Universal Credit: natural migration Contents

Conclusions and recommendations

Natural vs managed migration

1.The Department has carefully selected the few changes it considers appropriate to bring an end to transitional protection for claimants who move to UC via managed migration. However, the many changes to a claimant’s circumstances which can lead to natural migration are based, by the Department’s own admission, on its own administrative practicalities. This means that claimants can lose out simply because of the arbitrary timing of a change in their circumstances. It is particularly unjust—as recognised by the courts—that the Department has in effect created a postcode lottery, where claimants who move house to outside of their local authority lose their entitlement to transitional protection, while those who move within local authorities do not. (Paragraph 22)

2.We recommend that the Department makes an ongoing payment to meet any shortfall in income for:

3.It is inexcusable that severely disabled people are being made to wait for the vital support which enables them to live their lives independently—and which the Department itself recognises they need. The Department has provided no evidence to support its argument that the provisions for this compensation cannot be separated from the regulations for the pilot of managed migration. It is difficult to avoid the conclusion that the Department is holding disabled claimants to ransom in order to ensure that Parliament approves its managed migration plans. The High Court has now ruled that the compensation the Government plans to pay claimants is not enough. The Department must urgently take the High Court’s ruling into account and ensure that claimants are fully compensated as soon as possible. With no resolution in sight, and Parliament’s summer recess fast approaching, the Department must now take action. (Paragraph 30)

4.We recommend that the Government withdraws the draft Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 and replaces them with:

a)An instrument subject to negative resolution, to make provision for people previously entitled to a severe disability premium; and An

b)instrument subject to affirmative resolution, with the provisions for the pilot of managed migration. (Paragraph 31)

5.The Department should ensure that the provisions for people previously entitled to the SDP should take into account the High Court’s recent ruling and it should lay the regulations as soon as possible. (Paragraph 32)

6.Cuts to disability entitlements for some disabled adults and children mean that disabled people are among the groups most likely to see a drop in income when they move to UC. The Committee welcomes the belated—though, so far, incomplete—steps the Government has taken to protect claimants in receipt of the Severe Disability Premium from moving to UC via natural migration. However, it has stopped short of extending this protection to all disabled claimants, in spite of evidence that disabled people are often more vulnerable to the hardship that a loss of income brings. We therefore urge the Department to ensure that all disabled claimants are protected financially when they move to UC. We do not expect that this would come at a huge cost to the Department, given its assurance that the majority of disabled claimants stand to gain from a move to UC. It may also reduce the overall cost, by preventing additional costs from emerging elsewhere, such as in the NHS. If, for example, 50% of all those in the ESA WRAG group in receipt of the EDP and 50% of all households in receipt of the lower-rate child disability premium move to UC via natural migration, we estimate that financial protection for these groups would cost the Department around £100 million pounds a year. It could put the £200 million it expects to save by 2023, as a result of the delay to managed migration, towards covering this additional cost. (Paragraph 38)

7.We recommend that the Department makes an ongoing payment to meet any shortfall in income for all households with any level of disability, including children with disabilities, who lose out when they move to UC. This should include making back-payments to claimants in these circumstances who have already moved to UC and lost out as a result. (Paragraph 39)

8.The consequences of the Department’s decision to base its approach to natural migration around its own administrative practicalities, rather than on claimants’ needs, can be seen clearly in the particularly cruel effect it has on people who have been recently bereaved. It is inconceivable that, at a time of considerable grief and distress, the Department expects claimants who have just lost their partner to immediately claim UC and grapple with a process which by all accounts is often extremely complicated. We urge the Department to show these people some compassion. (Paragraph 43)

9.We recommend that the Department should allow people on legacy benefits to remain on legacy benefits for a grace period of one year after the death of their partner, so that they do not need to immediately apply for UC. (Paragraph 44)

10.The legacy system rightly provides easements to people who are going through a bereavement to allow them time to grieve before they have to think about engaging with the benefit system or changing their living arrangements. Under UC, however, some claimants who may no longer be exempt from housing restrictions (such as the “bedroom tax”) following the death of their partner could be immediately expected to change their living arrangements in order to cope financially. While the housing costs of claimants already on UC will be protected for three months—nine months less than in the legacy system—claimants who move to UC via natural migration may not receive this protection at all and could face the unenviable choice between finding alternative living arrangements at the peak of their grief or plunging themselves into debt. (Paragraph 45)

