Welfare Policy in Northern Ireland Contents

Conclusions and recommendations

The mitigation package

1. The mitigation package in Northern Ireland reflects the fact that special circumstances can justify different treatment. The clearest example is the impact of the Social Sector Size Criteria (“bedroom tax”). In Northern Ireland, less than a fifth of social housing has only one bedroom but nearly half the people who need social housing are single tenants. Without mitigation in place, claimants in Northern Ireland would be penalised for the lack of suitable social housing stock, which evidently lies outside their control. The mitigation package is not, however, a long-term solution to underlying problems within the social security system. Whilst special circumstances can justify different treatment, by the same token claimants in similar circumstances in different parts of the UK should ultimately level up to similar levels of entitlement.(Paragraph 16)

2. Overall, the welfare reform mitigation package in Northern Ireland has been a success. Automatic payment of Welfare Supplementary Payments has ensured that claimants receive the payments they are entitled to, although the requirement that claimants must appeal a decision to trigger some disability-related mitigation payments could be better advertised and explained to claimants. While other policies could have been addressed by the mitigation package, there will always be a trade-off between mitigating the largest overall financial losses and providing targeted support to the most vulnerable. The Working Group’s original proposals struck a good balance between these objectives.(Paragraph 43)

3. We recommend that, if PIP mitigation payments continue, the Department for Communities clearly outlines the different triggers for mitigation payments to claimants in decision letters, to enable them to make an informed decision about their claim. (Paragraph 44)

4. A large amount of the funding allocated for the mitigation package has not been spent. The single main reason is that the Cost of Work Allowance was never implemented. This was because there was no Executive and Assembly in place to do so. This is not, however, true of all the areas of spending. The budget for Discretionary Support Awards and the Universal Credit Contingency Fund is likely to have been underspent because of their restrictive eligibility criteria. The current criteria are out of line with practice in the other devolved administrations, and—in the case of the UC Contingency Fund—require claimants to take on debt before they can access help.(Paragraph 45)

5. We recommend that the criteria for Discretionary Support Awards are made less restrictive. In particular, a specific income ceiling for Discretionary Support Awards should be removed, in line with practice in Wales and Scotland. The requirement that claimants must take out a Universal Credit advance before being eligible for grants from the Universal Credit Contingency Fund should also be removed.
(Paragraph 46)

Effect of the mitigation package ending in 2020

6. The ending of the mitigation payments in March 2020—in particular, the ending of Social Sector Size Criteria and benefit cap mitigations—would mean that tens of thousands of households in Northern Ireland would see their incomes suddenly fall, some by hundreds of pounds per month. The impact on households would be exacerbated by the fact that many people simply would not be expecting the payments to end. Support organisations in Northern Ireland have rightly described this prospect as a “cliff edge”. None of the special circumstances that justified the mitigation package have changed in the last four years.(Paragraph 65)

7. We recommend that the mitigation package is extended after March 2020, for a further four years. This should include the SSSC (“bedroom tax”) and benefit cap mitigations, disability-related mitigations already in payment, and DLA to PIP transition mitigation for 16 year-olds. We also recommend that the Department for Communities consider rolling over the contract for independent advisory services after 2020.(Paragraph 66)

Options for continuing the mitigation package

8. Paying “bedroom tax” and benefit cap mitigations through Discretionary Housing Payments would be operationally extremely challenging. This is not surprising, given that around 35,000 claimants might be expected to apply for DHPs in a short period of time, through a system not designed to handle this volume of claims. The fact that such payments would be discretionary, rather than automatic, risks some claimants slipping through the net. Using DHPs is, however, the only plausible and legal means of continuing the two main mitigations without legislation from Westminster—and clearly preferable to the mitigation payments stopping altogether. Even so, the serious risks to claimants and the amount of money that would have to be spent on making changes to the DHP systems that could otherwise to be used to help claimants, should make clear to the UK Government that it has a responsibility to avoid this option having to be used.(Paragraph 76)

9. We recommend that, in the continuing absence of an Executive and only in the event of the necessary legislation failing to be put in place, the Department for Communities continue to pay “bedroom tax” and benefit cap mitigations through Discretionary Housing Payments. The Department for Communities should also, in response to this report, set out its plans for how it would make claimants aware of the need to apply for payments in the event that mitigation payments were made through DHPs. (Paragraph 77)

