2Universal Credit entitlements
5.Disabled people can come to claim UC in three ways:
a)New claims. In areas where the UC full service is available, no new claims to legacy benefits are permitted. The full service is due to be available in all Jobcentre Plus offices by December 2018.15
b)“Natural” migration, where an existing claimant’s circumstances change and they have to reapply for benefits. They can only claim UC, rather than legacy benefits.
c)Migration from a legacy benefit without a change of circumstances. DWP refers to this process as “managed migration”.16 The Department intends to begin this process on a pilot basis from mid-2019, and to move to scale from 2020. It should be complete—and with it UC fully rolled out—by 2023.17
The way that people come onto UC affects how much benefit they receive. People who go through managed migration will be eligible to receive transitional protection. This should ensure that their UC award is, at the outset, at least equal to their existing benefit entitlements.18 Claimants who begin new claims or who “naturally” migrate due to a change of circumstances are generally not eligible for transitional protection. This can mean that they receive less under UC than they did, or would have, under the legacy system.
6.The UC application process is essentially the same for all three routes.19 Assuming all processes are completed correctly, claimants should receive their first UC payment five weeks after completing their claim. In August 2018, 16% of claimants did not receive their full UC award on time in full, and 11% did not receive any payment at all on time (see Figure 1).20 The National Audit Office (NAO) reported that claimants whose award includes an additional amount for a health condition or disability are particularly unlikely to receive their full payment on time after the initial five week wait. Only one in three (33%) claimants whose award included an additional amount for disability received their full payment in time at the end of 2017; up from just one in twenty at the start of the year.21
Figure 1: Universal Credit (new claims) not paid on time
Source: DWP Universal Credit official statistics, Table 6.1, November 2018
7.The Department attributes the large proportion of late payments for disabled claimants to those claimants frequently experiencing long waits for a Work Capability Assessment (WCA)—an assessment of their capability to work.22 In March 2018, the median wait from application to receiving a WCA decision was 17 weeks.23
8.WCAs are delivered by the Department’s external contractor, Maximus, under a contract due to expire in 2019/20.24 Our previous inquiry into PIP and ESA assessments considered the quality of service that the Department receives from its contracted assessment providers.25 It noted the NAO’s conclusion that the transition between the previous contractor, Atos, and Maximus, had been rushed. This had led to “missed opportunities to improve contracting arrangements” and a “largely reactive approach to managing contractors’ performance”.26 Maximus subsequently struggled to meet DWP performance targets, and only managed to meet all of its targets in May 2018.27 The NAO recommended that the Department must undertake much more detailed preparatory work in advance of Maximus’s contract expiring. This should include building a clear understanding of what standards of service it requires from assessment providers and the costs of providing that service.28 Witnesses to this inquiry suggested this should include stipulating shorter target timescales for completing assessments.29 We concluded that the Department must then consider whether the market is capable of delivering the service and, if it cannot, whether assessments might be better delivered in-house.30
9.The Department has made welcome progress on paying Universal Credit on time in recent months. But one in eight claimants still do not receive their benefit on time and in full. One in ten receive nothing at all on time. Disabled people fare even worse. Just a third of new claimants whose award includes an additional amount for disability receive payment on time and in full.
10.The Department says that the delays in paying disabled claimants are down to long waits for Work Capability Assessments. But assessments are carried out by the Department’s own contractors. They are within the Department’s gift to fix. It has a choice: it can either take steps to reduce the wait for an assessment, or find a different way for claimants to provide evidence of their disability while they wait for an assessment.
11.We recommend that as part of its preparatory work for the expiry of the Work Capability Assessment contract the Department investigate the cost of bringing target times for Work Capability Assessment turnarounds down: for example, to no longer than a month from referral. We also recommend it devise an interim solution to ensure that disabled claimants are not left without vital income while awaiting an assessment. For example, it could allow disability amounts of UC to be paid on production of a valid Fit Note stating that they are unable to work.
