universal credit timeline

Universal Credit Core Deck v5 December 2013

1

Universal Credit: Budgeting Support and Payments

Centre for Economic and Social Inclusion20th December 2013

Felicity RidgwayUC Budgeting Support and [email protected]

2 Universal Credit Core Deck v5 December 2013

Test & Learn

End-state Service Development

2014 2015 2016 2017

Transition & Migration

Couples

Children

North West

Expand scope, starting in Summer 2014

Expand scale, once scope expansion is safely tested

Claimant CommitmentDigital JobcentreUniversal Jobmatch

Universal Credit timeline


Roll out from October 2013 – Spring 2014

• October to Spring 2014: Progressive roll out of Universal Credit begins to a further 6 Jobcentres across England, Scotland & Wales, with offices taking new claims to Universal Credit:– Hammersmith, Rugby and Inverness are now taking Universal Credit new

claims – Bath, Harrogate & Shotton will take new claims by Spring 2014

• October to Spring 2014: Claimant Commitment rolling out nationally to around 100 Jobcentres a month for new claimants to Jobseekers’ Allowance, to support cultural transformation:– 25,000 Jobcentre Plus advisers retrained to deliver Claimant Commitment

• From October: 11 in-work progression pilots being delivered.

• From October: Improved digital services rolling out nationally across Jobcentre Plus:– 6,000 new computers will be installed across the country, helping

claimants search and apply for jobs online, claim on-line benefits and improve their digital skills.


Roll out from Summer 2014

• We will continue to expand our current live service and functionality:

– From summer 2014 we will progressively start to take new claims for Universal Credit for couples

– From autumn 2014 we will take new claims from families

– Once it’s safely tested we will also expand the roll out to cover more of the North West of England.

• Our plans will allow us to make Universal Credit available in each part of Great Britain during 2016:

– New claims to existing benefits Universal Credit replaces will close down

– The vast majority of the remaining claimants moving onto Universal Credit during 2016 and 2017.


Pathfinder

Universal Credit Pathfinder

• Pathfinder is testing the new system with local authorities, employers and claimants in a live environment.

• It provides an opportunity to learn lessons before extending the service and bringing in more complex cases.

Scope

• Pathfinder focuses on new single, unemployed people, with or without rented housing costs, in selected areas in Tameside, Wigan, Oldham and Warrington local authority areas.

• It started with Ashton-under-Lyne on 29 April. Wigan joined on 1 July, Oldham and Warrington started on 29 July.


Pathfinder update

• All Pathfinder locations of Ashton-under-Lyne, Wigan, Warrington and Oldham are now taking claims to Universal Credit.

• The majority of claims from Universal Credit claimants in all 4 Pathfinder locations have been made online.

• Already seeing people moving into work as you would expect with this claimant group.

• Claimants making use of services provided by local authorities– Internet Access Devices– support to make a Universal Credit claim on line– Personal Budgeting Support

Early evaluation of Pathfinder:• Almost two-thirds of Universal Credit claimants think that the new system

provides a better financial incentive to work• Universal Credit claimants are doing more to get into work than jobseekers

claiming under the current system• 90% of Universal Credit claimants are making their claims online and over

three-quarters (78%) of Universal Credit claimants also feel confident about their ability to budget with monthly payments


Local Area

Support for claimants with complex needs

BudgetingWork

OnlineHousing

Support for claimants

LA Services

National Partners

Local Partners

Jobcentre Plus


REQUIREMENT FOR A PERSONAL

BUDGETING STRATEGY IS DRIVEN BY THESE

CHANGES

Housing costs direct

to tenant

Single payment to household

Monthly Payment

We want to help people to be able to manage their own finances successfully, whether they arein or out of work

Personal Budgeting Support - Context


Alternative Payment

Arrangements

Moneyadvice

Financial products

Claimants managing their

money

Personal Budgeting Support - Overview


• For a minority of claimants, alternative payment arrangements may be required; these might include

– paying the rent directly to the landlord

– making more frequent than monthly payments

– splitting the payment within the household

• We will also have the option to make rent payments direct to the landlord if a claimant reaches a certain level of rent arrears.

• These alternative payment arrangements will be considered on a case by case basis and assessed on their individual merits.

• When considering alternative payment arrangements, a series of Tier 1 and Tier 2 factors indicating potential support needs will be used to help to decide if these arrangements are appropriate to an individual.

• The decision about whether an alternative payment arrangement is suitable will be made by a UC adviser through the PBS process. Information from a third party i.e. the claimants’ representative, and / or their landlord can be used to inform a decision.

• Subject to a review, the goal being that claimants move to the standard payment over time supported by money advice.