11.When claimants move to UC because of the death of their partner, the Department should provide them with transitional protection for their housing element for twelve months, as was the case in the legacy system. (Paragraph 46)

12.The Department has recognised the need to provide additional support to existing benefit claimants in the form of legacy benefit run-ons, to help people bridge the gap between applying for UC to their first payment. However, those who move to UC via natural migration without transitional protection—and who see a loss in income—are arguably in most need of this support. Not only can people—who are already vulnerable financially—suffer the overnight financial loss that natural migration can bring, but this loss can be exacerbated by other features of UC such as high deduction rates, including the repayment of advances. This loss of income can leave claimants at risk of rent arrears, or even losing their homes. The Committee maintains its view that run-ons are ultimately a sticking plaster over one of UC’s fundamental design flaws—the five week wait for payment. The process of administering run-ons is surely more costly for the Department than finding a way to move people seamlessly from legacy benefits to Universal Credit. However, while the five-week wait remains, the Committee simply won’t tolerate that the run-ons will not be made available until 2020. (Paragraph 54)

13.We recommend that the Department should look at practical options to eliminate the five-week wait. This could, for example, involve the Department making advance payments to claimants non-repayable. It could adjust for any differences in the estimate on which a claimant’s advance is calculated and the calculation of their final award through additions or deductions to the claimant’s future UC payments. (Paragraph 55)

14.In the meantime, while the five-week wait remains, we recommend that the Department bring the run-on of all legacy benefits forward to Autumn 2019, so that people moving now through natural migration and those moving later have the same amount of help while they wait for their first UC payment. If the Department cannot automate this process in time, it could for example:

15.We also recommend that the Department provide the Committee with a list of the policy changes in the Department’s development schedule. This should also include:

Moving to UC without a change of circumstance

16.The Department does not tell claimants clearly that a move to UC can, in some cases, result in an irreversible loss of income. Given the potential impact of a premature move to UC on claimants who stand to lose income, this is irresponsible at best. It also denies that it is responsible for telling individual claimants what the impact on their income of a change in circumstances would be, and whether moving to UC would increase or decrease their income. (Paragraph 74)

17.We recommend that the Department should tell claimants about natural migration as part of its ongoing communications about UC. This should include stating explicitly that some people may lose out financially as a result of a move to UC. This information should be added to the UC claim homepage along with a link to the benefit calculation websites such as entitledto and the Citizens Advice website. The Department should signpost claimants to organisations able to give accurate independent advice. It could for example, include this in the Citizens Advice “Help to Claim” offer, which provides help to claimants with aspects of making a claim through to first payment. However, it must ensure this is adequately funded. (Paragraph 75)

18.Understanding when a claimant may need to move to UC is complex and involves a detailed understanding of both UC and legacy benefits. However, the Department has not developed clear or comprehensive guidance for its staff, local authorities and organisations supporting claimants. This has resulted in cases of claimants being given incorrect advice, often with serious financial consequences. Given the potential financial implications a move to UC can have for some existing claimants, it is vital that the Department does more to ensure that anyone providing advice to claimants is able to give accurate advice which is in the claimant’s best interest. (Paragraph 76)

19.We recommend that the Department work with stakeholders to develop clearer and comprehensive guidance on when claimants need to move to UC and how this can affect different claimant groups. It should make this guidance publicly available. In addition, the Department should publish a comprehensive list of the changes in a claimant’s circumstances which could lead to them needing to claim UC. (Paragraph 77)

20.We recommend that the Government review these triggers for natural migration and consider whether it is appropriate that these changes of circumstance should require a new claim for Universal Credit. If it believes that they are appropriate, it should clearly explain why. (Paragraph 79)