“Managed” migration
12.The Department is due to pilot moving claimants from legacy benefits to UC from mid-2019—a process it calls “managed” migration. It anticipates moving around 10,000 claimants between then and mid-2020. It will start requiring claimants to migrate in larger numbers from mid-2020.31 Managed migration is due to be complete—and UC fully rolled out—by the end of 2023.32 The Department estimates it will eventually migrate 2.09 million households—2.87 individuals—via this process.33 ESA claimants are the single largest claimant group within the managed migration caseload. The Department estimates that 36% of all people—745,000 people—who go through managed migration will be ESA claimants.34
13.The Department set out its approach to managed migration in draft Regulations published in June 2018.35 The publication of the Regulations was accompanied by the launch of a consultation on managed migration by the Social Security Advisory Committee (SSAC). The consultation concluded in August 2018. SSAC’s report was published and the revised draft Regulations laid in Parliament on 5 November 2018.36
14.Currently the Department is seeking approval for Regulations covering the entirety of “managed migration”: the pilot stage, from mid-2019 to mid-2020, and the subsequent acceleration. On 6 December 2018 the House of Lords Secondary Legislation Scrutiny Committee (Sub-Committee B) (SLSC) published its report on the draft UC Regulations.37 The report expressed concern that once the draft Regulations are approved, there will be no scope for Parliament to further influence the programme. The SLSC concluded that although DWP’s plans for “managed migration” are “well intentioned”, they are also currently “vague and aspirational”. They continued:
Given the large number of unknowns, and the particular difficulty and risks involved in transferring three quarters of a million very vulnerable claimants to Universal Credit, it seems that DWP may have acted prematurely in seeking such extensive powers. We welcome the Department’s intention to consult representative groups in formulating their arrangements, but consider that those plans should be far more developed before Regulations permitting the full conversion to Universal Credit are put before the House.
The SLSC’s report concluded that the Department should consider splitting Regulations covering the pilot phase from those covering the subsequent period. It said:
Splitting the regulations should not require any significant delay to the DWP’s programme; it would simply create a pause in 2020 to allow the results of the pilot to be evaluated before Parliament gives its agreement for the remainder to be migrated.
15.The Department has argued that it is necessary for Parliament to approve the existing Regulations before the end of this year in order to provide transitional payments to people who are currently receiving Severe Disability Premium (SDP).38 This corrects a problem of the Government’s own making. The SLSC was not persuaded, however, by the Government’s argument that “the various elements [of the Regulations] are ‘inextricably linked’”.
16.The Department is committed to carrying out a “pilot” of “managed migration”, involving 10,000 claimants, from mid-2019 to mid-2020. The Regulations currently before the House require Parliament to agree not just to this pilot, but to the subsequent acceleration of “managed migration”. We recommend, in line with the House of Lords Secondary Legislation Committee, that the Department seek Parliamentary approval only for the 10,000 person “managed migration” pilot and the Severe Disability Premium transitional protections. It should lay further Regulations for the acceleration of “managed migration” only when it has clearly and publicly set out its findings from the pilot and how these will be incorporated into the process.
The process of managed migration
17.The Department plans to require people who are being moved on to UC to make a new claim. Legacy benefit claimants will receive a letter inviting them to make a new application for UC. The letter will also set a “deadline day” at least three months in the future by which they must apply.39 During the intervening notice period claimants will receive communications from the Department reminding them to apply. The Department intends to test using a “variety of communications methods” during the 2019–20 pilot phase and has committed to providing information in accessible formats.40 The initial Regulations permitted claimants who missed their deadline day to apply to have their UC award backdated and their transitional protection retained in some, very limited circumstances.41 Following SSAC’s consultation, the Department agreed to revise the Regulations so that all claimants who miss their deadline day will be able to have their UC award backdated and retain transitional protection if they apply within a month of the deadline.42 Witnesses told us this revision is very welcome.43 It is not clear from the Regulations or the Department’s accompanying response to SSAC what steps—if any—the Department will take to contact those claimants who miss their deadline.44
18.Mind, the mental health charity, told us that people at risk of failing to apply in time are likely to include the most vulnerable claimants.45 If the Department does not manage to identify those people and support them effectively during the migration notice and subsequent “grace period” then they risk losing transitional protection, or being left without any benefit payments at all. Sir Ian Diamond, Chair of SSAC, similarly told us that those most at risk from the Department’s approach to migration were “people who have been on benefits often for some time [and] for whom there was very little safety net of any sort”. He told us it is especially important that they are not “allowed to fall out of the benefit system through a lack of support” during migration.46 Given the risks inherent in the Department’s approach—even with improved safeguards—several organisations, including SSAC, questioned the extent to which it constitutes a “managed” migration at all.47 Victoria Todd, a member of SSAC, told us that the migration process “needs to minimise the risk on claimants” as they move from legacy benefits to UC. She explained that currently, SSAC believes that risk “should be more on the Department”, especially in making sure that claimants’ legacy benefits do not stop before they have made a successful claim for UC.48
