A new report from the Public Accounts Committee (PAC) states that any benefits transition failings from the Department for Work and Pensions (DWP) "will lead to real-world misery for thousands".
In a report titled Progress in implementing Universal Credit, the committee urges the DWP to support benefits claimants transferring over from legacy benefits to Universal Credit.
The committee’s concerns have been echoed by charities that warn that the process has already seen thousands of people drop off benefits altogether.
Welfare reform was announced in 2010 with Universal Credit introduced as an integrated benefit, replacing six means-tested legacy benefits for working-age people. The DWP is in the process of moving 900,000 claimants of legacy benefits to Universal Credit.
But the PAC, a committee that examines the value for money of Government projects and programmes, has warned ministers about fraud and error rates during the switch and expressed scepticism regarding Universal Credit’s hoped-for economic benefits.
The DWP expects about 4% of claimants of its own legacy benefits would not switch to Universal Credit. The department also said it was not concerned that, so far, 21% of tax credits claimants had not transferred to Universal Credit when invited to do so. However, it has only limited assurance that people who did not switch over are not missing out on benefits they are entitled to.
Financial hardship predicted for many
The PAC report warns that even a small proportion of people not transferring to Universal Credit could translate into substantial numbers facing financial hardship. The report says that, to address this, the DWP should explain how it will ensure it is providing the right level of support to claimants moving to Universal Credit, including face-to-face support and through the ‘Help to Claim’ service provided via Citizens Advice.
The report goes on to say that the PAC is not convinced that Universal Credit is achieving the scale of expected economic benefits. The Government predicts that Universal Credit will generate £10.4bn of benefits per year once fully rolled out, with £6.1bn coming from increased employment.
However, PAC analysis of DWP’s evidence base that Universal Credit is benefitting the labour market found that the DWP “cherry-picked” positive facts and also made other assumptions not supported by evidence.
Dame Meg Hillier MP, PAC chair, said: “Our committee has scrutinised Universal Credit since its inception. We must not forget how massive a change it is to how benefits are delivered, impacting millions of people. This means if the transition from legacy benefits to UC fails even an apparently small proportion of people, it will lead to real-world misery for thousands.
“The DWP must make sure that people are not cast into financial hardship due to a bureaucratic change, and that robust support is in place for those vulnerable claimants who need it most.”
Increase in fraud and errors
The PAC’s inquiry questioned whether, given high levels of fraud and error compared with the past, Universal Credit really is less prone to fraud and error compared with the legacy benefit systems.
The committee said that, rather than providing assurance about the actions it is taking, the DWP “fell back again” on its explanation of a “societal increase in the propensity to commit fraud”.
Michael Clarke, head of information programmes at Turn2us, said: “Many of those still claiming legacy benefits have complex needs and circumstances and may lack digital access and capability around managing their benefits.
“It is vital that the process of contacting and supporting these people is not rushed, ensuring they are given adequate time, accessible information and personalised support to move over to Universal Credit. Disruption to benefits payments alongside the five-week wait for Universal Credit could cause serious harm to their finances and lives.”
Advice for people receiving legacy benefits
First, use the Turn2us benefits calculator to do a benefits calculation to check if you are getting all the benefits you are entitled to now. It will also tell you if you are better or worse off on Universal Credit.
If you are worse off, you should wait until you receive your migration notice from the DWP before moving to Universal Credit. If you do this, you will get an extra amount called transitional protection to ensure you get the same amount of money in benefits when you move.
If you find you are better off on Universal Credit, you may want to get independent advice to check if moving to Universal Credit early is your best option.
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