Impact of Universal Credit on Claimants

On 16 November 2017, the House of Lords is due to debate a motion moved by Baroness Hollis of Heigham (Labour) that “that this House takes note of the impact of Universal Credit on claimants”.

The Government is currently rolling out Universal Credit (UC). UC is a significant reform of the way in which social security payments are delivered. It is intended to replace the following forms of welfare with one single payment: working tax credit; child tax credit; income based jobseeker’s allowance; income support; income related employment and support allowance; and housing benefits.

The timetable for the roll-out of UC has undergone a series of changes. The Coalition Government had originally intended to complete the roll-out of UC to all claimants by 2017–18. However, difficulties with the system were identified during the process of establishing pilot schemes in 2013. The handling of this initial roll-out was subsequently criticised by the National Audit Office. As a result, the Department for Work and Pensions (DWP) changed its implementation plans, instead rolling out UC on a limited basis, primarily targeting claimants of jobseeker’s allowance. The roll-out of the final version of UC to individual jobcentres began in 2016, at a rate of five jobcentres per month. The Government intends to complete the process by 2022.

The Government has argued that UC has so far been successful, pointing to an assessment that showed UC claimants are 3 percent more likely to go into employment than jobseeker’s allowance claimants. It has used this as justification for the increase in the rate of the roll-out taking place over the course of 2017 and 2018. The Opposition has stated its support for the principle that the social security system ought to be simplified. However, it has criticised the way UC has been designed and rolled out. It has also argued that the Government has used UC as a means of cutting spending on welfare.

Both the Opposition and the House of Commons Work and Pensions Committee have also criticised the length of time that new claimants must wait for their first UC payment, arguing that this is leading claimants into poverty and unable to pay for their accommodation. However, the Government has argued measures that it has put in place, including the option for claimants to receive an advance payment, are sufficient to mitigate the impact of this waiting period.