19.The Department has said that it will ensure there is flexibility in the process for claimants identified as “vulnerable”. Its response to SSAC said that “agents will check for evidence of complex needs or vulnerability” amongst claimants who have failed to apply for UC before stopping their legacy benefits.49 This means that DWP’s ability to support claimants effectively through the migration process will hinge on its ability to identify vulnerable claimants.50 SSAC reported that it was not clear how the Department would go about this task. London Councils and the National Housing Federation both told SSAC that there was a key role for local authorities, housing associations and councils in helping the Department identify vulnerable claimants.51 Such organisations—as well as support organisations such as Citizens Advice—will often already be aware of claimants’ circumstances and vulnerabilities. SSAC reported “considerable frustration” amongst those organisations, however, that, as late as summer 2018, the Department had “not yet started to engage with them on the plans for the managed migration process”.52
20.The Public Accounts Committee (PAC) found that the Department is not able to systemically identify and monitor the progress of vulnerable people, including those with disabilities or mental health conditions, who have started the UC claim process.53 This is because it does not collect data that would enable it to do so. Our inquiry on Benefit sanctions noted, for example, that there is currently no marker for disability or health conditions within UC applications.54 The Minister explained that instead of gathering data systematically the Department is working on developing a “text mining” approach, using data entered by Work Coaches into claimant journals to build a picture of claimant vulnerabilities.55 Legacy benefit claimants would not be included in this approach, however, since the journal is part of UC. Neither would people who have started a claim but not yet met with their Work Coach. Furthermore, as PAC observed:
This approach is reliant on the text that Work Coaches write in a claimant’s journal, and will not provide the Department with clear data to allow it to measure what challenges certain vulnerable groups face or how well its solutions are working for them.56
Witnesses therefore emphasised that simply saying that the migration programme will contain safeguards is not enough.57 As Victoria Todd explained: “having that safeguard is one thing”, but “being able to deliver it and having the information they need to be able to do that is entirely another”.58
21.So-called “managed” migration will see over a million ESA claimants move onto Universal Credit. Amongst them will be some of the most vulnerable claimants the Department supports: people who have been on benefits for long time, have little in the way of a safety net, and have severe disabilities and health conditions. The Department says that it will safeguard claimants moving from ESA to Universal Credit. But it has provided next to no detail on how it will deliver those safeguards and ensure no one’s benefits are stopped before they have made a successful claim for Universal Credit.
22.The Department intends, throughout the process of moving claimants from legacy benefits to Universal Credit, to identify people who are “vulnerable” and provide extra flexibilities and support to them if necessary. But it does not collect data that would enable it to do this consistently, and its engagement with front-line organisations that could help it do so has so far been limited.
23.We recommend that throughout the pilot stage for managed migration the Department trial different ways of systematically collecting data on claimant vulnerability. Given the lack of data it holds currently, this should begin from the principle that all former ESA claimants who do not manage to claim by the deadline that the Department sets them are vulnerable. We also recommend that the Department immediately begin its engagement with local authorities and support organisations such as Citizens Advice over the design of “managed” migration and their role in it. This should include planning for how support services—such as Universal Support—will be promoted to claimants and funded through managed migration.
24.We recommend the Department build its capacity to identify existing Universal Credit claimants who have potentially complex needs. This might include, for example, introducing a marker for disability and health conditions under Universal Credit. It should not be limited, as the Department’s current “text mining” approach is, to analysing the information that claimants choose to divulge to their Work Coach and that the Work Coach decides to record. We also recommend the Department shares, in response to this report, any internal assessment carried out of its “text mining” exercise.
25.We further recommend that the Department share with the Committee, and with Citizens Advice, the existing data that it holds on claimant vulnerabilities and its plans for developing and further sharing this as managed migration rolls out.
ESA underpayments
26.In March 2018, the NAO published a report on errors in ESA payments dating back to 2011. It found that the Department had underpaid approximately 70,000 people who had transferred to ESA from other benefits (such as Incapacity Benefit). The average underpayment is likely to be £5,000, with the Department owing an estimated total of £340 million to affected claimants.59 In July 2018, the former Secretary of State for Work and Pensions told the House that the Department had agreed to pay arrears to all claimants affected, backdated to when they moved on to ESA.60 The Department is in the process of identifying those claimants affected, contacting them, and arranging to make back-payments. It plans to complete this work by the end of 2019.
27.The Department is currently in the process of reviewing cases where it has underpaid ESA claimants and correcting them. It plans to complete this process by the end of 2019: six months after it will start to pilot “managed migration”. To avoid creating further complication and confusion amongst claimants, we recommend the Department does not start to migrate ESA claimants until the process of reviewing and correcting ESA underpayments is complete.
Severe and Enhanced Disability Premia
28.Disabled claimants of some means-tested benefits are eligible to receive top-up payments to help with additional costs associated with a disability or health condition. Under the legacy system disabled people may be able to claim:61
a)The Severe Disability Premium (SDP). The SDP is worth £64.30 per week for single person households or £128.60 per week for couples where both partners are eligible. It is paid to severely disabled adults who do not have a paid for carer. This usually means that they live alone, with dependent children, or with another disabled adult.
b)The Enhanced Disability Premium (EDP). EDP is worth £16.40 per week to single person households and £23.55 per week to couples where at least one person is eligible.
