14 January 2019
Round-up of recent Universal Credit announcements
There have been various official announcements and news stories about Universal Credit in the first two weeks of 2019, including -
- the Secretary of State's full speech at Kennington Jobcentre (11 January 2019).
- the Statement by Minister of State for Employment - Alok Sharma, (11 January 2019).
Please note: we are working hard to update all of the relevant revenuebenefits pages to provide further detail.
The Rt Hon Amber Rudd, the Secretary of State for the Department for Work and Pensions, announced in the House of Commons on 7 January 2019 that the transfer of claimants from legacy benefits to universal Credit (UC) would commence under a managed migration pilot, due to start in July 2019 for a maximum of 10, 000 awards and that the full managed migration exercise would commence in 2020.
Our understanding is that current plans are for the pilot to end in July 2020 and scale-up of migration to start in November 2020 with a finish date of December 2023. Regulations for the managed migration were laid in November 2018, however those regulations have been withdrawn. They would have covered both the pilot/test phase and the full scale-up of managed migration. Instead, new regulations were introduced on 14 January which cover only the pilot phase, meaning further legislation will be needed in order to continue with managed migration after the pilot finishes.
The draft regulations can be found here. In addition to setting out the high level migration process and introducing a cap of 10,000 awards for the pilot they also:
- allow for a transitional element to be considered, calculated, paid and administered to provide protection for existing benefit claimants who, upon managed migration, would have a lower entitlement to UC than their total existing benefit awards;
- introduce, from July 2019, Discretionary Hardship Payments that can be made to those who have gone through the managed migration process and appear to be in hardship as a result of the termination of their existing benefits or if any other issues related to managed migration have resulted in hardship;
- introduce, from July 2020, a two-week run-on of Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance for those whose existing benefit awards have terminated as a result of their claim for Universal Credit;
- provide for a 12-month period when the Minimum Income Floor will not apply to self-employed claimants who are managed migrated and, from September 2020, also not apply to those who are naturally migrated in self-employment and all those existing UC claimants who become new gainfully self-employed;
- make provision so claimants who are receiving an existing benefit and are also in education, are able to meet the UC entitlement conditions when they manage migrate to UC;
- introduce ‘transitional payments’ for those eligible claimants who were in receipt of the Severe Disability Premium (SDP) and have already moved to UC through natural migration by providing an ongoing monthly payment, the provision of an additional lump-sum payment to cover the period since they moved; and for converting this payment to become the transitional element so it can be administered and terminated in the same way.
Claimants paid four-weekly
In response to a question about claimants who get paid on 4-weekly cycles and can appear to be paid twice in one assessment period, the Minister stated that the DWP had ‘recently updated the guidance for universal credit so that work coaches can adjust to ensure that where the situation occurs, appropriate adjustments are made'. We understand that there has been a Freedom of Information request for a copy of the guidance.
A commitment was given that the DWP would look into the provision of a landlord portal for private landlords which would allow them to ask that the housing element of a claimant’s UC award be paid directly to the landlord.
In cases where the initial month's childcare costs need to be paid in advance and prevent a claimant from starting work, the Flexible Support Fund should be used to help smooth the transition and there will be some flexibility when parents are unable to report their childcare costs immediately, so that these costs will be reimbursed. (by that, we assume the costs will be accepted in calculating the UC child care element – which is not the same as full reimbursement)
2 Child limit
The 2-child limit policy in UC claims will not be applied to children/qualifying young people who were born before April 2017. This is a reversal of the previous position and brings UC into line with the current approach in tax credits. This is to be effective from 1 February 2019 and the regulations have been laid. The 2 child limit policy will continue to apply to children born on or after 6 April 2017.
Severe Disability Premium recipients
Alok Sharma MP confirmed that those who receive a Severe Disability Premium with an existing benefit will be prevented from naturally migrating to UC (claiming UC) until they are managed migrated, when the rules for transitional protection will be able to apply to them.
This restriction will be introduced via an SDP Gateway introduced into UC legislation (via negative procedure), effective from 16 January 2019 and will mean that these claimants will not be able to claim UC during this interim period. The regulations are:
- the Universal Credit (Transitional Provisions) (SDP Gateway) Amendment Regulations 2019
- the Universal Credit (Transitional Provisions) (SDP Gateway) (Amendment) Regulations (Northern Ireland) 2019
As mentioned above, the draft managed migration regulations also introduce ‘transitional payments’ for those eligible claimants who were in receipt of the Severe Disability Premium (SDP) and have already moved to UC through natural migration by providing an ongoing monthly payment, the provision of an additional lump-sum payment to cover the period since they moved; and for converting this payment to become the transitional element so it can be administered and terminated in the same way.
The DWP are to review their use of more flexible payments, including how to identify people who may struggle to budget monthly payments.
Household payments are to be paid to the main carer, with a commitment to begin making that change later this year.
Judicial Review on earnings received during an assessment period
The four cases in the Judicial Review involved UC claimants who received two wage payments in one assessment period. This was because their normal pay day fell on a weekend or non-banking day and so was paid early. The High Court found that DWP have been interpreting their regulations incorrectly and that:-
‘In the circumstances of this case, the defendant wrongly interpreted regulation 54 of the Regulations and wrongly assumed that where salaries for two different months were received during the same assessment period, the combined salaries from the two months were to be treated as earned income in respect of that assessment period. As a result, the decisions under challenge in this case are flawed. Further submissions will need to be made to identify the appropriate remedy.’
It is not yet clear whether DWP will appeal this decision. The full decision is: R (on the application of Johnson and others) v Secretary of State For Work and Pensions  EWHC 23 (Admin) (11 January 2019)
In a written statement, it was confirmed that from 15 May 2019, mixed age couples must claim UC. Mixed age couples are those where one person has reached state pension credit qualifying age and the other is under that age. Currently, they can choose whether to claim pension credit or UC. That choice will be removed from 15 May 2019 and they will need to claim UC.