Universal Credit: managed migration Contents

2Balance of risk: the requirement to make a new claim

14.The Regulations require people who are subject to “managed migration” to go through essentially the same application process for Universal Credit as new claimants and those subject to “natural” migration. They are expected to make a new claim, verify their details and identity, and then wait for five weeks for their first payment.

15.Respondents to the SSAC’s consultation highlighted the requirement for claimants who were subject to “managed migration” to make a new claim as a risk to the success of the process. Claimants may simply fail make a new claim, or may not be able to access the support they need to make a claim. Data released under a Freedom of Information act in May 2018 showed that one in five UC claims were closed without payment being made due to “non-compliance with the [UC] process”: for example, the individual failing to book or attend an initial interview with Jobcentre Plus.19 The Department has yet to fill in the practical detail of how it will address this risk. In its report, the SSAC said that this was “not managed migration as many people had expected”.20 In a blog post on the Social Security Advisory Committee’s website, Sir Ian Diamond wrote:

We are concerned that other aspects of the proposals load an unreasonable level of risk onto the claimant. We fear that, in too many cases, they may be adversely impacted by the proposals or fall out of the social security system entirely.21

16.The SSAC subsequently expressed a strong view that “the responsibility for ensuring that claimants are migrated safely to Universal Credit rests with the Government”.22 Victoria Todd reiterated to us in evidence that the SSAC “very much [feels] that the risk should be more on the Department” She told us that the “main way” that the Department could minimise the risks of migration would be to permit “automatic claims” for UC amongst legacy benefit claimants. This would enable them to move onto UC directly, removing the risk of dropping out of the system.23 In turn, it could minimise the risks to local authorities and landlords associated with tenants building up rent arrears.

Pre-population of data

17.The Department already holds data about claimants of existing benefits in order to check their entitlement and to pay them. It seemed to us, therefore, that it ought to be possible for the Government itself to transfer claimants without asking them to make a new claim for Universal Credit. We asked the Minister of State for Employment, Alok Sharma MP, and Neil Couling, Director General, Universal Credit Programme, why this was not possible. The Minister explained that there were two limitations: that the information needed for a Universal Credit claim might be different from the data that the Department already holds about a claimant, and that past attempts at transferring existing data had resulted in the underpayment of benefits—most notably for claimants moved from Incapacity Benefit to Employment and Support Allowance.24

18.The SSAC also pressed the Government to reconsider the requirement for claimants to make a new claim from scratch. It recommended that:

[ … ] the Department conduct a careful segmented analysis of the claimant groups who will be manage migrated so that any scope for dispensing with the need for a claim can be identified and acted upon. This analysis should be published. Where a claim for Universal Credit is unavoidable, we recommend that the Department pre-populates as much of the digital claim form as possible. Claimants should not be expected to produce data that the Department already holds, particularly if it is information that has been verified and is unlikely to have changed.25

19.The Government’s response to this recommendation was that it agreed “to explore options”. It identified some instances in which it would “use existing decisions or verification to make aspects of the process easier”. It gave reusing existing Work Capability Assessment decisions, or identity verification associated with tax credit claims, as examples of where it might be able to do this.26 On the wider question of the requirement to make a new claim, however, the Government maintained that “it will be crucial that new claims are made to Universal Credit”. It said that this was necessary for two reasons:

20.Responding to the SSAC’s recommendation that the Department pre-populate as much of the digital claim form as possible, the Government reiterated that “there is a high risk that the data may be incorrect. This could result in confusion and may lead to delays to payments.”28 The Government said that it would “continue to explore options for elements of pre-population, and will provide an update in due course.”29

21.We asked Sir Ian Diamond whether he was concerned to hear that the quality of the Department’s data about claimants was so poor that it could not be relied upon. He told us:

I am not surprised, but disappointed, but I do not personally—and I stress this is a personal view—accept that the managed migration of Universal Credit should be a reason to clean data.30

Expanding on this, he explained:

The Department has not said this, but if you were saying, “We cannot migrate people because the data are not clean and this would enable us to get a clean set of data”, I do not think at any level that fits within the principle that Victoria [Todd] highlighted earlier, that the risk should be with the state, not the individual.31

22.Sir Ian Diamond recognised the Government’s concerns about the accuracy of its data, but questioned whether requiring a new claim was the only, or most suitable, way to address these. He suggested, for example:

One issue is that currently, with multiple benefits, an individual may not have updated all their records. In my view, we have technology now that quite simply allows us to merge data. In the situation where the state holds more than one piece of information, this seems entirely reasonable to go and check which one is right.32