29.Most claimants of SDP and EDP qualify for them by being in receipt of income-related ESA. To be eligible for SDP, claimants must also receive other qualifying benefits: usually either the Personal Independent Payment (PIP) daily living component or the Disability Living Allowance (DLA) care component at the middle or higher rate. EDP claimants must receive either the PIP daily living component at higher rate, or DLA care component at the higher rate.62 The Department estimates that there are 500,000 people receiving SDP.63
30.Neither the SDP nor EDP exist under UC. New UC claimants and people who lose their transitional protection due to a change of circumstances will not be able to claim or reclaim SDP or EDP. The Department’s 2011 Equality impact assessment of UC stated that its intention in removing SDP and EDP was to “recycle the savings” from abolishing the top-ups. Specifically, it would enable people in the Support Group equivalent in UC to claim an additional amount “that is substantially higher than the current Support component in ESA” (see Box 1). It said that this would offer additional help to “the most severely disabled” people.64 The UC “limited capability for work related activity” (LCWRA) component—the equivalent of the ESA Support Group component—is more generous than the benefit it replaces. It will be increased in value by around £38 per week, to be worth £76 in 2018.65
Box 1: ESA and Universal Credit payments for disabled people
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People who undergo a WCA receive different amounts in benefits, depending on the outcome of the assessment. Claimants who are “fit for work” would receive Jobseeker’s Allowance under the legacy system or the “standard allowance” under UC. Claimants who have “limited capability for work” would be placed in the ESA-Work Related Activity Group (WRAG). This means they have been assessed as unable to work now, but are expected to take some steps to prepare for work. The UC equivalent is the Limited Capability for Work group (LCW). Claimants who have “limited capability for work-related activity” would be placed in the ESA Support Group or the UC Limited Capability for Work-Related Activity group (LCWRA). They are not expected to take any steps to look for work. |
31.We heard that, while the increase in payments for the LCWRA group is welcome, it does not fully address the impact of removing SDP and EDP.66 This is because:
a)While the overall amount paid to a UC claimant in the LCWRA/Support Group is typically higher than it would have been had they claimed ESA with EDP, it is lower if the claimant had received the SDP as well. The Children’s Society supplied us with a worked example, reflecting their particular concerns about the impact of the change on young disabled people (see Box 2).67 Citizens Advice explained that “net impact for somebody who would qualify for the SDP and LCWRA element is that they can be over £180 a month worse off than they would have been in the legacy system”.68
b)People in the UC equivalent to the ESA Work-Related Activity Group—the Limited Capability for Work (LCW) will not benefit from the recycled savings. A new, lower rate of ESA—set at the same level as JSA—for new WRAG claimants and their UC equivalent was introduced in April 2017.69 The Department’s Equality Impact Assessment of this change stated that it would be offset by greater support to help disabled people in this group into work.70 Scope, the disability charity, however pointed out people in receipt of LCW have been assessed by the Department as too unwell to work at present.71 Those claimants will not benefit from the additional money for LCWRA claimants unless they are subsequently moved to the LCWRA group.72
Box 2: Worked example: entitlements under Universal Credit and the legacy system
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Tom is 22 and has applied for ESA under the legacy system as a result of a serious illness. During the assessment phase he receives ESA of £58 (the young person’s rate of personal allowance). Following the assessment, Tom is found to be unfit for work-related activity and is placed in the Support Group. Since he is no longer in the assessment phase, his personal allowance increases to £73. He also receives the Support component of ESA worth £38, and EDP of £16. Tom also receives the mid-rate care component of DLA. As he lives alone and doesn’t have a carer looking after him, he is entitled to receive SDP worth £64 per week. This gives him an overall ESA entitlement, under the legacy system, of £191 per week. Under UC, Tom would receive a total of £134: comprising a standard allowance of £58 plus a Limited Capability for Work-related Activity amount of £76. He would not be able to claim SDP or EDP top-ups. This is £57 per week less than he would have received under the legacy system (this would be £42 less if he was 25 or over, since he would receive the over 25 rate of standard allowance under UC). |
Source: The Children’s Society
32.In a written statement in June 2018, the former Secretary of State for Work and Pensions, Esther McVey MP, announced new measures to protect the benefit entitlements of existing SDP recipients.73 These included:
- Ensuring that SDP claimants only move to UC under managed migration. This means that they would be entitled to transitional protection and should not be left worse off at the point of moving over.
- On-going and backdated payment to claimants who have already migrated “naturally” and have lost access to SDP as a consequence, if they would have remained eligible under the legacy system.
