now reliant on food parcels to survive.
A West of Scotland CAB reports of a client who was sanctioned for missing an appointment at the Jobcentre. The client was volunteering and forgot about the meeting. The client has been refused a Crisis Loan and has been told that he does not qualify for a Hardship Loan as his sanction is for 14 days (it needs to be for 15 days or more to qualify). The bureau arranged for the local church to deliver a crisis bag to the client.
A number of clients report that they have received sanctions when they feel that they have met the conditions of the benefit. The individual may therefore be experiencing hardship for a situation that was not their fault.
An East of Scotland CAB reports of a client who was sanctioned for two weeks for not showing sufficient evidence that he was looking for work, despite the fact that he has been attending training that will allow him to work in the construction industry. The Jobcentre was aware that he was attending the training. The client received no notice of the sanction and only found out when he discovered that there was no money in his account. The client has no money or food and is due to have his son stay with him at the weekend. The client has already borrowed money from a friend, but has run out of options. The bureau arranged for a food parcel to be sent to the client and have put in an appeal against the sanction.
An East of Scotland CAB reports of a client who was receiving JSA but has been told by JCP the information written down by him in his “looking for work diary” was insufficient to merit the continuation of his benefit. He was therefore sanctioned and his benefit stopped. The client was not given much chance to speak in his defence and there were entries in his diary for the period in question but they may have been missed by the official. The client has been able to live with a friend for a few days, but is now looking for free sources of food.
The UK Government’s Welfare Reform Act gives Jobcentre advisers the authority to impose longer sanctions on JSA claimants. Under these changes, the most serious failures—including failure to accept a reasonable job offer, failure to apply for a job or failure to attend a mandatory meeting—will lead to a cease in payments for four weeks for the first failure, and 13 weeks for second or subsequent failures within a 52 week period.5 It is likely that these changes will lead to an increased number of people experiencing financial hardship.
We recommend that clear guidance and training is provided to Jobcentre Plus staff to ensure that they only impose sanctions in appropriate circumstances and that they are able to recognise where claimants will be put into significant hardship where sanctions are imposed. The DWP must make hardship payments available where it is clear that claimants and families are experience hardship. Charitable food parcels should not be made to be the default route for claimants unable to afford food due to a sanction.
We are also concerned about the experience of former Incapacity Benefit claimants under JSA conditionality. An estimated 36,000 existing IB claimants in Scotland will be transferred to JSA following their reassessment for ESA.6 These claimants, who are likely to still be affected by the illness/disability that previously made them unable to work, may find the conditionality and sanctions regime difficult to manage after years away from the workforce. It is imperative that these claimants are supported in their claim rather than punished through sanctions that may have the effect of driving them away from the workforce.
Changes in Income Entitlement of Disabled People under Universal Credit
The changes proposed in income entitlement of disabled people will benefit some groups but will leave others worse off. However, it is worth noting that the ongoing reassessment of sickness benefit claimants will result in far fewer claimants being entitled to additional support for their disability/illness than has been the case until relatively recently.
Between 2011 and 2014, an estimated 115,000 Incapacity Benefit claimants in Scotland will lose entitlement to sickness benefits. More than half (65,000) will be moved out of the benefits system altogether with most of the remainder (36,000) eligible for Jobseekers Allowance (JSA).7 So while the Universal Credit provisions suggest an increase in payments to those with a limited capability for work, it must be noted that far fewer claimants will be entitled to these payments.
In June 2012, Citizens Advice England and Wales published the Disability and Universal Credit report,8 which examines the likely impact of the new benefit on disabled children, adults and their families. The report found that whilst some disabled people will gain from the new system, many disabled people will get very significantly less help because some of the additional support in the current system will not be provided to the same degree in Universal Credit. The report commented that the scale of the cuts in support for some groups of disabled people has not yet been properly understood.
Key issues in the report include:
Reduced disabled child additions: under Universal Credit, the support provided to families with disabled children will be reduced from £57 to £28 per week. The Government estimates that this will affect around 100,000 disabled children
Abolition of the severe disability premium: the Government is abolishing the severe disability premium which gives additional care to disabled adults who receive middle or higher rate DLA (care) and live on their own. This will cost disabled adults with no one to care for them around £58 per week.
Cuts to support for working disabled people: the disability element of Working Tax Credit is worth £54 a week in recognition that many disabled people have a reduced earning potential and are unable to work full-time. This support will not be replicated in Universal Credit apart from those who would qualify as not fit for work.
The report recognises that there will be additional support for disabled adults in the support group for Employment and Support Allowance (ESA). This is in part paid for by the reductions explained above. This will benefit many adults who are unfit for work, but a minority will be worse off. This increase in support comes at the expense of other disabled people are fit for work but still need to cope with extra costs and barriers that their condition may entail.
Impact Monitoring
It is fundamentally important that the impact of significant benefit changes on vulnerable claimants is monitored from the outset. It is our experience that key outcomes have not always been measured under previous benefit reforms. For example, the number of sickness benefit claimants finding employment after being found fit for work under Employment and Support Allowance (ESA) was not initially monitored, despite being the key aim of the welfare change. A number of outputs were recorded, including the results of the assessments, but not the final outcome for the claimant. It is essential that outcomes rather than just outputs are monitored.
We suggest the following outcomes, based on the points raised in our response, should be monitored under Universal Credit:
The impact of increased sanctions on jobseekers, including whether this had a positive effect on employability and whether sanctions lead to increased demand for charitable support.
The impact of Universal Credit on claimants with disabilities or illness who are fit for work. Analysis of the regulations suggest that these claimants will be worse off under Univeral Credit although it is difficult to estimate the scale of this loss of support.
The number and type of claimants that struggle to make an online application for Universal Credit. It is imperative that the DWP has an understanding of the difficulties that claimants may experience in the online process so that they can ensure that there are no claimants that slip through the net.
For more information, please contact Keith Dryburgh, Social Policy Officer, at keith.dryburgh@cas.org.uk or on 0131 550 1015.
References:
1 DWP, Explanatory Memorandum for the Social Security Advisory Committee, http://www.dwp.gov.uk/docs/uc-pip-claims-payments-draft-regs-2012-memorandum.pdf
2 Scottish Government, Scotland’s People: results from th 2009/10 Scottish Household Survey, http://www.scotland.gov.uk/Resource/Doc/997/0121124.pdf
3 Ofcom, Communications Market Report 2012, http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr12/CMR_UK_2012.pdf
4 DWP, Work and the welfare system: a survey of benefits and tax credits recipients http://research.dwp.gov.uk/asd/asd5/rports2011-2012/rrep800.pdf
5 DWP, The Jobseeker’s Allowance (Sanctions)(Amendment) Regulations 2012, http://www.dwp.gov.uk/docs/jsa-sanctions-draft-regs-2012-memorandum.pdf
6 Centre of Regional Economic and Social Research (Beattie and Fothergill), Incapacity Reform: the local, regional and national impact, http://www.shu.ac.uk/_assets/pdf/cresr-final-incapacity-benefit-reform.pdf
7 Centre of Regional Economic and Social Research (Beattie and Fothergill), Incapacity Reform: the local, regional and national impact, http://www.shu.ac.uk/_assets/pdf/cresr-final-incapacity-benefit-reform.pdf
8 Citizens Advice England and Wales, Disability and Universal Credit, http://www.citizensadvice.org.uk/index/policy/policy_publications/er_benefitsandtaxcredits/disability_and_universal_credit.htm
17 August 2012