Universal Credit: the wait for a first payment Contents

Conclusions and recommendations

The impact of the wait

1.The wait for a first payment of Universal Credit is not the only source of the problems people face, but it can exacerbate them. For people who may already be going through a difficult time, enduring five weeks—or longer—without any income can push them into crisis. (Paragraph 30)

2.DWP has previously adopted a sceptical attitude towards the evidence linking food bank use with Universal Credit. The Minister has now recognised that the Department needs to do more to improve its understanding of the what causes food bank use to increase. This is a welcome step. The Department has still not published its own analysis of the drivers of foodbank use, which it commissioned in 2018 and which it originally planned to publish in October 2019. We recommend that the Department publish this work without delay. (Paragraph 31)

3.The Trussell Trust’s data, described by the National Audit Office as the best research it has seen, establishes an association between Universal Credit and food bank use. We share the National Audit Office’s view that the Department should conduct further research to understand these findings better. We would also encourage the Trussell Trust to contribute to this work by sharing its data with the Department. (Paragraph 32)

4.We also heard evidence which suggests that people on Universal Credit are more likely to have rent arrears than people still claiming legacy benefits. The Department’s own data show that, while some people who come onto Universal Credit have pre-existing rent arrears, the level of these arrears rises much more sharply after they make their claim. Even after a year, they have not fully returned to their pre-claim levels. That too is a worrying finding which deserves investigation by DWP. (Paragraph 33)

5.There is also research which found evidence of an increased prevalence of psychological distress, following the introduction of Universal Credit, among people affected by the policy. The research was not able to delineate whether a change of benefit system in itself—such as moving to Universal Credit—was a driver of the rise in psychological distress in the sample of people studied. Further research and evaluation would be needed to understand the drivers behind this rise and its clinical impact. In addition to this, there are wider reports of the impact of the wait for a first payment on claimants’ mental wellbeing. Again, the connection between these findings and the wait for a first payment is not yet clear. But the Department ought to seek to understand this evidence. (Paragraph 34)

6.DWP should conduct or commission research, before the end of this financial year, to develop its understanding of the impact of Universal Credit, particularly the wait for the first payment, on the rising use of food banks; on claimants’ levels of rent arrears; and on claimants’ mental health and mental wellbeing. While the evidence we heard falls short of establishing a causal link between the wait and these experiences, that is no reason for the Department not to take these findings seriously. It should use them as a starting point for a concerted effort to understand the full impact of the wait for the first payment, and how this may differ for claimants who are moving to Universal Credit from legacy benefits and for those who are making entirely new claims. DWP should more thoroughly consider the evidence linking Universal Credit to increased use of food banks, rent arrears and psychological distress and should use this in its overall strategy for protecting claimants’ safety and wellbeing. (Paragraph 35)

7.DWP should publish details of the meetings that it holds with stakeholders, like the Trussell Trust, to ensure that the public and Parliament know that important and well-regarded research, such as that produced by the Trussell Trust, is considered when policy and operational decisions are made. The publication should include the topics that were discussed and any actions that the Department decided to take following the meeting. (Paragraph 36)

Moving to Universal Credit without a change in circumstance

8.People who are moving to Universal Credit through managed migration are doing so because of a decision by the Government. Nothing in their own circumstances has changed. Under the Government’s plans, however, they would have to wait at least five weeks for their first payment of Universal Credit. We see no reason why their transition to a new benefits system should not be seamless. (Paragraph 51)

9.At present, the Government plans to mitigate the impact of the five week wait on this group of claimants by offering two week run-on payments of some, but not all, of the legacy benefits they are currently receiving. That is a sticking plaster, which costs public money, leaves claimants with a gap between payments, and unnecessarily disrupts their budgeting schedules. The delays to the pilot of managed migration give DWP the opportunity to develop something better. (Paragraph 52)

10.We recommend that DWP should eliminate the five week wait for all claimants moving to Universal Credit through managed migration, including for claimants moving from tax credits. Those claimants should continue to receive their existing benefits during their first monthly assessment period. They should then be offered the option, from day one of their Universal Credit claim, of choosing fortnightly payments of their award. This would ensure a smooth and seamless move from legacy benefits to Universal Credit for people whose circumstances have not changed. (Paragraph 53)

