1. Universal Credit 1 st February 2016 1

2. 2 Simplifying the benefits system The legacy welfare system is complex in its structure, administration and how the different qualifying conditions interact with each other. To simplify the legacy benefit system DWP has: –Created a new legislative framework. –Implemented a single system of means tested support. Universal Credit provides a new single system of means-tested support for working-age households who are in or out of work. All elements are assess in a single claim which removes the need to claim different means-tested benefits from different agencies..

3. 3 Simplifying the benefits system Universal Credit will replace; Jobseekers Allowance (IB) Employment and Support Allowance (IB) Income Support Housing Benefit Working Tax Credit Child Tax Credit

4. 4 What’s different about Universal Credit? IT ENCOURAGES WORK IT’S LIKE WORK IT’S ABOUT WORK PAID MONTHLY PAID DIRECTLY CLAIMANT COMMITMENT – LIKE A CONTRACT IN AND OUT OF WORK CLAIMANT COMMITMENT REQUIREMENTS FULL TIME WORK SEARCH EARNINGS, NOT HOURS A SIMPLE TAPER SO BETTER OFF IN WORK EASY TRANSITION UC TO WORK (AND BACK)

5. 5 Universal Credit - making work pay Universal Credit helps to ensure people are better off in work than on benefits by: 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.

6. 6 Universal Credit – one year on

7. 7 Real Time (Earnings) Information RTI is working for employers - the majority of employers are submitting PAYE data in real time. RTI data working for claimants – RTI data is used in approximately 30% of UC payment calculations. Claimant Employer

8. 8 UC Claimant Journey – Pictorial Representation Customer Touch Points Online/ UC Helpline UC Service Centre If the claimant has a change of circumstance it is reported to the Service Centre. The claimant is notified regarding any change to the award of Universal Credit The MOU scan the claim on to the Data Repository System (DRS). Any evidence or correspondence sent in separately by the Claimant creates a CAMLite task for the agent in the SC. On receipt of the task, the agent updates the UC Portal. Once all evidence has been verified, this triggers the processing of the UC claim The Jobcentre print the UC claim and obtain a signature from the claimant. Any additional information is gathered and the Claimant Commitment (CC) is completed. The UC Portal is updated and the claim documents and any supporting evidence are sent to the Mail Opening Unit (MOU) On receipt of the online UC claim, the Service Centre (SC) contact the Claimant by telephone to arrange an interview at the Jobcentre. An SMS text message is issued to remind the claimant about their appointment Claims to Universal Credit (UC) are made on- line. If a claimant requires assistance, the Universal Credit Helpline is available. In exceptional circumstances, claims can be made by telephone or face to face Business Process I receive a telephone call inviting me to attend an interview in the Jobcentre I notify the UC Service Centre if there is a change in my circumstances I receive a text message to remind me about my interview at the Jobcentre I receive my UC decision letter which includes my payment schedule if appropriate. I am also advised about my on- going responsibilities as agreed in my CC I am asked to attend the Jobcentre I receive a notification to advise me that my Universal credit entitlement has changed or ceased I get information or advice about how to claim Universal Credit (UC) I make my claim on-line. If I need help, I can telephone the Universal Credit helpline for assistance I attend my interview in the Jobcentre and take any evidence that has been requested. I sign my printed claim and complete the Claimant Commitment (CC) Jobcentre UC Service Centre Claims Closure The Claimant is invited to attend the Jobcentre to undertake specific work related activity as agreed in the CC. There is on- going interaction at the JC I send any additional missing evidence to the Mail Opening Unit (MOU) UC Service Centre Jobcentre I attend the Jobcentre and engage in work related activity

9. 9 01/01 Date of Claim +7 days 1 st UC Payment Calc/notification to claimant: 08/02 1 st UC Payment Received by Claimant: 14/02 Regular UC Assessment Period 2nd UC Payment Calculation: 08/03 2 nd UC Payment Received by Claimant: 14/03 An example claim 07/02 07/03 08/01 Start Assessment 7 Waiting Days

10. 10 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

11. 11 Payment Advances Universal credit payments will be issued monthly through the BACS system. 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. For UC Advance (New Claim) the claimant will be advised that if they can't manage they can claim an advance. They would need to repay the advance over the next 6 months. For a UC Advance (Transitional) the claimant will have to ask for the advance within one month of moving across to UC. 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.