21.Universal Credit will not be more generous for all. Many claimants will see a drop in their entitlement under UC compared to the legacy system, with an average loss of £59 a week or around £3000 a year. Some of the groups affected include: families with a disabled child, who stand to lose £30 a week; some disabled claimants will see a drop in entitlement of £70 a month; and the self-employed, who stand to lose as much as £8000 a year. The Department has repeatedly pledged that claimants whose circumstances remain the same will not lose out financially when they move to UC via managed migration. However, it has done nothing to prevent claimants from moving to UC prematurely—even if they stand to lose out by doing so. Given how difficult it is to work out when a move to UC is required, it is little wonder that some claimants find themselves trapped in the Department’s chillingly-named “lobster pot”, either by their own mistake or by following incorrect advice from the Department’s own staff or other organisations. By the Department’s own admission, this can leave claimants in some cases with substantial losses in income, unable to return to legacy benefits. While it is welcome that the Department has said it will compensate claimants who move to UC following incorrect advice from its staff, this commitment does not go far enough. We urge the Department to change its approach. (Paragraph 83)

22.We recommend that the Department provides full compensation to all claimants who have lost out financially because they have moved to UC prematurely, despite their circumstances remaining the same. This could be done separately from the Department’s maladministration process. Payments should compensate for the additional amount they were previously receiving in the legacy system and should apply regardless of whether the move is a result of the claimant’s own misunderstanding or mis-advice from DWP staff or other organisations. (Paragraph 84)

How is it working in practice?

23.The Department is forcing claimants who are waiting for appeal decisions to gamble with their financial future—they can claim UC to survive in the short term, or go without in the hope that they will be better off in the longer term. It is entirely unacceptable that the Department refuses to offer compensation to claimants whose appeal is successful, effectively penalising them because of incorrect decisions it has made to deprive them of their legacy benefits. We are convinced of the need for urgent change. (Paragraph 89)

24.We recommend that the Department allows claimants who have an ongoing legacy benefit appeal to remain on legacy benefits until their application has been processed, where the legacy benefit allows them to receive money they would be entitled to under JSA. For instance, claimants awaiting an ESA appeal decision should be able to remain on the assessment phase of ESA. Where this is not possible, the Department should pay claimants who win their appeal transitional payments, which should equate to the difference between their entitlement under UC and the amount they would have received in legacy benefits had the Department not made the wrong decision. (Paragraph 90)

25.We recognise the Department’s need to ensure that claimants are eligible for the benefits they receive. However, incorrect decisions on a claimant’s right to reside can leave them without income and at risk of rent arrears, destitution or losing their homes. Where claimants have transferred from legacy benefits, the Department has, in most cases, already made a past decision that they have the right to reside. We urge the Department to look carefully at whether all claimants need to go through this process again and to make full use of the information it already holds on claimants’ status. (Paragraph 96)

26.The Department should review whether all changes in circumstances should trigger EEA nationals to re-take a right to reside test. Where claimants have failed a right to reside test, it should provide clear reasons why this is the case. (Paragraph 97)

27.We also recommend that the Department should conduct a review of its data retention policies. This should look specifically at the impact its policies have on EEA nationals who it has previously assessed as having the right to reside in the UK. It should cease destroying records, where doing so could negatively impact claimants. (Paragraph 98)

28.People on ESA are some of the Department’s most vulnerable claimants. Therefore, when these claimants move to UC, the failure to correctly transfer decisions the Department has made about the income they are entitled to and the accompanying conditions which apply is far more serious than a simple administrative error. Not only can claimants find themselves with less money to live on, but they may be subject to harsher conditionality rules, with the expectation that they seek work or face sanctions. This is deeply concerning, given that in many cases the Department has assessed that engaging with Jobcentres can put these claimants at risk of self-harm or even suicide. While we welcome the Department’s efforts to address this issue, we cannot simply accept on trust its assurances that this is not a “systemic” issue. Given the potential impact on claimants, it cannot afford to let one case slip through the net. (Paragraph 106)

29.We recommend that the Department explore ways to make the carry-over of WCA decisions from legacy benefits to UC a more automated process, to reduce the risk of human error. If this is not possible, the Department should provide the Committee with quarterly reports on the number of cases where this is not happening on time so that we can continue to monitor the issue. (Paragraph 107)

Published: 23 July 2019