Victoria Todd expressed disappointment that the Department did not seem to be willing constructively to engage with the SSAC’s suggestions for alternatives to the requirement for a new claim. She told us:

When we had the meeting where these regulations were presented to the Committee, we asked [the Department] some questions around, “Why are you requiring people to make new claims?” We got five reasons why that was the case. What we did in the report was try to put forward solutions that would address the concerns of the Department but also reduce the risk on claimants. I would say we are still disappointed that they have taken that off the table because the regulations do not allow for that automatic transfer.33

23.It is the Government’s policy to transfer claimants to Universal Credit. It is only right that the Government, and not the individual, should shoulder the risk of that transfer. But the requirement for people on existing benefits to make a new claim for Universal Credit places the risk squarely on the claimant. We are not persuaded by the Government’s arguments that it is simply impossible for it successfully to transfer claimants using existing data, or to pre-populate digital claim forms. We have seen no evidence from the Government to support its assertion that it cannot transfer claimants directly from legacy benefits to Universal Credit using existing data—especially vulnerable claimants, those not expected to look for work, and those whose circumstances are unlikely to change.

24.We recommend that the Government accept the recommendation of the Social Security Advisory Committee to conduct a segmented analysis of the claimant groups who will be subject to “managed migration”, with a view to identifying circumstances in which it does not need to require people to make a new claim. This analysis should be published.

Additional payments of legacy benefits (‘run-ons’)

25.The need for people to make a new claim for Universal Credit means that they will have to wait at least five weeks from their application before they receive their first UC payment. Respondents to the SSAC’s consultation expressed concerns about the impact that five weeks without income would have on claimants. The Trussell Trust told the SSAC that:

The delays in claiming the first payments has led to an increase in debt, rent arrears, caused problems with budgeting and increased issues with mental health. There was even a case of an eviction when housing payments were missed. This also seems to be disproportionately detrimental to families with children. One respondent explained how it had affected his family, saying “I have fallen in arrears with my rent, my mental health has deteriorated immensely and having young children, it has been difficult”, with another respondent saying that it “[m]essed me and my family up so much, wanted to give kids up so they g[e]t food, [I] couldn’t cope.”34

26.People claiming Universal Credit are eligible for an Advance Payment to cover the waiting period. But the Advance Payment is a loan, and repaying it can exacerbate existing debt problems. SSAC noted that there was growing evidence that “whilst alleviating an immediate financial crisis, it defers problems over a longer time-frame”. They identified that over the period that the Advance Payment is recovered, “rent arrears may continue to accrue, some people may continue to rely on food banks and other sources of help, and financial hardship is likely to persist.”35

27.People who claim Housing Benefit and who move to Universal Credit, whether naturally or under the managed migration process, are eligible to receive Housing Benefit for the first two weeks after they make their claim for Universal Credit. This is known as “run-on”. Responding to the SSAC’s report, the Department announced that it was introducing additional run-ons for income-related Jobseeker’s Allowance, Employment and Support Allowance and Income Support.36 This means that claimants in receipt of those benefits will be eligible to receive an additional, non-repayable payment while they wait for their Universal Credit. The run-ons are limited to two weeks’ worth of benefit, meaning claimants will then have to wait at least three further weeks for their UC payment.

28.We asked the Government to provide more information about how the run-ons would work in practice for claimants, and in particular to provide worked examples to illustrate what would happen.37 The Secretary of State said simply that “the ‘run-ons’ will work in a similar way to the Transitional Housing Payment”. She said that it was not possible to provide worked examples “because this would very much depend on an individual’s own circumstances and benefit combination, as well as their payment dates and the interaction between this and the date that they claim UC.”38 The Department has previously provided such examples for other run-ons, however: in March 2016 it published a note illustrating how the Housing Benefit run-on will apply to different types of claimants, which included worked examples.39

29.The run-ons will not come into effect until July 2020. Testing of managed migration, however, will begin in the second half of 2019. The revised Regulations therefore include the power to make discretionary payments to migrating claimants who experience hardship. The Department’s response to the SSAC stated that “this will allow the Department the discretion to provide financial support to claimants who migrate ahead of the run-on commencing where this is needed to avoid hardship”.40 It is not clear how the Department will identify and define hardship or calculate the level of payment needed to ameliorate it. The Department’s response to our questions about how it will ensure that claimants subject to managed migration before July 2020 would benefit consistently from the additional support provided by discretionary payments was similarly unilluminating:41

In the draft regulations, there is a provision for a Discretionary Hardship payment. The Department plans to use these payments to provide consistent support for the claimants who will be managed migrated as part of the testing phase.