Witnesses including the Child Poverty Action Group and Citizens Advice welcomed the steps that the Government has taken to ameliorate the loss of SDP and EDP for existing claimants.74 They and others noted, however, that these steps only help existing claimants. New disabled claimants will be entitled to less money than they would have had they applied earlier, under the legacy system.75 The value of transitional protection will also erode over time, bringing the value of benefits paid to migrated claimants gradually in line with the lower rates of benefit paid to new claimants.76
The impact of removing SDP and EDP
33.The Department explained its rationale for removing SDP and EDP from UC further in response to Parliamentary questions. It said that ,while designing UC, it had designated the disability premia as “payment for care costs rather than daily living costs”. It maintained that these are “not part of Universal Credit”, because “costs for care are picked up by the social care system”.77 When asked about the subsequent impact on local authorities, however—which share responsibility for adult social care with the Department of Health and Social Care—the former Minister for Employment explained that “the fact that the severe disability premium does not feature within the structure of Universal Credit (UC) has no financial effect on local authorities”.78 This suggests that these costs are not expected to be met through the social care system. Neither the UC impact assessment in 2012 and or Equality impact assessment in 2011 set out in any detail the effects of removing SDP and EDP from UC.79
Box 3: What are EDP and SDP used for?
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Disability premia are intended to help disabled people with additional living and care costs associated with their health condition. Disability Rights UK, The Children’s Society and Citizens Advice set out some of the ways that claimants reported using the premia:
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Source: Disability Rights UK, Citizens Advice and the Children’s Society, Holes in the safety net
34.We heard that claimants use SDP and EDP to cover additional costs resulting from their health conditions. These are not necessarily easily separated into “daily living” and “care” expenses (see Box 3). The Children’s Society, Citizens Advice and Disability Rights UK reported that many respondents to their survey work on SDP and EDP were, even with the additional benefit, “clearly very distressed and living very isolated lives”.80 83% of people eligible for SDP reported that a reduction in the amount of benefit they received would result in them needing to cut back on food. 80% said that they would have to reduce spending on heating their homes.81 This was in spite of those claimants necessarily being in receipt of ESA and PIP, DLA or equivalents—all of which are intended to help cover the additional costs arising from a disability or health condition. Our predecessor Committee heard during its inquiry on the Disability employment gap in 2017 that benefit levels for disabled people at that point already fell short of meeting the care and living costs that claimants face—before the option of claiming SDP and EDP was removed, and before the new, lower rate of ESA-WRAG/UC-LCW was introduced for new claimants.82
35.Our predecessor Committee also heard evidence of the effect on work incentives of paying claimants insufficient levels of benefit. Kennedy Scott, a specialist employment support provider, told the Committee that “the greater the poverty a jobseeker is living in, the harder to find sustainable work”. They continued: “Poverty leads to unstable housing, mental health conditions, worsening physical health, debt, and, at best, can provide a major distraction from the business of finding work”.83 The overwhelming majority of other witnesses to that inquiry agreed with this sentiment. With disabled people facing higher living costs than non-disabled people, the effect of reducing the amount they receive in benefit could be to make it less, not more, likely that they will in time return to work.84
36.The effect of removing financial support offered by the SDP and EDP may go beyond disabled people directly affected. The Children’s Society explained that the impact on disabled parents with dependent children is likely to be particularly significant. Disabled parents without adult carers tend to manage their care and support needs in a mixture of ways: paying for care, receiving some support from their children, and leaving some jobs undone.85 We heard that if financial support to disabled parents without adult carers was reduced, they might respond by further increasing the number of jobs left undone, or by relying to a greater extent on their children to help.86 The Children’s Society told us that although the Government argues that children should not be primarily responsible for care, only around a third of households where there are non-disabled children and no non-disabled adults has alternative means of support from other agencies.87 In many such households children already take on very substantial care work:
40% of respondents’ children were spending more than 15 hours a week assisting their parents and 60% were spending more than 10 hours a week. This was for all the respondents in the survey who had children of any age. 70% of households with at least one child aged over 10 or over were assisting their disabled parent for more than 10 hours each week.88
Witnesses told us that the removal of the SDP and EDP, used often to pay for ad hoc care and support, is only likely to increase disabled parents’ need to rely on their children. In turn, this could negatively affect the life chances of children of disabled parents.89 The Children’s Society, Citizens Advice and Disability Rights UK provided a case study:90
Ben has been a young carer for his mother, Andrea, for many years, carrying out a range of household tasks as well as helping his mother to get around. He has had to take on a lot of responsibility at an early age and has grown up very fast. The only support/respite he gets is from attending his young carers group and some sport activities he is involved in. Andrea is very concerned about the abolition of the SDP particularly about the impact this loss in financial support would have on her son’s quality of life. She worries that without this, Ben would not be able to go to his young carers group and the social activities they can only just afford to take him to. His life would just involve school and carrying out his care responsibilities.
