HMRC & DWP Hid Universal Credit Migration Study from 2017
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The government has been accused of covering up a significant report on Universal Credit to hide the poor results. The study which looks at the transition from Tax Credits to Universal Credit is dated November 2017. It was carried out jointly by HMRC and the Department for Work and Pensions (DWP) and its results although dated, paints a dire picture for claimants.
The study titled; “The transition from tax credits to Universal Credit: qualitative and quantitative research with claimants,” was snuck on HMRC’s website yesterday, April 4th.
The summary sets out that the purpose of the joint study was to;
“Research to evaluate the experiences of claimants as they stop receiving tax credits and apply for Universal Credit during natural migration in order to understand and improve on their experience.”
It is thought that this was done to assist the two government departments when the now delayed “managed migration” was originally due to being in 2018. This has been pushed back until late 2019 at least while a small scaled pilot is carried out on 10,000 claimants.
The study was carried out in two parts. Firstly, 1,001 Full Service Universal Credit claimants took part in a telephone survey to give their views on the transition from Tax Credits to Universal Credit.
The second phase consisted of face to face interviews with 40 claimants who had a Tax Credit over-payment that they had to repay via Universal Credit.
Telephone Survey Results
We will first look at the results of the telephone survey carried out on 1,004 Universal Credit claimants. Below you can see the breakdown of the claimants by sex, age group & working status etc.
One statistic that stands out is that 55% of respondents stated they needed more help when making a claim. This isn’t an age thing either. While 62% of claimants between 45 and 60 years of age said they needed more help, just under half, 48%, of respondents under 25 said the same thing.
It has long been known that the application process is an issue with one study reporting that 55% of online Universal Credit applications are abandoned. The government’s online verification system, GovVerify is also notoriously unreliable causing claimants to have to manually verify their identity.
One quarter of those being moved over didn’t know what change of circumstances had triggered the need to migrate to Universal Credit. This is no surprise either. Those subject to the new Pension Credit rules from May 15th, also aren’t clear what exact change of circumstances will trigger a move to Universal Credit.
Housing and Childcare Costs
Another part of the study looked at claimants awareness of how childcare and housing costs are paid through Universal Credit.
415 of the 1,004 who took part in the study had children and of them 42% didn’t know that they could claim back Childcare Costs through UC. Childcare payments are causing many issues for claimants as claimants have to pay their childcare provider first and then claim back the money from the DWP.
This has led to parents having to go short on other bills so they can pay for childcare. A new scheme has been set up for parents and carers of children so that they can receive an upfront payment. Those affect should speak to their Work Coach for more information.
When it came to awareness that Housing Costs are paid as part of their UC claim, 32% didn’t know this was the case. 57% of them had been in reci=eipt of Housing Benefit before so would have been used to their landlord getting the money direct.
Housing costs being paid direct to claimants has led to a rise in rent arrears in both private and public sectors. Claimant struggling to survive are having to use their rent money to heat or eat. Some private landlord will now no longer accept Universal Credit claimants due to the risk of non payment or rent.
In Scotland you can ask that your housing costs are paid direct to your landlord whereas the rest of the UK requires you have a valid reason such as; “poor ability to budget” or “existing arrears”.
End of Tax Credit Claim
A staggering statistic is that 41% of those surveyed didn’t know that Tax Credits stopped once they claimed Universal Credit. It also shows that working claimant were much more likely to be aware of this at 64% compared to those with a health condition at 50%.
As seen above, 34% didn’t find out their Tax Credit claim was over until they didn’t get a payment. The is unhelpful as it means they couldn’t budget to take this into account.
In the telephone interviews, 61% said they had a Tax Credit over-payment. However, three-quarters only found this out once they claimed UC. That figure jumps to 80% for those out of work or with a health condition.
The recover of over-payment is one of the real issues with many claimants not knowing it would automatically taken from their UC claim. The Work and Pensions Committee have raised the issue of deduction such as TC repayments as a reason people are ending up in debt.
First Payment Delays and Debt Issues
Of those surveyed only 25% said they had NO PROBLEM keeping up with bills and other financial commitments. That leaves three-quarters struggling in some way. 14% said is a constant struggle. Given that Tax Credits are predominantly families with children, this paints a worrying picture.
Of those struggling 15% told the DWP that was still the case more than three months after their first payment. Nearly two-thirds said difficulties started from the day they claimed.
Universal Credit is well known to be pushing people into debt and hardship. Last year foodbank charity Trussell Trust found that foodbank use in UC areas rose by 52% and 70% of people they asked had been forced into debt directly because of the new benefit.
The report also talked about advances and claimants awareness of them. While just over half did know they could take an advance only 51% stated they took one.
One of the main reasons for this is what I have been saying before. It gets you into debt from the outset. Have 30% of your income taken because you couldn’t wait six-weeks for your first payment is punitive and unfair.
Advances are not the answer to Universal Credit’s five-week wait first payment wait. A new and fairer system need to be designed so claimants aren’t left struggling for months.
Another issue cited with recovery of over-payments through UC was the lack of communication. One couple with children told the surveyors;
“The problem is you can’t just not tell me where it’s going – [it’s] the lack of communication [that is the problem]…I have to ring you 6 times, email you 3 or 4 times on my journal…no one seems to understand.”
I can attest to this. I only found out I had a TC over-payment once they’d taken it from my benefit payment. When I called to ask for details the DWP couldn’t tell me what it was for. After contacting the HMRC, putting in a Data Access request only then did I find out it was from 2011 and had already been repaid.
Over-payments were also cited as the main reason, 41%, that claimants contacted the HMRC and DWP. This isn’t much help when they can’t answer your query though.
As can be seen above, the overall satisfaction with the transition from Tax Credits to Universal Credit is poor. Those not working or with a health condition seem particularly unhappy with the process.
This fits with other studies carried out. Sick and disabled people often struggle with the process and their is little help offered to them despite the DWP claiming it’s there.
Here are three accounts cited in the report about the difficulties claimants faced because of the transition;
“I panicked…£150 doesn’t go far over five weeks… because I didn’t know I was going to have to wait that long, especially when you are used to getting an amount each week” (Lone parent, working)
“I waited two weeks before calling the number and then they said the money might take another 5 or 6 weeks. I was quite shocked actually as I needed the cash to pay my rent … I did take their loan … but still then I did nothing for 5 weeks… did not go out, did not see anyone… only bought very cheap food” (Single, not working)
“I would have actually liked written confirmation that I am on UC, or ‘Welcome to UC and the new system’, or something to say ‘please check your journal on a regular basis if you have any queries’.” (Couple, employed)
It is clear that the five week wait is causing significant issues along with the DWP’s lack of explaining the process. Amber Rudd said in January that she is “happy” with the current five-week period and has no plans to change it.
She has ignored all the charities and professionals who have cited it as one of the main issues with the benefit. It is a driver of the rise in foodbank use.
Whilst this data is from 2017 the transition from Tax Credits has changed little since then so it is still relevant.
I only hope that this study along with the managed migration pilot scheme, are used to improve the process so that claimants suffer less hardship. However, given previous form, I doubt that will happen. Managed migration was only delayed because it faced a massive defeat in Parliament.