The government has overhauled its proposals for transferring people on to universal credit after its own expert advisers issued a stark warning that it was not doing enough to stop thousands of vulnerable claimants being put at risk of hardship.
In a bid to address concerns raised by campaigners, claimants and MPs, the work and pensions secretary, Esther McVey, announced a raft of changes on Monday to plans governing the transfer of 3 million people on to the new benefit.
The so-called “managed migration” of universal credit claimants has become a major political concern, with two former prime ministers, John Major and Gordon Brown, joining MPs in warning that mishandling the process could trigger a poll tax-style revolt.
Those who do move through “managed migration” will be given the following extra help:
-Old-style benefits will continue for 2 weeks – helping bridge the gap between payments. These are income-based Jobseekers’ Allowance and ESA, and Income Support. This means many people will have a three-week gap instead of five. (Housing benefit is already paid on for two weeks).
-A one-month deadline to move to Universal Credit, once you’ve been notified, will be extended to three months. And people won’t be penalised for missing it by up to a month.
-Advance loans which help people bridge the gap will only be clawed back from 30% of relevant benefits per month, not 40%. The payback period will also extend from 12 to 16 months from October 2021.
-Existing business owners who move onto UC will get a new one-year “grace period” exempting them from the “Minimum Income Floor”. The MIF has been attacked because it limits claimants to getting no more benefits than they would get if they were on minimum wage – even if they’re getting far loss.
-The transition policy of disregarding £2,500 a month of surplus earnings (this protects people who have fluctuating wages) will extend from 2019 to 2020.
The Disability Benefits Consortium, which represents more than 80 disability charities, said today it was pleased Ms McVey listened.
But spokesman Rob Holland warned “large numbers could still fall through the gaps”.
He added: “The Government cannot escape the fact that close to a million disabled people will be worse off on UC by more than £200 a month – despite the measures announced in the Budget.”
Today’s announcement is separate to a £1.7bn-a-year package, also in the Budget, to make “work allowances” – the amount people can earn before benefits are clawed back – £1,000 a year more generous.
Last week’s announcement will apply to all claimants with children or a disability and improve their lot by just over £600 a year.
It now appears many of today’s changes were prompted by the SSAC report.
The report was written at the beginning of October and handed to the Tory government behind closed doors.
It was finally released to the public today – at at the same time as the raft of changes responding to what it said.
Sir Ian Diamond, author of the report and the government’s top welfare advisor, said he had been “particularly struck by the degree of anxiety” from claimants.
He heard people had been forced into rent arrears and driven to food banks.bOne diabetic welfare claimant’s mental health spiralled after they were left without enough cash to buy food.
SSAC chief Sir Ian warned the challenge to the Department for Work and Pensions (DWP) was “exceptionally difficult” and any problems will be “brought into greater relief” when benefit claimants start being transferred from July 2019.
Writing before today’s changes were announced, SSAC chair Sir Ian said: “We have taken the view that the migration plans should, as far as is possible, minimise the risk to claimants.
“They do not yet do this.
“In fact, in some respects, the Department has chosen to reduce its own risk by transferring it to claimants – most obviously, through the proposal to require all existing claimants to make a new claim for Universal Credit.”
The SSAC said the timetable for rolling out UC was “unrealistic”. In response, it’s already been pushed back from March 2023 to December 2023. And only 10,000 people will be “migrated” in the first year from July 2019.
The SSAC also called for a full impact assessment to show how UC is hitting the homeless and single parents. In response, DWP chiefs plan to publish an impact report after the first year’s test phase.
Sir Ian said tonight he was “delighted” at the changes but “a lot of detail still has to be worked out”.
He added he was “disappointed” that people will still have to make their own Universal Credit claims – rather than being moved over automatically.
Child Poverty Action Group chief executive Alison Garnham added: “It is the government’s responsibility to ensure benefit recipients are not left in hardship as a result of managed migration but move to universal credit smoothly and safely without income gaps.
“The DWP could achieve that by setting up an automatic migration process with protections in law to ensure no existing benefit claim is closed until a successful universal credit claim is established.”
Mind spokeswoman Vicky Nash said: “These regulations have confirmed what we have long feared and argued against – that in the move over to Universal Credit (UC) three million people, including hundreds of thousands of people with mental health problems, will be forced to make a new claim.
“This risks many being left without income and pushed into poverty.”
The package of help is included in new laws on “managed migration” – which Tory MPs and the Work and Pensions Committee had threatened to torpedo in a Commons vote.
Labour demanded a full debate on the floor of the House of Commons.
Shadow Work and Pensions Secretary Margaret Greenwood said the “chaotic and damaging programme has been pushing families into poverty”.
Shadow Disabilities Minister Marsha De Cordova added: “Universal Credit has been a shambles – for families, children slipping into poverty & ill and disabled people. Managed migration must be halted immediately, before more are pushed into destitution by this government.”
But Ms McVey claimed the changes showed “this is a department that listens”.
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