37.We heard suggestions for offsetting the effect of removing the SDP and EDP for new UC claims. The Children’s Society, Citizens Advice and Disability Rights UK advocated reinstating the SDP in full under UC for all claimants.91 Recognising the potentially substantial costs involved, however, the same organisations offered the alternative of introducing a “self-care” component into UC for claimants who would have been eligible for premia in the legacy system. This could be paid at the same rate as the existing UC Carer amount (currently £156 per month).92 Afzal Rahman, Senior Policy Researcher at Citizens Advice, told us that this would introduce “parity between people who have a carer who lives with them and those who do not”.93 Sam Royston, Director of Policy, Research and Public Affairs at The Children’s Society, agreed. He explained that:
The bare minimum [should be] where someone is providing that care, or effectively a disabled person is providing that care for themselves, they are given the same amount of financial support that you would provide to a carer for looking after them so that they can purchase that care in for themselves.94
38.Changes to disability benefit top ups—the “disability premia”—under Universal Credit are amongst the most complex differences between Universal Credit and the system it replaces. And they are also one of the areas where disabled people could find themselves with lower levels of benefit under Universal Credit than under legacy. But there is currently a lack of clarity and accessible information on how benefit entitlements differ between the two systems. This makes it very difficult for disabled people, and the organisations that support them, to understand what they will or will not receive under Universal Credit.
39.The Department made a serious error in removing disability premiums from Universal Credit and in failing initially to provide existing recipients of those benefits with transitional support. The steps it has since taken to correct this are both necessary and very welcome. But transitional protection can still be lost, and protection erodes over time. And the core problem of lower benefit entitlements for new Universal Credit claimants remains. DWP claims that it is recycling savings to offer more support to the “most severely disabled” claimants—those in the Universal Credit equivalent of the ESA Support Group. This still falls short of what they would have been entitled to under the legacy system. And it does nothing to help disabled people in the equivalent of the Work-Related Activity Group. These disabled people have been assessed by the Department as not well enough to work—but they are not covered by the protections that the Department has committed to providing to “severely disabled” people.
40.Disabled people use the Severe and Enhanced Disability Premiums—along with other benefits—for essential living and care costs, in the absence of a paid for carer. Even with this additional money, meeting costs can be a struggle. Removing vital additional support offered by the disability premia from Universal Credit risks disabled people living more isolated lives, relying on unpaid care (including from their own, dependent children), or simply being unable to complete certain basic daily tasks. The Department has carried out no analysis of its own to assess the effects of this change. It nonetheless confidently asserts that costs and consequences will not emerge elsewhere: for example, in the social care system.
41.We recommend the Department carry out and publish by March 2019 an assessment of the impact of removing the disability premia from Universal Credit for new claimants. It should include in this an assessment of the costs and benefits of introducing a “self-care” amount in Universal Credit, paid at the same rate as the Care component to claimants who would have been eligible for disability premia. It should also include clear worked examples of the financial support that disabled people claiming different benefits (including disability premia and tax credit disability additions) under the legacy system will receive under Universal Credit.
Support for disabled children
42.Under the legacy system, families with disabled children who are entitled to Disability Living Allowance or PIP can in some circumstances receive additional financial support.95 This reflects the additional costs associated with caring for a disabled child. The support is paid via the disability elements of Child Tax Credit. In 2018/19, families with a child receiving DLA could receive an additional £273 per month via the “disabled child element”.96 Parents with children on higher-rate DLA or PIP can receive a further £110 per month via the “severely disabled child” element.97
43.Under UC, this support is paid via “disability additions”. Children who would have received the higher rate will receive slightly more under UC than they would have under the legacy system.98 The only families eligible for this rate, however, will be those with a child with either a severe visual impairment, or who receive the higher-rate of DLA or the enhanced rate of PIP’s daily living component. Families with a child on the lower rates of either benefit will receive substantially less. Their entitlement is halved to £126 per week for new claimants and those migrating “naturally”. Existing claimants will be eligible for transitional protection if they move via “managed migration”.99 Contact a Family, an organisation that supports families with disabled children, cited DWP research on the effect of the change. This showed that at least 100,000 families would be left with a lower entitlement to support under UC than they had under the legacy system once UC is fully rolled out.100
44.The Children’s Society told us about possible consequences of this decision for people they support. They found:101
- Two thirds of those likely to be affected told The Children’s Society that the reduction would cause them to have to cut back on food. More than half said they would likely get into debt, and one in ten said they would need to move house.
- Lone parents were particularly likely to experience difficulties, since they find it more difficult to make up the shortfall in income by working more hours. In a “few particularly worrying cases” lone parents were concerned that they would “no longer be able to afford to support their child [and] would need to move them into residential care”.
- There was likely to be a consequential impact on local authorities, as most of those affected were not already receiving additional support.