10. We accept that legislation to extend the mitigation package falls within devolved legislative competence. However, the circumstances surrounding the package ending are clearly exceptional: a potential drastic impact on vulnerable people and no Assembly to extend the legislation. Whilst restoring the NI Executive is rightly a priority for the Secretary of State, this does not preclude taking action when circumstances require it. There are clear precedents for the UK Government legislating to continue payments, and political consensus that the main parts of the mitigation package should continue. There is therefore no good reason why the UK Government cannot bring forward legislation to extend the mitigation package.(Paragraph 85)

11. The Department for Communities has said that it would need to start contacting claimants in Autumn 2019 if the mitigation package was not to continue. The UK Government must therefore act quickly to end the uncertainty—for the Department for Communities, but most of all for claimants in Northern Ireland.
(Paragraph 86)

12. We recommend that the Secretary of State for Northern Ireland make a statement to Parliament as soon as possible making clear the UK Government’s intention to pass legislation to extend the mitigation package, and bring forward such legislation to come into effect before the end of March 2020. The UK Government should provide funding for the mitigation package—including the Discretionary Support Scheme, the Universal Credit Contingency Fund, and funding for independent advisory services—in a Northern Ireland Budget Act. (Paragraph 87)

Universal Credit in Northern Ireland

13. Despite the Government reducing the overall waiting period for Universal Credit from six weeks to five, the waiting period is still too long, creating financial difficulties for claimants and encouraging them to take on debt. This is not a problem specific to Northern Ireland: it is a flaw with the design of Universal Credit. It is welcome that the Secretary of State for Work and Pensions recognises these problems and wants to ensure that claimants receive their first payment as soon as possible. The Work and Pensions Committee will be monitoring how the Department delivers on this commitment.(Paragraph 96)

14. Fortnightly payment of Universal Credit in Northern Ireland has worked well, making it easier for low-income households to budget. However, claimants receiving fortnightly payments continue to receive monthly statements, which inevitably causes confusion and potential anxiety. We welcome that DWP and the Department for Communities recognise this problem. We doubt, however, that the Department for Communities’ proposal to include on monthly statements an explanation that payments will be made fortnightly will prove adequate. Fortnightly statements would be considerably clearer for claimants. We recommend that Universal Credit claimants in Northern Ireland receiving fortnightly payments also receive fortnightly statements. (Paragraph 103)

15. Fortnightly payment of Universal Credit in Northern Ireland has worked well, making it easier for low-income households to budget. However, claimants receiving fortnightly payments continue to receive monthly statements, which inevitably causes confusion and potential anxiety. We welcome that DWP and the Department for Communities recognise this problem. We doubt, however, that the Department for Communities’ proposal to include on monthly statements an explanation that payments will be made fortnightly will prove adequate. Fortnightly statements would be considerably clearer for claimants. We recommend that Universal Credit claimants in Northern Ireland receiving fortnightly payments also receive fortnightly statements. (Paragraph 103)

16. The advantages of fortnightly payment of Universal Credit in Northern Ireland would apply equally to claimants in England and Wales. Since the fortnightly payment pattern is applied automatically in Northern Ireland by the Universal Credit IT system, we can see no reason why DWP cannot replicate it in other areas of the UK.(Paragraph 104)

17. We recommend that the Department for Work and Pensions give claimants in England and Wales the option to receive fortnightly payments of Universal Credit, with fortnightly statements.(Paragraph 105)

18. We welcome the commitment of the Department for Communities to address the problem of residual and technical rent arrears that build up as a result of migration to Universal Credit and the payment flexibilities in Northern Ireland. We recommend that the Department for Communities set out in detail, in response to this report, the work it is currently doing to address the build-up of tenant arrears, and its plans for any future work in this area.
(Paragraph 113)

19. We welcome the commitment of the Department for Communities to address the problem of residual and technical rent arrears that build up as a result of migration to Universal Credit and the payment flexibilities in Northern Ireland. We recommend that the Department for Communities set out in detail, in response to this report, the work it is currently doing to address the build-up of tenant arrears, and its plans for any future work in this area.(Paragraph 113)

