Universal Credit & Personal Budgeting Support

2 Welfare Reform Our reforms will… The Welfare Reform Act aims to introduce a simpler, fairer benefits system that helps ensure people are better off in work than on benefits. Prepare the long-term unemployed for the world of work Provide unconditional support for those who need it Ensure people receive a fairer pension and are encouraged to save for retirement Help to ensure people are better off in work than on benefits Supporting Families to stay together

3 Welfare Reform We have already begun on this journey… Personal Independence Payment Targeted support, helping disabled people to lead independent lives. Benefit Cap & Housing Benefit Cap Benefits no longer greater than average weekly wage or average rents Greater conditionality Responsibility to actively seek work Jobseeking support Tailored support through the Work Programme, Universal Jobmatch and £1 billion investment in Youth Contract

4 Universal Credit is at the heart of these reforms. It aims to simplify the benefits system and help and ensure people are better off in work than on benefits while providing support for those who need it Welfare Reform

5 Universal Credit Will eventually replace six main working age benefits with one simple payment Is paid monthly Can be paid to people in work or out of work How is it different? Claimants will be able to apply for their benefit online. Nearly 80 per cent of benefit claimants already use the internet, but telephone and other support services will be available if needed. Universal Credit will be paid monthly, in line with most people working in the UK and will include any support for housing costs claimants are entitled to. Universal Credit will require claimants to accept a Claimant Commitment which sets out what is expected in return for receiving assistance, taking into account personal circumstances and capability to earn. Those who break the terms of their commitment will face penalties. Universal Credit Work Services Coaches will help claimants become more independent by supporting them in their worksearch activities. They will help claimant plan and focus their jobsearch as well as set them actions that give them best chance of finding work. Universal Credit will provide claimants with local support if they need extra help with doing things like getting online, budgeting or managing direct payments Universal Credit Income based Jobseekers Allowance Income based Employment and Support Allowance Working Tax Credits Child Tax Credit Income Support Housing Benefit

6 Universal Credit - it’s all about work Universal Credit aims to reward work. No 16 hour rule and no limits on the number of hours someone can work. The Universal Credit payment only reduces gradually as their take home pay increases so claimants won’t lose all their benefits at once if they are on a low income Universal Credit will encourage a new type of relationship with claimants. Work Coaches will help claimants to become more independent by supporting them in their worksearch activities. They will help claimants plan and focus their jobsearch as well as set them actions that give them the best chance of finding work Universal Credit aims to support jobseekers through the Claimant Commitment to raise their expectations of what they can achieve, and to encourage responsibility. Those who are fit and ready for work will be expected to look for a job on a full time basis dependent on circumstances Universal Credit claimants are expected to use Universal Jobmatch, an intelligent job matching service that helps employers to get the best fit for the jobs that they have on offer

7 Delivering the policy - how Universal Credit is rolling out to eligible claimants Universal Credit went live on 29 April 2013 in Ashton-under-Lyne in Greater Manchester From 23 June 2014, more jobcentres across the north west of England gradually started to take claims for Universal Credit From 30 June 2014, we began taking new claims for Universal Credit from couples From 28 July, Universal Credit became available to couples in all live site areas, including across the north west of England and Shotton, Wales. This means that Universal Credit is now available to single and couple claimants in 38 areas of England, Scotland and Wales38 areas We will start to extend Universal Credit to families from autumn 2014 We will make Universal Credit available in each part of Great Britain during 2016 New claims to existing benefits Universal Credit replaces will close down, with the vast majority of the remaining claimants moving onto Universal Credit during 2016 and 2017

8 Universal Credit Delivering the policy Digital Jobcentres Claimant Commitment In-Work Progression Pilots Progressive roll-out of UC sites Pathfinder

9 Universal Credit helps people be better off in work than on benefits by: Introducing a generally more generous work allowance Removing the limit to the number of hours someone can work each week Reducing a claimant’s Universal Credit payment gradually as their earnings increase, so they won’t lose all their benefits at once if they’re on a low income Working families can recover 70% of their actual childcare costs, up to maximum amount From 2016 those paying income tax will be able to claim up to 85% of childcare costs Better off in work