45.As with reductions to the Severe Disability Premium and Enhanced Disability Premium, several organisations called for the reduction in the value of support for disabled children under Universal Credit to be reversed in full.102 The Children’s Society told us that, should this prove not to be possible, their survey evidence had suggested that families in receipt of the mid-rate care component of DLA were likely to find it particularly challenging to recoup the money they would have received under the legacy system.103 This is because their “level of care responsibilities, combined with a high likelihood of high childcare costs in work [ … ] make it particularly difficult to offset the impact” of the new rate through work. They recommended the Department protect this group by maintaining their disability additions at the current tax credit rates under Universal Credit.104
46.Changes to support for disabled children under Universal Credit mean that some families with severely disabled children will receive more than they would have under tax credits. But this increase in support comes at a substantial price for other families. Once Universal Credit is fully rolled out, 100,000 families with a disabled child will receive less money than they would have under the legacy benefit system. The consequences—for claimants unable to make up the shortfall, and for local services that need to step in and support them—could be disastrous.
47.The Department provides transitional protection to households moving to Universal Credit via “managed migration”. This includes households receiving support for disabled children. But households who migrate “naturally” due to a change of circumstances, or who make a new claim, will receive no such protection.
48.We recommend the Department provide in response to this report any assessment it has carried out of the impact of the reduction in support for disabled children under Universal Credit. We also recommend the Department adjust eligibility conditions for disability support for children under Universal Credit to include families with children claiming the middle rate care component of Disability Living Allowance. These households are likely to find it particularly difficult to make up the shortfall through work owing to both their care responsibilities, and the high costs of specialist childcare for disabled children. It should also arrange to provide backdated transitional protected to claimants who have already lost money by moving onto Universal Credit through “natural migration”.
15 DWP, Universal Credit transition roll-out schedule, March 2018 to December 2018.
16 Social Security Advisory Committee (SSAC), The Draft Universal Credit (Managed Migration) Regulations 2018 (SI 2018/****) Report by the Social Security Advisory Committee under Sections 172(1) and Section 174(1) of the Social Security Administration Act 1992 and statement by the Secretary of State for Work and Pensions in accordance with Section 174(2) of that Act, November 2018
18 DWP, The Universal Credit (Transitional Provisions) (Managed Migration) Amendment Regulations 2018: Letter from the Secretary of State for Work and Pensions, November 2018
19 We return to the application process in Chapter 3.
20 DWP, Universal Credit statistics, November 2018, p.9. Data correct to August 2018.
21 National Audit Office (NAO), Rolling out Universal Credit, Session 2017–19, HC-1123, p.37–38
22 Ibid.
23 DWP, Employment and Support Allowance: Work Capability Assessments, Mandatory Reconsiderations and Appeals, September 2018. Data correct to March 2018
24 Q379 (Janet Smethurst)
25 Work and Pensions Committee, PIP and ESA assessments, Seventh report of Session 2017–19, HC 829, February 2018
26 Work and Pensions Committee, PIP and ESA assessments, p.45
28 NAO, Contracted out health and disability assessments, Session 2015–16, HC-609, p.35
29 Scope (DMP0010)
30 Work and Pensions Committee, PIP and ESA assessments, p.46–47
31 Q36 (Alok Sharma)
33 SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, p.138–139
37 Secondary Legislation Scrutiny Committee (Sub-Committee B), 8th Report - Proposed Negative Statutory Instruments under the European Union (Withdrawal) Act 2018; Includes 3 Recommendations; Draft Universal Credit (Managed Migration) Regulations 2018, December 2018