20. The delay in automating the UC flexibilities in Northern Ireland—such as direct payments to private landlords and batch payments to social landlords—has required labour intensive processes that inevitably result in higher levels of error. The Department for Communities expect the automations to be completed within 18 months. It is important that there is no further delay. We recommend that the Department for Work and Pensions work with the Department for Communities to ensure that the planned automations of UC flexibilities in Northern Ireland are in place within 18 months.(Paragraph 114)

21. The delay in automating the UC flexibilities in Northern Ireland—such as direct payments to private landlords and batch payments to social landlords—has required labour intensive processes that inevitably result in higher levels of error. The Department for Communities expect the automations to be completed within 18 months. It is important that there is no further delay. We recommend that the Department for Work and Pensions work with the Department for Communities to ensure that the planned automations of UC flexibilities in Northern Ireland are in place within 18 months. (Paragraph 114)

22. The experience of Northern Ireland shows that offering split payments of Universal Credit on request is not enough to encourage and enable uptake by those who most need it. The Scottish Government’s planned implementation of UC split payments is an opportunity for the Department for Work and Pensions and the Department for Communities to learn what approach would work best.(Paragraph 126)

23. We recommend that the Department for Work and Pensions and the Department for Communities evaluate the implementation of split payments in Scotland to assess what model would work best in the rest of the UK, including Northern Ireland. In the meantime, the Department for Communities should work with claimant support organisations to advertise the option to receive split payments more widely. (Paragraph 127)

24. We recommend that, in response to this report, the Department for Work and Pensions set out what further work they have done to ensure that Universal Credit payments go to the main carer in households with children. (Paragraph 128)

The two-child limit in Northern Ireland

25. The British Pregnancy Advisory Service has recently said that it is aware of cases in the UK where the two-child limit “has been a factor in a woman’s decision to end a third, unplanned pregnancy”. It therefore appears—regardless of the legal situation in Northern Ireland—that Government policy may be putting women in a situation where they decide to terminate a pregnancy because of a lack of financial support.(Paragraph 139)

26. Despite the guidance from the Attorney General and the Department for Communities, the reporting requirements in section 5(1) of the Criminal Law (NI) Act remain an obvious barrier to women applying for the non-consensual exception in Northern Ireland, and place professionals in an unacceptably risky position. While the two-child limit continues to apply in Northern Ireland, this anomaly must be addressed urgently.(Paragraph 145)

27. We recommend that, in the continued absence of an Assembly and Executive, the Secretary of State for Northern Ireland bring forward proposals to address the anomaly of section 5(1) of the Criminal Law (NI) Act applying to women seeking the non-consensual exemption, and to professionals processing it. This should be a priority for any incoming Northern Ireland Executive. (Paragraph 146)

28. The evidence we heard leaves us deeply concerned about the financial impact of the two-child limit on families in Northern Ireland, who are disproportionately affected by the limit compared to families in other areas of the UK. It has also highlighted how the limit may discriminate against particular communities, especially Catholic communities. We therefore call on the Government to halt the implementation of the two-child limit in Northern Ireland and to reimburse any families who have been affected thus far, pending a full investigation into its financial impact on families with children and the potential discrimination against those with larger families and poorer communities. Historically in Northern Ireland, there have always been larger families than in the rest of the UK. Any benefit restriction on the number of children discriminates particularly adversely against families in Northern Ireland.(Paragraph 147)

Monitoring welfare policy in Northern Ireland

29. The Northern Ireland Audit Office has an important role to play in reporting on the implementation of Executive objectives. In the absence of an Assembly, this scrutiny is more important than ever. Addressing poverty and deprivation is a clear and explicit objective from the 2016 draft Programme for Government. The implementation of measures to achieve this deserves urgent scrutiny by the NIAO.(Paragraph 152)

30. We recommend that the Northern Ireland Audit Office urgently prioritise work on the effectiveness of measures to reduce poverty in Northern Ireland, and whether there is a “policy gap” in addressing poverty in NI. As part of this, it should report on the broader context, including the main drivers of poverty in NI. (Paragraph 153)





Published: 9 September 2019