10 Eligibility Claimant goes to GOV.UK to check latest position as Universal Credit gradually expands

11 Claimant Commitment Individually tailored to take account of someone’s circumstances Outlines what a claimant must do in return for their benefit Sets out clearly the consequences of not meeting Claimant Commitment Claimant Commitment reviewed on a regular basis Work Claimant Work Coach Claimant CreateAccept Work Requirements

12 Local Area Support for claimants with complex needs Budgeting Work Online Housing Support for claimants LA Services National Partners Local Partners Jobcentre Plus

13 The LSSF published in February 2013, outlines how claimants with complex needs will be supported to ensure they can make and manage a claim to UC. It is available at: framework framework Based on extensive research into claimant needs and services required to meet those needs, including day visits to over 120 LAs and extensive engagement with the Housing and Voluntary sectors. Written by a task force which includes LA Association reps from England, Scotland and Wales, and co-signed by Sir Merrick Cockell. Following the publication of the LSSF Update and Trialling Plan published in December 2013, we plan to capture learning from the work that has already taken place and trial elements of the LSSF. The Update and Trialling Plan is available at: update-and-trialling-plan update-and-trialling-plan Under the Delivery Partnerships Approach existing local planning forums, usually LA led, will be developed into Local Delivery Groups for UC local claimant support services. These must include DWP and Local Authority representatives but should also include other service providers. They should have the flexibility to plan support services and engage different suppliers according to local circumstances. Local Support Services Framework

14 Local Delivery Group: Example The real purpose of the Partnerships approach is joined up “single claimant journey” for claimants with complex needs, from benefits dependency to independence and, where appropriate, work Community Reps Welfare Rights Digital Charities Adult Social Care Disability charities LA Services (e.g. libraries) Ex-offender Services Adult Education Social Landlords Homelessness orgs Local Authority DWP District/ Partnership Managers

15 Who do we think may require LSS services? Claimants with mental health issues Geographically isolated people Multi Agency Public Protections Agreement (MAPPA) restricted claimants Care leavers People with Financial Inclusion or severe debt issues Domestic Violence victims People with physical and/or sensory disabilities Non EEA citizens – including refugees Entitled 16/17 year olds Prison leavers People with English language limitations Homeless people People with addiction problems (drugs/alcohol/gambl ing) People with literacy/numeracy difficulties Claimants with learning difficulties Those under the supervision of the Troubled Families Initiative

16 REQUIREMENT FOR A PERSONAL BUDGETING STRATEGY IS DRIVEN BY THESE UC CHANGES Housing costs direct to tenant Single payment to household Monthly Payment We want to help people to be able to manage their own finances successfully, whether they are in or out of work Personal Budgeting Support –Why?

17 Alternative Payment Arrangements Financial products Money advice Claimants managing their money Personal Budgeting Support - Overview

18 For a minority of claimants, alternative payment arrangements may be required; these might include  paying the rent directly to the landlord  making more frequent than monthly payments  splitting the payment within the household We will also have the option to make rent payments direct to the landlord if a claimant reaches a certain level of rent arrears. ( Usually 2 Calendar months / 8 weeks ) These alternative payment arrangements will be considered on a case by case basis and assessed on their individual merits. When considering alternative payment arrangements, a series of Tier 1 and Tier 2 factors indicating potential support needs will be used to help to decide if these arrangements are appropriate to an individual. The decision about whether an alternative payment arrangement is suitable will be made by a UC adviser through the PBS process. Alternative Payment Arrangements

19 Tier One factors – Highly likely / probable need for alternative payment arrangements Drug / alcohol and / or other addiction problems e.g. gambling Learning difficulties including problems with literacy and/or numeracy Severe / multiple debt problems In Temporary and / or Supported accommodation Homeless Domestic violence / abuse Mental Health Condition Currently in rent arrears / threat of eviction / repossession Claimant is young either a 16/17 year old and / or a Care leaver Families with multiple and complex needs Tier Two factors - Less likely / possible need for alternative payment arrangements No bank account Third party deductions in place (e.g. for fines, utility arrears etc) Claimant is a Refugees / asylum seeker History of rent arrears Previously homeless and / or in supported accommodation Other disability (e.g. physical disability, sensory impairment etc) Claimant has just left prison Claimant has just left hospital Recently bereaved Language skills (e.g. English not spoken as the ‘first language’). Ex Service personnel NEETs - Not in Education, Employment or Training APA – consideration factors