38 See Chapter 2.
39 The Department’s initial draft Regulations set a one month minimum notice period. This was extended to three months in its revised draft Regulations. See SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, p.8
41 The Universal Credit (Transitional Protections) (Managed Migration) Amendments 2018, Regulation 45(1)b
42 SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, pp.15–16
43 Child Poverty Action Group (UCM0004), Trussell Trust (UCM0008). See also: Mind (UCR0253), National Housing Federation (UCM0009), Joseph Rowntree Foundation (UCM0013)
44 SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018; see also: Letter from the Secretary of State to the Committee Chair re. managed migration, 13 November 2018
46 Q915 (Sir Ian Diamond); SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, p.32
47 SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, p.26. See also: Child Poverty Action Group (UCM0004), Mencap (UCM0014), National Association of Welfare Rights Advisers (UCM0016)
48 SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, p.26, Q916 (Victoria Todd)
50 NAO, Rolling out Universal Credit, pp.31–32. See also: Trussell Trust (UCM0008), Child Poverty Action Group (UCM0004), Low Incomes Tax Reform Group (UCM0012)
51 SSAC, The Draft Universal Credit (Managed Migration) Regulations 2018, pp.34–35. See also: Policy in Practice (UCM0015), Residential Landlords Association (UCM0005)
53 Public Accounts Committee, Universal Credit, Sixty-fourth Report of Session 2017–19, HC 1183, October 2018
54 Work and Pensions Committee, Benefit sanctions, Nineteenth Report of Session 2017–19, HC-955, November 2018, p..28–29
55 Letter from the Minister for Employment to Committee Chair, 11 October 2018
56 Public Accounts Committee, Universal Credit, p.6
57 Low Incomes Tax Reform Group (UCM0012), National Housing Federation (UCM0009), Residential Landlords Association (UCM0005), Child Poverty Action Group (UCM0004), Mind (UCR0253/UCM0006)
58 Q945 (Victoria Todd)
59 NAO, Investigating into errors in Employment and Support Allowance, Session 2017–19, HC 837, March 2018
61 Gov.uk, Disability premiums: what you’ll get, December 2018
62 For a full list of qualifying benefits for all disability premia see Gov.uk, Disability premiums: eligibility, December 2018
64 DWP, Welfare reform bill: Universal Credit, Equality impact assessment, November 2011, p.9
65 Gov.uk, Universal Credit: what you’ll get, December 2018
68 Rahman, A., Universal Credit for single disabled people, Citizens Advice, October 2018
69 Gov.uk, Universal Credit: what you’ll get, December 2018
70 DWP, Welfare reform bill: Universal Credit, Equality impact assessment, November 2011, p.9
72 Scope (DMP0010). See also Work and Pensions Committee, Disability employment gap
75 Child Poverty Action Group (UCM0004), Citizens Advice (UCM0014), PCS Union (UCM0011), Children’s Society (UCR0245)
76 Letter from the Secretary of State to SSAC, 5 November 2018
79 DWP, Welfare reform bill: Universal Credit, Equality impact assessment; DWP, Universal Credit impact assessment, December 2012
80 Disability Rights UK (DRUK), The Children’s Society and Citizens Advice, Holes in the safety net: the impact of Universal Credit on disabled people and their families, December 2012, p.9. See also Children’s Society (UCR0245)
81 DRUK, The Children’s Society, Citizens Advice, Holes in the safety net, p.10
82 MRC/CSO Social and Public Health Sciences Unit, University of Glasgow (DEG0073). “Current benefit levels” refers to ESA rates prior to the 2017 reduction. See also: Ben Baumberg Geiger (Q31), Leonard Cheshire Disability (DEG0039), Breakthrough UK (DEG0053), Macmillan Cancer Support (DEG0068), Citizen’s Advice Scotland (DEG0047), Mencap (DEG0084), Citizen’s Advice Derbyshire Districts (DEG0088), Essex County Council (DEG0051), Advice Nottingham (DEG0052), Brawn, E., Priced out: ending the financial penalty of disability by 2020, Scope, April 2014.
84 Q31 (David Finch), Disability Benefits Consortium (DEG0054), Rethink Mental Illness (DEG0037), RNIB (DEG0025), Advice Nottingham (DEG0053), Citizen’s Advice Scotland (DEG0047), Citizen’s Advice Derbyshire Districts (DEG0088), Salford Welfare Rights and Debt Advice Service (DEG0064), MRC/CSO Social and Public Health Sciences Unit, University of Glasgow (DEG0073), Papworth Trust (DEG0043), Twist Partnership (DEG0054), Disability Rights UK (DEG0041). See also RNIB (DMP0006), Action for ME (DMP0005), Mind (DMP0004), Mencap (DMP0003)
88 DRUK, The Children’s Society, Citizens Advice, Holes in the safety net, p.11
90 DRUK, The Children’s Society, Citizens Advice, Holes in the safety net, p.10
91 DRUK, The Children’s Society, Citizens Advice, Holes in the safety net,
92 DRUK, The Children’s Society, Citizens Advice, Holes in the safety net, Children’s Society (UCR0245), Mind (UCM0006)
93 Q722 (Afzal Rahman)
94 Q724 (Sam Royston)
95 Children and young people under the age of 16 can only apply for DLA. Young people over the age of 16 have to apply for PIP.
96 HMRC, Guidance on Tax credits, Child benefit and Guardian’s allowance, April 2018
97 Contact a Family, Universal Credit and cuts to the disabled child element (research briefing), April 2016
98 The higher rate Disability addition was set at £383.86 per month in 2017/18. The lower rate is £126.11
99 Letter from the Children’s Society to the Committee Chair, November 2018
100 Contact a Family, Universal Credit and cuts to the disabled child element (research briefing). See also: Child Poverty Action Group (UCM0004)
102 Contact a Family, Universal Credit and cuts to the disabled child element (research briefing), WinVisible (UCR0226), Letter from the Children’s Society to the Committee Chair, November 2018
103 Letter from the Children’s Society to the Committee Chair, November 2018
104 Letter from the Children’s Society to the Committee Chair, November 2018
Published: 19 December 2018