30.Sir Ian Diamond, Chair of the SSAC, described this as “a hole in the regulations as they stand”.42 Victoria Todd, a member of the SSAC, said:

What is unclear at the moment—and perhaps you might ask the Department—is the run-on does not start until July 2020 for both managed migration and natural migration. We are not entirely clear why that is the case. There is a discretionary power in the regulations to make payments to people to avoid hardship during the testing phase of migration. I suppose that could be used in a similar way to provide some payments to people, but that is a discretionary power and we do not have any detail on how that would work.43

31.The Department’s decision to introduce new run-ons for claimants transferring to Universal Credit from July 2020 is hugely welcome. But it does not cover all benefits: tax credit claimants will not receive run-ons of those benefits. And it supports claimants for only two weeks of their minimum five week wait for Universal Credit. The Government has also refused to give us any detail about how these run-ons will work for claimants in practice. We recommend that the Department extends run-ons to all legacy benefits that Universal Credit replaces. We further recommend that the Government publish a set of worked examples showing how claimants in different scenarios will be affected by its changes to the run-ons. This should include, but need not be limited to: single claimants with and without disabilities and in and out of work; and couples, especially where they are receiving different benefits (for example, where one is receiving ESA and the other JSA) or have different employment statuses.

32.Claimants who migrate—either “managed” or “naturally”—before July 2020 will not receive the new run-ons. The Government has not explained why this is the case. There is instead provision in the draft Regulations for discretionary payments for these claimants. The Government has failed to provide us with any detail about how these will work. This is, in itself, a major concern. But we are also concerned that the Department will not have the opportunity to test the run-ons during what is supposed to be the “test and learn” phase. Run-ons are a central part of the Department’s strategy for mitigating the effect of the five week wait for payment. Its understanding of how effectively they do so is currently largely theoretical. We recommend that the Department must not proceed with migration on a large scale until it knows in practice whether run-ons deliver the support that claimants need. We therefore recommend the Department start the run-ons from the beginning of testing of managed migration.

33.Run-ons may prove to be invaluable in helping claimants bridge the gap from applying for Universal Credit to their first payment. But they are ultimately a sticking plaster over Universal Credit’s fundamental design flaw: the five week wait for payment. The Department should eliminate the wait for claimants moving to Universal Credit via managed migration, many of whom will have little or no financial backstop to tide them over. It should use this as a basis for considering how the wait could be reduced for claimants migrating naturally, and for new claims.

Rolling out managed migration

34.The Department has not yet given details on how the rollout of managed migration will progress. For example, it could choose to migrate claimants by geographic area or Jobcentre, mirroring the approach taken to rolling out the full service. Alternatively, it might choose to migrate by claimant group. SSAC’s report on the Regulations did not make recommendations on which approach would be most suitable. It recommended, however, that “an initial stage of testing should cover a range of different practical ways of moving people onto Universal Credit”. It also recommended that:

‘Dummy runs’ featuring claims in a cross-section of claimant scenarios–including those identified in vulnerable situations–should be evaluated with necessary adjustments being made before actual migration begins.44

35.The Department’s explanatory memorandum to SSAC explained that the lack of detail in the Regulations on this point is deliberate. They are intended to be “flexible enough to allow changes to the managed migration process without the need to make further legislative changes”, and “to cater for the diverse needs of the different claimant groups that will be moved to UC”.45 The decision on how to proceed with rolling out managed migration on a large scale should instead be informed by its pilot from 2019.

36.DWP has yet to set out the detail of how it will migrate claimants to Universal Credit—whether by geographic area, or by claimant group. Managed migration is new ground for the Department. It should not assume that its previous approach to rollout (by Jobcentre) is necessarily the right one for migration. We recommend the Department use its pilot to test different approaches to rolling out managed migration. In particular, it should work with stakeholders to identify and test approaches that limit both stress on claimants, and demands on its own workload. It should consider, for example, using existing intervention points such as the renewal of a tax credit claim or expiry of a Work Capability Assessment to prompt migration, rather than migrating claimants on an arbitrary timetable.

21 Professor Sir Ian Diamond, Universal Credit: addressing the risks of managed migration, SSAC blog, October 2018

23 Q 916–917

24 Q 768

26 Ibid.

27 Ibid., p.10

28 Ibid., p.11

29 Ibid., p.11

30 Q 942

31 Q 943

32 Q 922

33 Q 941

39 DWP, Housing benefit circular, March 2018

42 Q 940

43 Q 939

Published: 22 November 2018