Alternative Payment Arrangements


Tier One factors – Highly likely / probable need for alternative payment arrangements

Drug / alcohol and / or other addiction problems e.g. gambling

Learning difficulties including problems with literacy and/or numeracy

Severe / multiple debt problems

In Temporary and / or Supported accommodation

Homeless

Domestic violence / abuse

Mental Health Condition

Currently in rent arrears / threat of eviction / repossession

Claimant is young either a 16/17 year old and / or a Care leaver

Families with multiple and complex needs

Tier Two factors - Less likely / possible need for alternative payment arrangements

No bank account

Third party deductions in place (e.g. for fines, utility arrears etc)

Claimant is a Refugees / asylum seeker

History of rent arrears

Previously homeless and / or in supported accommodation

Other disability (e.g. physical disability, sensory impairment etc)

Claimant has just left prison

Claimant has just left hospital

Recently bereaved

Language skills (e.g. English not spoken as the ‘first language’).

Ex Service personnel

NEETs - Not in Education, Employment or Training

APA – consideration factors


Money advice will include:

– Online budgeting tools for claimants who can help themselves – e.g. by Money Advice Service

– Advice services by external organisations for those who need more support with, for example, getting a bank account or doing a monthly budget plan.

• Local advice services will be delivered by phone and face-to-face by expert providers through the Local Support Services framework. The Local Support Services Framework is available on gov.uk:

https://www.gov.uk/government/publications/universal-credit-local-support-services-framework

• A UC personal planner is available on gov.uk to help claimants understand and prepare for financial changes arising from the introduction of Universal Credit:

https://secureonline.dwp.gov.uk/universal-credit-preparation/

• The Planner asks claimants a set of questions about their readiness for claiming Universal Credit and, depending on the answers given, sets out an individual action plan.

Money Advice


• 75% of people are paid earnings monthly in arrears. Monthly payment of benefit will prepare households for the reality of budgeting on a monthly income, will ease the transition into work, and will make it easier for households to take advantage of cheaper tariffs for essential costs such as utility bills.

• The majority of Universal Credit claimants will continue to be paid through mainstream current or basic bank accounts.

• Having access to a transactional account will enable claimants to make electronic payments out of the account.

• Most claimants will be paid into a bank account but up to 1.3 million potential UC claimants currently do not use a suitable financial product e.g. POCA which doesn’t have transactional facilities.

• We are working with banks and other financial institutions to support claimants to open suitable accounts before they migrate to UC.

• We are investing £38 million into the modernisation and expansion of credit union services. A growing number of credit unions offer current account services as an alternative to mainstream bank accounts.

Financial Products


Landlord/Claimant Preparation

• In a speech at the Chartered Institute for Housing (CIH) in June 2013 Lord Freud announced an intention to work with landlords to see what work can be done in advance of Universal Credit to make the transition smoother for landlords and tenants.

• DWP now is working with trade bodies, housing associations (including stock owning Local Authorities) to explore how we might take this work forward.

• High level aims:

– Working with landlords to help identify tenants who will need some help and support and prepare them in advance of the changes Universal Credit will bring;

– identifying those who will need alternative payment arrangements;

– move some tenants over to direct payments of Housing Benefit early.

• Work is on-going to finalise the scope of this work and develop a landlord preparation strategy.


UC Payments

• Universal credit payments will be issued through the BACS system.

• Each claimant will be given a UC payday based on their date of claim. Once they have this payday, UC will be made on the same date each month thereafter. If the payday falls on a weekend or bank holiday, the payment will be made on the first closest working day prior to the normal payment date.

• The first payment will be made after the initial UC calculation period (one calendar month from the date of claim) + 7 days.

• New claimants and those transitioning from legacy benefits may be eligible for an advance of up to 50% of their indicative award to help them manage during the first assessment period if they need it.

• These UC advances will provide an interest-free lending facility for claimants who find it difficult to access mainstream credit, and could offer an alternative to high cost borrowing.


01/01Date of Claim

+7 days

1st UC PaymentCalc/notification

to claimant:01/02

1st UC Payment

Received by Claimant:

07/02

Regular UC Assessment Period

2nd UC PaymentCalculation:

01/03

2nd UC PaymentReceived by Claimant:

07/03

31/01 28/02

A Standard Claim…

Example claim


• A claimant can request an advance of up to 50% of their indicative UC award.• The advance can be claimed at any point during the first month and will be issued via BACS after 3 days.• The advance will be recovered from UC payments in equal deductions over the following 6 months.

+7 days31/01 28/02

Regular UC Assessment Period

(35 days)

1st payment:£1000

2nd payment:£1000

Standard Monthly Payment

Payment minus repayment of UC advance(new claim)

UC Advance(up to 50%)£500

£916.67 £916.67

(3 days)Example claim

UC Advances: new claims


Thank you and any questions?

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