1. Universal Credit & Benefit Cap Cheryl Ward & Mike Dann December 2015

2. A claimant commitment like a contract of employment “Working with you to help you and your family become more independent” Not able to work at all We will support you Too committed to work right now We will support you or (It pays to give work a go) Too sick to work right now We will support you and (It pays to give work a go) Not working It pays to give work a go or you must give work a go Working but could do more Earning all you can be expected It pays to work more or you must work more We will support you

3. 3 Universal Credit: labour market transformation UC activates more people: circa 2 million more claimants will be brought into an active benefit regime It rewards work It places greater expectations on claimants provides staff with increased flexibility and rebalances the relationship between claimant and Coach It replicates the world of work It is an in and out of work benefit… …and it is transformative for the claimant, employers, partners and staff Tax Credits – no requirements 4,400,000 claimants JSA – worksearch regime 850,000 claimants ESA WRAG – prepare for work 650,000 claimants Income support lone parents – keep in touch - 450,000 Partners of claimants – limited or no reqts 700,000 claimants ‘CURRENT’UNIVERSAL CREDIT Workless / very low earning households– intensive worksearch regime 1,900,000 claimants Workless / very low earning households – LCW & parents 3 and 4 year olds – work preparation 700,000 claimants Parents 1 and 2 yr olds - keep in touch - 300,000 Households “working enough” – no requirements 4,000,000 claimants Households “working could do more” – light touch & trials 1,000,000 claimants HB / CTC only – no requirements 350,000 claimants ESA assessment phase – no requirements – 250,000 ESA support Group, carers, IB reassessment 850,000 claimants ESA support Group, carers, IB reassessment 1,000,000 claimants Note: figures reflect anticipated volumes of income related benefit claimants in UC steady state ( approx.2017 / 18) Official - Sensitive

4. 4 65% of people are finding Universal Credit a better financial incentive to work. Households on Universal Credit do more to find work – nearly double the number of hours of job search compared to Jobseekers Allowance. 92% of claimants agreed they were encouraged to find work, or increase the amount they were working. Those who are on Universal Credit report that they are working more over a six-month period. People find Universal Credit easier to understand. People consider Universal Credit a better reward for additional work. Universal Credit – experience so far

5. 5 Universal Credit Caseload

6. 6 Local Delivery Partners The purpose of the partnerships approach is joined up “coherent claimant journey” for claimants with complex needs, from benefits dependency to independence and, where appropriate, work

7. 7 Alternative Payment Arrangements Financial products Money advice Claimants managing their money Personal Budgeting Support Splitting the payment within the household Basic Bank Accounts from major banks from end 2015 Made by UC decision maker via PBS process 1.3 million potential UC claimants do not use a transactional bank account to manage benefit payments Personal planner on GOV.UK Available to anyone on UC Credit Union jam jar accounts More frequent than monthly payments Paying rent direct to landlord Part of work coach role Face to Face and online tool

8. 8 Registered Social Landlords(RSL’s) As part of the live service roll-out we have picked up communications with RSL’s through the Local Authority. UC brings significant changes to RSLs. Currently they receive over 98% of HB payments direct. We introduced data sharing legislation in January 2015 to help manage claimant payments. We introduced an increase of recovery rates for rent arrears from November 2014. We are developing closer working relationship with landlords. Universal Credit and Housing Costs

9. 9 Universal Credit New Claims

10. 10 Universal credit is working Doing more to find a job - households on Universal Credit do more to find work – nearly double the number of hours of job search compared to Jobseekers Allowance. 71% of Universal Credit claimants moved into work in the first nine months of their claim, compared with 63% of comparable Jobseeker’s Allowance claimants. This means that for every 100 Jobseeker’s Allowance claimants who find work, 113 Universal Credit claimants will have moved into employment. More support to find work - 92 per cent of claimants agreed they were encouraged to find work, or increase the amount they were working. Working more - those who are on Universal Credit report that they are working more over a six-month period Easier to understand - people find Universal Credit easier to understand. Better reward for additional work – people consider Universal Credit a better reward for additional work.