11.We recommend that DWP set out, in response to our report, a detailed analysis of how our recommended approach could work in practice. It should also assess how the costs of this approach would compare with the costs of its existing plans to pay run-ons and final payments of legacy benefits to claimants who move via managed migration. (Paragraph 56)

Starter payments in Universal Credit

12.The evidence we received was overwhelmingly in favour of some form of initial, non-repayable payment for new Universal Credit claimants. That would give new claimants the money they need for basic living essentials like food and heating, without requiring them to repay a debt to the Department from their future Universal Credit payments. We agree that new claimants should receive a form of “starter payment” when they first apply for Universal Credit. But we heard a wide range of proposals for how such payments should work and the level at which they should be set. (Paragraph 66)

13.We have considered the various options carefully. In recommending a course of action, we have chosen an approach which offers simplicity: a simple amount of money, so it is clear to claimants what they can expect, and a simple process, which does not require the Department to carry out any additional means-testing or assessment of a household’s needs. The benefits of simplicity seem to us to outweigh any possible cost savings offered by more targeted approaches. It would also address the Department’s concerns that targeted grants could risk creating an unfair system with significant disparities of entitlement between claimants. (Paragraph 67)

14.We recommend that the Department pay all first time claimants of Universal Credit a “starter payment” equivalent to three weeks of the Standard Allowance of Universal Credit. This payment should be made two weeks after the initial claim, and only once the claimant’s identity has been verified, to mitigate the risk of fraud. The starter payment should also be given to people who move to Universal Credit by “natural” migration, in cases where it is not possible for them to be moved seamlessly to Universal Credit. (Paragraph 68)

15.Terminally ill people already face thousands of pounds of additional costs because of their illness, and the money provided by Universal Credit counts more than ever. We welcome the fact that the Department has been reviewing how the Special Rules are working, but that review has now lasted for more than a year. We urge the Government to publish its review without further delay, no later than 30 November 2020. (Paragraph 79)

16.The starter payments we have recommended would also be available to people making claims under the Special Rules for Terminal Illness. We recommend that the Department consider what further support it could offer to people making claims for Universal Credit under the Special Rules for Terminal Illness. That might include paying the starter payment more quickly on receipt of a DS1500 form; offering a larger starter payment to people making claims under the Special Rules; or proactively offering backdating (beyond the current limit of a month) of claims to people diagnosed with a terminal illness who have, understandably, not made a claim immediately on becoming eligible. (Paragraph 80)

Advance payments

17.Advance payments can provide a valuable lifeline to people who might otherwise face going five weeks—or longer—without any income. The changes that DWP has introduced so far, especially allowing people to request Advances equivalent to their entire expected award and extending the repayment period, are welcome. However, there is clear evidence that Advance repayment deductions still leave some people without enough to live on. This leaves claimants facing a difficult choice: five weeks with no income, or the risk of debt and hardship later. (Paragraph 105)

18.Even with starter payments of the kind we have recommended, we anticipate that some claimants would still need to ask for an Advance to cover their immediate costs. But some claimants might no longer need to ask for an Advance, and others would ask for a much smaller Advance than they currently receive. A request for a substantial Advance in these circumstances would be a clear indication that someone is struggling with the transition to Universal Credit. The Department should use this as an opportunity to support these claimants at the earliest possible stage. (Paragraph 106)

19.The Department continues to claim that Advances are not loans, but we find that argument impossible to accept. Advances must be repaid at a set rate, over a set period. The Department risks misleading claimants, and damaging its own credibility, if it insists on denying the obvious fact that Advances are interest free loans. Unlike firms in the consumer credit sector, where the FCA’s guidance stipulates that repayment rates should be set at levels that are affordable, there is no equivalent body that regulates public sector lending. While Advances can be a vital source of income for new claimants waiting for a first payment, we are concerned that some people find that they are unable to afford repayments later on. (Paragraph 107)

20.We recommend that Advances should be renamed “new claim loans”, so that it is clear to claimants that they will need to be repaid. Before a new claim loan is granted in full, the Department should provide personalised budgeting support—when possible, with a face-to-face option—with a full assessment of the claimant’s financial situation and the impact that future repayments of the loan will have on their household finances. We recognise that, for people in acute financial crisis, it may be necessary for the Department to pay part of the loan before this support can be offered. (Paragraph 108)

