Universal Credit brings together the six main means-tested benefits and by 2019, it is anticipated that around seven million people in Great Britain will be receiving it. It will be provided as a single payment and will be both an in-work and out-of-work benefit.
Universal Credit awards will comprise a standard allowance with additional amounts, to be known as ‘elements’ for children, housing and other needs and circumstances such as disability, childcare and caring.
For those in work, earned income will have the effect of withdrawing Universal Credit support at a uniform rate of 65p in the pound, known as the ‘single taper’, above the earnings disregard level, set by reference to household circumstances. A single person with no dependents will get no disregard.
Figures covering last month show that there have been 110,890 claims made under the scheme, with 74,120 new individuals having accepted their claimant commitment. Of the existing caseload, around two-thirds are in work with the remainder being out of work claimants
There are now an average of around 3,500 to 4,500 new claims a week and by this month, Universal Credit has been rolled out into 49 Jobcentres across Scotland, at this stage mostly covering new, single jobseekers without children.
Inverness, the first Job Centre Plus in Scotland to adopt Universal Credit, is now operational for couples and parents. Scotland has seen around 2,760 UC starts over the last two years.
In 2016, we will begin phasing out “legacy” benefits and migrating existing claimants to UC. All new claims to these benefits will finally be closed in 2017. We are comfortable with the time-periods for introduction of the new system, allowing implementation to be safe and to create a system which is stable in the long term. This will involve learning and developing as roll-out progresses, and examining where improvements can be made and information shared effectively across the country.
Making the administrative side less complicated is having positive effects for Jobcentre staff too, freeing up time and resources to better focus on employment outcomes for clients.
This is a two-sided process. The new Claimant Commitment, now rolling out across Great Britain, places an emphasis on the responsibility of claimants to the taxpayer, mirroring the relationship between those in work with an employer. In exchange for support, there is an expectation to work effectively to find work.
As the changes roll-out, Job Centre Plus advisers are being retrained as work coaches. There will be an aim on personal attention, supporting claimants to progress and to focus on long-term aspirations.
Working in partnership with the Scottish Government and local authorities will be important as the roll-out progresses. These are often useful for signposting purposes as well as accommodating Universal Credit alongside support offered at local level and public service delivery.
The partnership working processes under the Local Services Support Framework have been rebranded under the “Universal Support” name. From the early stages of this process, the Department of Work and Pensions has been flexible as to how this operates differently in Scotland and Wales to take account not only of local differences in local authority services, but now to accommodate devolved welfare benefits included in the current Scotland Bill.
The Convention Of Scottish Local Authorities is part of the Local Services Support Task Group, helping to bring forward partnership working between the DWP and local authorities in Scotland.
Earlier this year, the Smith Commission agreement outlined that the Universal Credit would remain reserved, administered by the DWP, however flexibilities will be enshrined in the new Scotland Bill, representing the close link between certain benefits areas and devolved responsibilities. Housing is the most obvious of these.
The Scottish Government is to have certain UC functions administratively devolved, allowing them to vary the frequency of Universal Credit payments, vary the plans for single household payments and to make separate allowance for payments to landlords or direct payments to housing element claimants.
Of the housing elements devolved, this will include powers to alter the Underoccupancy charge, local housing allowance rates, eligible rent and deductions for non-dependents. This will be part of a substantial package of devolved powers.
While Universal Credit will have the effect of lifting hundreds of thousands of people out of poverty, its most important function is to encourage work – as the most sustainable route out of poverty.
Being out of work not only has negative economic consequences for those who can work, it also has damaging effects on health, self-esteem and skills.
For those in-work, Universal Credit will allow the flexibility to take on more hours without undue reductions to benefits. There are also likely to be positive effects on fraud and error in the benefits system.