Universal Credit: the wait for a first payment Contents


What is backdating?

171.If a person’s circumstances delay their application for Universal Credit, they can request that their payment is backdated up to a month before they started their claim. In its online guidance to claimants, Citizens Advice says that a person will need a “good reason” for not claiming earlier. It suggests this could be because of an illness; a disability; the person wasn’t told their Jobseeker’s Allowance or Employment and Support Allowance was going to end; the online claims system was down; the person’s relationship has changed if they were claiming with their partner, or DWP has told the person incorrect information.200 For some circumstances, a person will need to provide supporting evidence; for example, medical documentation of an illness.

Why do people not claim on time?

172.In its 2020 report, Universal Credit: Getting to first payment, the National Audit Office identified a significant problem of people not claiming Universal Credit when they become eligible. It found that one fifth of claimants do not apply as soon as they can, even though many are in financial difficulty already. From the Department’s analysis of earnings data, the NAO reported that nearly half of claimants (49%) had no earnings in the three months before they apply for Universal Credit.

173.The NAO’s stakeholder consultation identified a range of factors which put people off applying for Universal Credit. It said that there is fear surrounding the benefit which originates from people hearing “bad experiences from friends, family or through the media” and associating the benefit with “hardship, rigidity of system and difficulty”.201 The NAO said that some people are put off by the initial assessment period and are concerned about “whether they would be able to cope during the wait”.202 It said that other people delay their claim because of practical considerations, such as whether outstanding payments from work will limit their Universal Credit entitlement, or whether, if they move to Universal Credit from existing benefits before they need to, they will lose their entitlement to transitional protection (a top-up payment to ensure there is no change in their income).203

174.Organisations told us that claimants’ capability and individual needs can delay their making a claim. We heard that problems with digital access mean some claimants lack access to a computer, struggle with IT skills or are unable to access the internet. This can add days or weeks to a person submitting their claim after they first register.204 Many people do not have reliable access to the internet at home, and the impact of the pandemic—which has seen places such as Jobcentres and public libraries close for long periods—may have exacerbated this problem. The think tank Bright Blue told us that people face delays because they struggle to provide the identity documents required to make a claim, or receive miscommunication from Jobcentre Plus staff of what is required to register their claim.205 Child Poverty Action Group and the NAO, in its report on Universal Credit, said that language barriers for people whose first language is not English add “substantial delay between [a person] starting a Universal Credit application and submitting it”.206 The NAO added that an inability to read or write to the level necessary to submit and maintain a claim is a problem for some people. Changing Lives said that up to a third of the women it supports choose not to apply for Universal Credit as a result of the social and digital exclusion they experience.207

175.We learned that, when some claimants face major changes in life circumstances, it can be impractical for them to make a claim, or they try to get by without support from a benefit. Policy in Practice said in 2019 that it is unreasonable that DWP expects people to “prioritise making a Universal Credit claim” if they are going through major events, such as “if they have lost their job, been made homeless, split up with their partner or had a baby”, or they are experiencing domestic abuse. It said that the evidence required to have a claim backdated is “overly burdensome and sometimes inappropriate”.208 Other witnesses said that some people find other means to get by. We heard that people may expect to start a new contract which then falls through, may draw from their savings, or may push themselves into rent arrears before making their Universal Credit claim.209

176.In its report, the NAO said that delays in claims can exacerbate the financial pressure that many claimants are already facing.210 It recommended that DWP develop a more evidence-based understanding of why some people delay their claim for Universal Credit, particularly for vulnerable claimants. It said that DWP should work with organisations to encourage people to claim earlier and deliver “significant improvements” in how clearly it communicates with claimants.211

177.In its evidence, the Department recognised that people are not applying for Universal Credit as soon as they are eligible. The Minister for Welfare Delivery told us that people are coming onto Universal Credit “far too late” and the Department needs to “better understand the drivers of that”.212 On the question of backdating, however, the Minister reiterated in written correspondence that the policy is only applied where “someone could not reasonably have been expected to claim earlier”. He gave illness, disability or an official computer system failure as examples of this. He said that there are “currently no plans to change this”.213

How does the Department encourage people to claim on time?

178.The Department has created a “Universal Credit Transition Fund” which aims to “engage with vulnerable people early, helping them to make timely claims” to Universal Credit.214 Money from the fund would go to organisations which support vulnerable people, including disabled people, care leavers, and people with mental health issues. The Minister for Welfare Delivery told us that the Department had paused the £10 million Universal Credit Transition Fund because of the pandemic. He said that DWP does not “currently have the resource or the capacity internally to run that procurement process” but that he would like to launch the fund next year.215 He told us, however, that there is “no guarantee that the Treasury will approve that”.216

179.In oral evidence, the NAO urged caution on simplistic communications which tell people to apply for Universal Credit immediately. The Comptroller and Auditor General told us that the Department should focus on the “quality of advice available to claimants” rather than the message that “the earlier the claim, the better”.217 Joshua Reddaway, Director for Work and Pensions Value for Money at the NAO, explained why it might not be in somebody’s interests to make a claim early:

[It is not necessarily advisable to apply early to Universal Credit] because of complications over whether or not you are already on tax credits, whether or not you have a redundancy payment coming up, what your savings are and its interaction with previous. That makes it a very complicated question and it is why I think the Department would be very hesitant to do a mass media campaign saying, “Apply early”. It is, “Get the right advice early”.218

180.We welcome the Minister’s recognition that the Department needs to improve its understanding of the reasons why so many people claim for Universal Credit long after they become eligible. The Department must prioritise this work so that it can tackle the problem. We recommend that the Department investigate why people take time to start a Universal Credit application and publish the results of these findings by the end of the financial year. It should use this analysis to inform its communications with claimants, to encourage people to apply for Universal Credit at the right time.

181.Many claimants are simply unaware that they can ask for their claim to be backdated by a month. Even when they do ask for backdating, they sometimes face an intrusive and bureaucratic process. We recommend that the Department review the use of evidence for backdating and works with work coaches to find a way to make the application process less burdensome on claimants. The Department should publish the information that work coaches use to advise claimants on backdating. It should work to increase awareness of the option for backdating from day one of a person’s claim, and of the circumstances in which somebody may be able to see their claim backdated.

182.Currently, backdating is only permitted up to a month before the claim was submitted. Given the seriousness of the life events which might allow the backdating of a claim—bereavement, serious illness, relationship breakdown—this period seems astonishingly short. We recommend that, in specified circumstances, the Department allow backdating to the point at which the change in someone’s life occurred, rather than strictly a month before.

183.The Universal Credit Transition Fund is an initiative to support vulnerable people in applying for Universal Credit as soon as they are eligible, and rightly puts organisations that work most closely with these groups at the centre. Timely applications to Universal Credit will mitigate the impact of the five-week wait. The disruption created by coronavirus this year has left the future funding of the Fund in some doubt. We recommend that the Department and HM Treasury continue the Universal Credit Transition Fund by renewing its funding for the next financial year.

200 Citizens Advice, How Universal Credit is paid, June 2018

204 The Joseph Rowntree Foundation, Changing Lives, Bright Blue, NAO

205 Bright Blue (UCW0023)

206 Child Poverty Action Group (UCW0058)

207 Changing Lives (UCW0030)

208 Policy in Practice, Financial Resilience and the Transition to Universal Credit, September 2019, p 13

209 Joseph Rowntree Foundation (UCW0076); Q88

213 Letter from the Minister for Welfare Delivery, dated 27 August 2020

217 Q287

218 Q296

Published: 19 October 2020