21.For this group of claimants, the burden of future repayments of Advances is likely to be particularly difficult to bear. Given that benefits broadly provide people with a subsistence level of income, any system that reduces that monthly income, including through repaying an advance, is very likely to cause people difficulty. The Department already plans to extend the repayment period for Advances from 12 to 24 months, and to reduce the cap on deductions from an award of Universal Credit to 25% of the Universal Credit Standard Allowance. But even a 25% cap leaves claimants receiving substantially less than a subsistence level of income. And these changes will not happen until October 2021—some three years after they were first announced. The Minister says that he would love to be able to do this sooner, but cannot because of constraints in the Universal Credit build programme: : a clear case of “computer says no”. (Paragraph 109)

22.The Department should strive to bring in the extension to the repayment period and lowering of the deduction cap sooner than planned, no later than April 2021—recognising the likely increase in the numbers of claimants over this winter. We also recommend that the deduction cap should be reduced further, to 10%, in recognition of the fact that deductions are taken from an income already set at subsistence levels. If this acceleration involves deprioritising other planned changes or developments in the build programme, the Department should set out what these are and provide a revised timescale for their introduction. (Paragraph 110)

23.DWP has capped the deductions that claimants can face from their Universal Credit award at 30%, and yet in some circumstances, such as where a claimant has rent or fuel arrears, or benefit sanctions, DWP can deduct more than this amount. Nick Timmins has estimated that almost one in five of claimants see over 30% of their Universal Credit award deducted to pay off debts. DWP should ensure that claimants never face deductions in excess of the usual cap, and should use the data that it has on “last resort” deductions to help claimants tackle their debt problems without reducing their Universal Credit award further. (Paragraph 111)

24.The Department says that claimants who are struggling can already defer repayments of their Advance for three months. But the evidence we have heard from charities who work with claimants is that this option is not effectively communicated. Without reliable data on how often it is used, it is impossible to know how well this measure is working in practice. The Department should collect and publish data on how many people have requested a deferral of their Advance repayments, and how many of these requests were granted. It should also ensure that work coaches are proactively informing claimants of this option both at the time of their claim and during the repayment period. This should form part of the personal budgeting support we have recommended. (Paragraph 112)

25.We welcome the announcement of the Breathing Space scheme, which is scheduled to be introduced next year, and the Government’s confirmation that Advances in Universal Credit will be covered by the scheme. We find it disappointing, however, that debts in Universal Credit will be “phased in” over time rather than introduced straight away. We recommend that DWP works with HM Treasury to address any technical barriers in order to ensure that Advances are included in the scheme from its launch, so that Universal Credit claimants can benefit from the support it offers straight away. (Paragraph 113)

26.Some people in financial distress during the wait for their first payment can face a difficult choice between using their Advance to pay their housing costs, or to cover other essential costs, such as food or heating. No one should find themselves in arrears—or facing eviction—during this time. We recommend that anyone claiming an Advance should be given the option, at the outset, of having the housing element of the Advance paid directly to their landlord. This would ensure that claimants’ housing costs are covered during the wait for their first payment, and that they will not face the risk of falling into arrears or eviction as a result. (Paragraph 114)

27.We recommend that vulnerable claimants or claimants with specific needs are prioritised for having the housing element of their Advance paid directly to their landlord. This could include people with learning disabilities, people with mental illness, people who have previously been homeless, or people with drug or alcohol addiction. (Paragraph 115)

Increased financial support

28.DWP was right to increase the standard allowance for Universal Credit and support for housing costs as part of its response to the pandemic. Benefit rates, and in particular support for housing costs, had become detached from the actual cost of living—in particular from the cost of private rents—and people were struggling to find a home for their family and to meet the costs of basic essentials. The Department should commit to maintaining the increases in support that have been provided during the pandemic. This should include keeping Local Housing Allowance at the 30th percentile and conducting an annual review of rates to ensure they remain appropriate for each area. It should maintain the £20 a week increase in standard allowance for Universal Credit and Working Tax Credit, with annual inflation-based increases thereafter. (Paragraph 122)