11. 11 Live Service vs Digital Service - Example Volumes

12. 12 In Work Progression Pilots Being delivered as part of the Plymouth UC Roll-out and in Cornwall From March 2016 This introduces for the first time, active support and encouragement for claimants who are in low-paid work, or in low- earning households, to earn more and become more independent and self-sufficient. Universal Credit Claimants, who are eligible for the Trial, will be identified in Work Services Platform. This will automatically allocate claimants to 1 of 3 IWP Groups using their National Insurance numbers. This will determine the type of claimant contact over the period of the Trial. The Trial Groups are: Group 1 – Work Search Reviews every 8 weeks Group 2 – Fortnightly Work Search Reviews Group 3 – current UC light Touch Regime

13. 13 What is ‘digital UC’? Ministers have set out plans to expand the full Universal Credit service from May 2016, area by area. This will give claimants greater control over their claim through their online account. The full service will be expanded for all claimant groups and in rollout areas people will no longer be able to make new claims to benefits under the old system.

14. 14 Differences between Live service & Digital Gateway changes to enable all UC claimant groups to claim Creation of UC account Interaction with Work Coach and UC Service Centre via on-line account Different rules at outset of claim where claimant will have greater responsibility Changes to child care allowances: Treatment of earnings Re-awards & reclaims

15. Claimant opens account to claim UC online. It’s the claimants account to manage and interact with the DWP. Claimant may attend claimant commitment interview dependant on workgroup. Here they will receive tailored support from a work coach. A relationship is built with a mixture of face to face and digital / remote coaching using To Do’s and Journal entries. Payments are shown too. The service adapts to claimants circumstances and the coaching channel shifts with it. The more self sufficient – the more digital the interaction As the claimant finds work they can report this online and still receive support as their UC entitlement decreases. Support continues digitally until claimant is on a zero payment. However if their situation changes, they can report this online. After six months of continuous no entitlement then the claim closes.

16. 16 Benefit cap the current assumption is that the new cap is expected to be in place across the country in 2017. The level of the benefit cap will change to £23,000 in Greater London and £20,000 in the rest of Great Britain for couples with or without children, and lone parent households. The capping level for single adults without children will be £15,410 in Greater London and £13,400 in the rest of Great Britain.

17. 17 Benefit Cap Claimant notifications and claimant support will commence from spring 2016. Application of the new benefit cap changes will commence from autumn 2016 through to early 2017. We envisage that the new cap levels would be applied much as the existing cap is applied now: For current benefit claimants: when a household’s total benefit entitlement exceeds the cap the local authority will reduce the level of housing benefit by the excess amount subject to the amount of Housing Benefit in payment; or For Universal Credit claimants: when a household’s total benefit entitlement exceeds the cap the Universal Credit award will be reduced by the excess amount by DWP Decision Makers.

18. 18 Benefit Cap Expected volumes to be published on 12/02/16 Letters to those affected will start from 09-23/05/16 Two groups,those that are currently capped and newly identified claimants All claimants to receive employment support which will include access to work programme support products or current work coach options.

19. 19 Benefit Cap – Benefits included in the Cap Bereavement Allowance Maternity Allowance Universal Credit Widow’s Pension Widowed Parent’s / Widowed Mothers Allowance Carer’s Allowance Jobseeker’s Allowance Employment and Support Allowance Child Benefit / Child Tax Credit Guardian’s Allowance Housing Benefit Incapacity Benefit Income Support Severe Disablement Allowance

20. 20 Fee Free Bank Accounts announcement follows last Christmas’ landmark agreement between the government and the banking industry to establish new basic bank accounts that will end bank charges if a direct debit or standing order fails. Basic bank account customers will now also be offered services on the same terms as other personal current accounts that the banks provides, including access to all the standard over-the-counter services at bank branches and at the Post Office, and access to the entire ATM network Economic Secretary Harriett Baldwin said: ‘’I’m delighted that for the first time, truly fee-free basic bank accounts will be available to anyone who doesn’t already have an account, or isn’t able to use their existing account due to financial difficulty.”

21. 21 The banks and building societies that have signed up to offer a basic bank account from 1 January 2016 and their corresponding bank account product are: Barclays – Barclays Basic Current Account Santander – Basic Current Account NatWest – Foundation Account Ulster Bank (Northern Ireland) – Foundation Account The Royal Bank of Scotland (Scotland) – Foundation Account RBS England & Wales – Basic Account HSBC – Basic Bank Account Nationwide – FlexBasic Co-operative Bank – Cashminder Lloyds Banking Group (including Halifax and Bank of Scotland brands) – Basic Account TSB – Cash Account National Australia Bank Group (including Yorkshire Bank and Clydesdale brands) – Readycash Account