20 Managed payments will be considered on a case-by-case basis and can be requested by landlords as well as claimants. They can be considered on request from the start of the claim or during the claim if the claimant has accumulated rent arrears which will put their tenancy at risk. We do expect landlords to continue to follow their usual rent collection practices and procedures, making every effort to manage rent payments and recovery of any rent arrears. However, if the claimant is unable or unwilling to resolve payment issues with their landlord UC can then intervene. When a claimant has accumulated one month's rent arrears due to persistent underpayment, we will make an early intervention, reviewing the financial support they need and making managed payments to their landlord if appropriate. If a claimant has accrued two month's rent arrears, we will pay the UC housing element direct to the landlord and if requested take steps to recover the rent arrears through deductions from their remaining UC payment. Managed Payments of Rent

21 Money advice will include:  Online budgeting tools for claimants who can help themselves – e.g. by Money Advice Service  Advice services by external organisations for claimants who need more support with, for example, getting a bank account or doing a monthly budget plan. Local advice services will be delivered by phone and face-to-face by expert providers through the Local Support Services framework. The Local Support Services Framework is available on gov.uk: services-framework A UC personal planner is available on gov.uk to help claimants understand and prepare for financial changes arising from the introduction of Universal Credit: The Planner asks claimants a set of questions about their readiness for claiming Universal Credit and, depending on the answers given, sets out an individual action plan. Money Advice

22 In a speech at the Chartered Institute for Housing (CIH) in June 2013 Lord Freud announced an intention to work with landlords to see what work can be done in advance of Universal Credit to make the transition to direct payments smoother for landlords and tenants. DWP now is working with trade bodies, housing associations and local authorities to explore how we might take this work forward. High level aims: –Working with landlords to help identify tenants who will need some help and support and prepare them in advance of direct payments under Universal Credit; –identifying those who will need to continue to have their Housing Benefit paid directly to their landlord; –move some tenants over to direct payments of Housing Benefit. Work is on-going to finalise the scope of this work and develop a landlord preparation strategy. Preparing people

23 75% of people in employment are paid earnings monthly in arrears. Monthly payment of benefit will prepare households for the reality of budgeting on a monthly income, ease the transition into work, and will make it easier for households to take advantage of cheaper tariffs for essential costs such as utility bills. The majority of Universal Credit claimants will continue to be paid through mainstream current bank accounts. Having a transactional account will enable claimants to make electronic payments out of the account. Most claimants will be paid into a bank account but up to 1.3 million potential UC claimants currently do not use a suitable financial product e.g. POCA which does not have transactional facilities. We are working with banks and other financial institutions to support claimants to open suitable accounts before they migrate to UC. We are investing £38 million into the modernisation and expansion of credit union services. A growing number of credit unions offer current account services as an alternative to mainstream bank accounts. Financial Products

24 Payment Advances Universal credit payments will be issued monthly through the BACS system. The first payment will be made after the initial UC calculation period (one calendar month from the date of claim) + 7 days. New claimants and those transitioning from legacy benefits may be eligible for an advance of their indicative award to help them manage during the first assessment period if they need it. These UC advances will provide an interest-free lending facility for claimants who find it difficult to access mainstream credit, and could offer an alternative to high cost borrowing. A claimant can request an advance of up to 50% of their indicative UC award. The UC Advance (New Claim) can be claimed up to 21 days from the date of claim during the first month and will be issued via BACS after 3 days. The advance will be recovered from the claimant’s UC payments in equal deductions over the following 6 months, starting with their first payment of UC.

25 The UC Personal Planner - aimed at helping financial and digital preparation: Money Advice Service support for UC benefits The Local Support Services Framework 95/uc-local-service-support-framework.pdf Operating Guidance for PBS & APAs 99/personal-budgeting-support-cover-note.pdf 00/personal-budgeting-support-guidance.pdf benefits 95/uc-local-service-support-framework.pdf 99/personal-budgeting-support-cover-note.pdf 00/personal-budgeting-support-guidance.pdf Useful Links