Support for claimants

29.Help to Claim is a hugely valuable service for people who are applying for Universal Credit. But its focus is on helping people to complete their initial claim. It does not provide support for people throughout their claim, to help them to manage debt, personal budgeting, and maintaining their claim through their online journal. In that respect, Help to Claim is still a long way from providing the support originally envisaged as integral to the successful rollout of Universal Credit. We cannot agree with the assertion made by Neil Couling, Senior Responsible Owner for Universal Credit, that the Department is currently providing a “de facto Universal Support”. (Paragraph 131)

30.We recommend that the Department invests in expanding and developing Help to Claim so that the service can provide support to people beyond the application process. This should include debt advice, support for people who are struggling with Advance repayments, and tailored support for people with complex needs who need additional support throughout their claim. The service should also offer digital support—for example, supporting people to make use of the online journal to maintain their claim. This would bring Help to Claim closer to the original plans for Universal Support. (Paragraph 132)

31.DWP currently lacks a comprehensive system for recording and tracking claimants’ needs. The introduction of pinned notes is a step in the right direction but, as the National Audit Office said, pinned notes are the digital equivalent of a post-it note on a file: they do not enable staff to collect consistent data on who needs additional support. We welcome the Minister’s ambition to improve the way the Department identifies people who may need additional support, and his recognition that more needs to be done. We would welcome timely action to address that recognition. (Paragraph 138)

32.DWP must immediately make improvements to the Universal Credit system to formalise how it identifies and defines vulnerable claimants, as part of its overall approach to safeguarding vulnerable people. This will be a substantial piece of work, and DWP should set out when it expects to achieve this. The new mechanism should, as the Minister for Welfare Delivery suggested, include the ability to identify vulnerable and disadvantaged groups and specific cohorts of people. DWP should gather data to identify whether any such groups are more likely to experience problems during the wait for first payment, delays to their payment, or any other issues throughout their claim. DWP should proactively use this information to expedite claims for these people, ensuring that they do not face further delay, and to provide the additional support that they need. (Paragraph 139)

33.Support organisations have expressed concern that DWP’s approach to data sharing and consent has had a detrimental effect on their ability to support vulnerable claimants. The Department now says it is exploring options for improving its model of explicit consent. We urge the Department to publish more detail about how this exploration is being progressed, including when the Department expects progress to be visible to observers and experienced by claimants. We echo the Social Security Advisory Committee’s recommendation that DWP should consider applying the implicit consent model to Universal Credit, or at least consider what improvements it can make to the model of explicit consent. More broadly, DWP should review its approach to how it works with people and organisations that support claimants, including support workers, housing associations and local authorities. (Paragraph 145)

Payment timeliness

34.DWP has made substantial progress in improving payment timeliness,. The Department has increased the proportion of people paid on time from just over half in 2017 to over 90% in 2020—a significant feat given the recent upsurge in Universal Credit claims. However, the overall rise in claimant numbers mean that more people than ever are being paid late, and when managed migration begins at scale there is a risk that these numbers will rise. No one should have to wait more than five weeks for their first payment. (Paragraph 151)

35.We welcome the announcement of funding for the recruitment of over 13,500 new Work Coaches—double the current number—over the next financial year. This is an ambitious programme of recruitment. The Committee would welcome a written update from the Department, by the end of the calendar year, on how the recruitment is progressing. This should include, but not be limited to: how many of the new Work Coaches are in post; the Department’s progress in acquiring new estate to accommodate the new staff; and what impact the introduction of new staff has had on payment timeliness. The Department should then provide monthly updates on this to the Committee thereafter. As part of this, the Department should work with local authorities to identify any additional space that Jobcentres can expand into or share with local authorities. Depending on who space is shared with, DWP may find that it is able to offer better support to claimants through improved communication and collaboration. (Paragraph 152)

36.We acknowledge that most disabled people and people with health conditions receive the core elements of their claim on time. However, we find it troubling that, because of the time taken to complete the Work Capability Assessment process, people must wait much longer than five weeks to receive their full entitlement. Even beyond this, disabled people experience further delays, waiting on average four months for a WCA decision. Given that disabled or ill claimants face additional costs and challenges during the wait for their first payment, it is vital that people receive their full entitlement as quickly as possible. We have recommended elsewhere in this report that DWP prioritise the changes that are needed to the UC system to allow it to collect data about claimants’ characteristics, including impairment or health condition, in a systematic way. It needs that data to understand fully disabled people’s experience of making a claim for Universal Credit. DWP should investigate how it can speed up the WCA process. Four months, on average, is too long for a person to wait for their full award. In addition, the Department should continue to monitor and collect data on how long the WCA process is taking, and it should fast track any groups for whom data suggests the WCA takes the longest. Notwithstanding delays to the process, 13 weeks is still a long time. Disabled people and people with health conditions should not have to wait this long to receive the disability element of their award. DWP should commit to reducing the time taken to complete the WCA process. (Paragraph 158)