12. 12 Alternative Payment Arrangements Alternative Payment Arrangements. 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.

13. 13 Alternative Payment Arrangements – Consideration Factors 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

14. 14 Universal Credit and Housing Costs 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 will introduce data sharing legislation in January 2015 to help manage claimant payments. An increase of recovery rates for rent arrears from November 2014. We would like to develop a closer working relationship with landlords.

15. 15 Universal Credit and Housing Costs Private Landlords As part of the live service roll-out we have picked up communications through the Local Authority. UC changes do not affect Private Landlords as significantly as RSLs as currently they only receive payments direct to them when the claimant is vulnerable. Around 30% of current Housing Allowance payments in the private sector are paid to the landlord. Similar processes and trigger points are in place for UC. Private rented sector HA cases are paid 4 weeks in arrears and under UC this will be monthly.

16. 16 Supporting those who need it most To support those who need it most, Universal Credit introduces Universal Support – delivered locally. Universal Support is a delivery partnership. DWP, LAs and service providers working together to agree how best to deliver services at a local level. The aim is a joined-up, holistic service, practically for claimants that need most support, helping the claimant move from welfare dependency. These delivery partnerships have been based on evidence and experience as part of Test and Learn. 11 trials across Great Britain have started in September 2014. The trails test: Different arrangements for triaging household needs. Sharing of date, skills and estates to create the right integrated local foundation to support more households into work.

17. 17 Personal Budgeting Support Online budgeting tools for claimants who can help themselves - such as those offered by Money Advice Service and Citizens Advice. Advice services offered by external organisations for those who need more support with, for example, getting a bank account or doing a monthly budget plan. Advice will be delivered through online, telephone and face-to-face channels by expert providers at a national and local level. A personal planner is available on gov.uk to help claimants understand and prepare for financial changes arising from the introduction of Universal Credit. Up to 1.3 million potential UC claimants currently do not use a transactional bank account to manage their benefit payments. We are looking at ways to make accounts with budgeting functionality, such as ‘jam jar’ accounts, more widely available. We are consulting with financial providers across the private, social and third sectors and considering the best ways to make these types of products more available.

18. 18 Personal Budgeting Support Alternative Payment Arrangements. 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.

19. 19 Useful links for stakeholders An introduction to Universal Credit video http://youtu.be/E7GUu7Xa7Nw Universal Credit pages on GOV.UK https://www.gov.uk/universal-credit A toolkit for Partners https://www.gov.uk/universal-credit-toolkit-for-partner-organisations The Claimant Commitment https://www.gov.uk/universal-credit-toolkit-for-partner-organisations#the-claimant- commitment A Personal Planner to help claimants prepare for Universal Credit http://ucpp.dwp.gov.uk/universal-credit-preparation/ A pictorial representation explaining Better off in Work https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301408/ho w-uc-tops-up-earnings-to-make-work-pay.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301408/ho w-uc-tops-up-earnings-to-make-work-pay.pdf Budgeting help and support https://www.gov.uk/government/publications/budgeting-your-universal-credit-quick-guide Operating Guidance for Personal Budgeting Support & Alternative Payment Arrangements https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181399/pe rsonal-budgeting-support-cover-note.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181400/pe rsonal-budgeting-support-guidance.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181399/pe rsonal-budgeting-support-cover-note.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181400/pe rsonal-budgeting-support-guidance.pdf The Local Support Services Framework https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181395/uc -local-service-support-framework.pdf https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181395/uc -local-service-support-framework.pdf

20. 20 Useful links for stakeholders The Money Advice Service https://www.moneyadviceservice.org.uk/en A Money Advice Service Universal Credit video https://www.moneyadviceservice.org.uk/en/videos/get-ready-universal-credit Making work pay comparison graph explaining how Universal Credit compares to the current system when claimants increase their hours https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301411/ho w-uc-helps-to-make-work-pay.pdf A quick guide for employers about Universal Credit and RTI https://www.gov.uk/government/publications/universal-credit-works-for-employers-and- claimants-quick-guide HMRC and RTI http://www.hmrc.gov.uk/payerti/getting-started/paye-basics/rti.htm Eight Ways Universal Credit can help your business https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/307091/ho w-uc-can-help-your-business.pdf