Alarm raised over risk of vulnerable claimants losing benefits

The Public Accounts Committee has expressed alarm about lack of support for people being moved from legacy benefits such as tax credits to Universal Credit.

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A Parliamentary committee has expressed concerns about the lack of support for those being moved from legacy benefits to Universal Credit [UC].

The DWP is in the process of moving 900,000 claimants of legacy benefits, including parents claiming tax credits, to UC. The DWP expects around 4% of claimants of legacy benefits will not switch to Universal Credit. The report says the DWP seems unconcerned about the fact that 21% of tax credits claimants have not transferred to Universal Credit when invited to do so. The report warns that even a small proportion of people not transferring to UC could translate into substantial numbers facing financial hardship.

The Public Accounts Committee’s report on Universal Credit says the Government’s in-house support for claimants moving to Universal Credit has so far been limited, particularly face-to-face provision, and will need to improve as more vulnerable claimants move from its legacy benefits.

Moreover, it notes that the Government is reducing its grant funding for the external Help to Claim service at the same time as more claimants will need advice and support to move from legacy benefits to Universal Credit.

The report adds that there is no real evidence of the economic benefits claimed for the move to Universal Credit.  It states: “We are not convinced by the Department’s claim that Universal Credit is achieving the scale of economic benefits set out in its business case.” The Government predicts that UC will generate £10.4bn of benefits a year once fully rolled-out, with £6.1bn coming from increased employment. However, the report says that analysis of DWP’s evidence base that UC is benefiting the labour market found that the DWP has cherry-picked positive facts and also made other assumptions not supported by empirical evidence.

The Committee wants the Department for Work and Pensions to set out what it will do to monitor the adequacy and effectiveness of the in-house support it provides to claimants moving to Universal Credit, particularly whether it has sufficient capacity to meet the need for face-to-face support.

It adds that the system is too complex. It notes that the DWP has not explained clearly how transitional protection works so benefit claimants, and the organisations that advise them, do not fully understand how amounts are calculated.

Dame Meg Hillier MP, Chair of the Committee, said: “Our Committee has scrutinised Universal Credit since its inception. We must not forget how massive a change it is to how benefits are delivered, impacting millions of people. This means if the transition from legacy benefits to UC fails even an apparently small proportion of people, it will lead to real world misery for thousands. The DWP must make sure that people are not cast into financial hardship due to a bureaucratic change, and that robust support is in place for those vulnerable claimants who need it most.”

Alison Garnham, Chief Executive of the Child Poverty Action Group, said: “Warnings like the PAC’s are coming thick and fast as the DWP steamrolls on with managed migration, leaving vulnerable claimants in its wake – without the benefits they are entitled to and need.  The department’s lack of concern that so many tax credit claimants haven’t moved to UC and have had their benefits cut off as a result is chilling.  The DWP must put its spreadsheet targets aside, slow the roll-out of UC right down and come up with a safe process that won’t leave large numbers of claimants falling over a cliff edge into debt.  The time to do this is now – not later, when even more claimants will be at risk.”

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