37.The Universal Credit application process requires claimants to provide a great deal of information about their circumstances, to enable the Department to assess their claim. When they have done this, Universal Credit claimants rightly expect that they should be paid the full amount they are entitled to, on time. For too many people, however, this simply does not happen. There is a penalty for claimants who do not provide the necessary documents in time: their Universal Credit is paid late. But there is no equivalent penalty for the Department when it fails to keep its side of the bargain. Where a claimant provides all the information DWP has asked for on time, but DWP has not completed its own processes to verify the claim details and make a timely payment, the claimant should receive the full amount of benefit entitlement for which they are claiming. If the Department subsequently decides that a claimant is entitled to less than they have been receiving, claimants should not be expected to pay anything back to DWP except in clear cases of deliberate fraud. Similarly, where a claimant is expected to complete a Work Capability Assessment to assess how much money they are entitled to, the onus should be on the Department to schedule the assessment and make a decision within the usual initial waiting period for the benefit. If there are delays to the WCA process, through no fault of the claimant, claimants should be paid at the highest rate until their claim has been determined. (Paragraph 159)

Tax credit debts

38.Repayments of tax credit overpayments can compound hardship for people who may already be struggling. The evidence that some people are left unaware of these debts, which can be several years old, until they make a claim for Universal Credit, is particularly concerning. Despite HMRC’s assurances that people are routinely informed of overpayments, the evidence we have heard suggests that there are gaps in how this is being communicated. (Paragraph 169)

39.The recovery of Tax Credit debt from claimants’ Universal Credit awards clearly presents problems. However, the option of returning responsibility to HMRC now would be too challenging to deliver in practice. Instead, we recommend that DWP should continue to collect these debts, but that recovery should only begin when the claimant has repaid their Advance (if they have taken one out). Repayments of any remaining debt should be capped at 10% of the Universal Credit standard allowance per month. Debts that have not been pursued for more than 6 years should be written off entirely, in line with the approach taken in the private sector. We also recommend that the FCA’s approach be extended so that it covers public sector debts, including tax credit overpayments and Advances in Universal Credit. This will help ensure that best practice from the private sector is reflected in DWP’s approach to debt. (Paragraph 170)


40.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. (Paragraph 180)

41.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. (Paragraph 181)

42.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. (Paragraph 182)

43.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. (Paragraph 183)

Improving payments

44.While monthly payments do mirror the world of work for many, DWP’s own figures show that a significant minority of people who claim Universal Credit received or continue to receive weekly or fortnightly wages. Other sources suggest that a majority of claimants may be paid more frequently than monthly. This can make it hard for households to budget, particularly if they are already managing debt. At the same time, monthly awards create difficulties for some people in social housing with weekly rent payments, and represent another adjustment for people moving from legacy benefits with weekly payments. The evidence we have heard tells us that the option for more frequent payments would benefit the most vulnerable claimants and would have low cost implications for DWP. (Paragraph 195)

45.We recommend that the Department provide new and clearer guidance for Work Coaches to mitigate the impact of the wait and monthly payment system by making the option of more frequent payments under Alternative Payment Arrangements easy for all claimants in England and Wales to access. This option should be offered to all claimants, alongside clear information about how the payment process will work. The Department should review how it uses evidence for Alternative Payment Arrangement applications, following reports that it puts people off applying. (Paragraph 196)

46.We recommend that the Department publishes the guidance given to Work Coaches when they advise people on APAs, to improve transparency in the process. The Department should make clear when and how a claimant is made aware of APAs both during their Universal Credit application and once they start receiving their payments. The Department should publish the rates at which people are unsuccessful in their applications for an Alternative Payment Arrangements, and what reasons the Department might give a claimant if it denies their request for more frequent payments. DWP should also ensure that work coaches are making claimants aware of the option of split payments, where a household’s payment can be divided and paid into two separate accounts. (Paragraph 197)

47.Universal Credit works best when it mirrors people’s daily lives. Payments which align with people’s rent schedules could make it easier for claimants to budget and plan. We recommend that the Department explain in response to our report whether it is feasible for landlords to tag the tenancy agreement to the claimant’s Universal Credit claim so that payments are made in line with their rent schedule. If this is not possible, the Department should set out what aspects of the design of Universal Credit it would need to adapt to build in this flexibility for claimants. (Paragraph 198)

48.While Scottish Government data shows a quarter of people revert from More Frequent Payments under Scottish Choices, DWP’s research does not provide a detailed understanding of how the Department monitors how more frequent payments work for people, and what it might to do improve the policy. (Paragraph 201)

49.We recommend that the DWP improve the quality and detail of its published data on alternative payments, by publishing its figures on how many people revert to monthly payments from the twice monthly payment option in England and Wales. DWP should give detail to these figures by publishing analysis on why people may revert to monthly payments and demonstrate how it monitors people’s experiences of Scottish Choices or more frequent payments under APAs. It should use this analysis to better advise claimants and to identify possible improvements to the policy. (Paragraph 202)

Speeding up payments – shortening the fifth week

50.Faster Payments offer the Department a quick and efficient way to pay claimants. They could, if more widely used, reduce the time that people have to wait for a first payment. The Department already has plans to increase its use of Faster Payments. That will have costs and will require work across multiple bodies, including the Treasury and the banks. We recommend that the Department maintain its target to increase its proportion of Payments permitted by banks, to shorten the fifth week of the Universal Credit process. We urge the Department to set out in more detail its proposed strategy for rolling out Faster Payments, including its expected timings and its plans for engagement with the banking sector, in response to this report. (Paragraph 208)

Improving the assessment system

51.It is disappointing that suggestions to improve Universal Credit have apparently been thwarted by an IT system which was supposed to be developed in an agile fashion, yet seems to be anything but. It is unfortunate that such a rigid, clunky IT structure was adopted for UC which makes improvements required by Ministers and needed by claimants harder to implement, adding greater costs to benefit administration. (Paragraph 230)

52.The monthly assessment is a core part of design of Universal Credit for the Department and is the guiding reason behind the five-week wait and payment in arrears. Although the Department says that most people in the wider economy are paid monthly, there is evidence that a significant proportion of people moving onto Universal Credit were paid weekly or fortnightly in their previous job. Even for people who are paid monthly, the recent High Court and Court of Appeal cases which found against DWP show that a rigid assessment still causes fluctuations for claimants, financially disadvantages people and, in some cases, puts people off applying for more stable work. But changing the monthly assessment period would entail a fundamental rebuilding of the entire Universal Credit system. That is not likely to be feasible in the short or even medium term. In the longer term, we would encourage the Department to consider in detail the proposals that have been made for systems that could more flexibly meet claimants’ needs—especially for people who are not paid monthly. (Paragraph 231)

53.We recommend that the Department assesses a model in which it estimates people’s daily pay rate from data it already receives from HMRC, as suggested by Ferret Information Systems, and in which it would make payments from day one of the claim with reconciliation in month two. We request that the Department share information on what data that it receives from HMRC, including whether it knows how frequently people are paid, and makes clear what parts of its system are and can be automated. (Paragraph 232)


54.The coronavirus pandemic has put the Universal Credit system under unprecedented strain. It has also highlighted the strengths of its digital, automated processes: a manual system could not have coped with millions of new claims in such a short time. But that strength can also be a weakness. An automated process cannot be tailored to the specific circumstances of individuals, whose needs may be complex. In making recommendations in this report, we have aimed to balance the need for Universal Credit to be more flexible to meet the varying needs of new claimants while maintaining, as far as possible, the benefits that automation brings. (Paragraph 233)

55.The five week wait for a first payment of Universal Credit is an inevitable consequence of the fixed monthly assessment period. It is very difficult to remove the wait for all claimants without a complete dismantling of the UC system. But there is much more that the Government could and should do to mitigate its effects. The measures we have proposed would, taken together, provide vital support for those claimants who need it most. (Paragraph 234)

Published: 19 October 2020