Report proposes compensation for late payment of Universal Credit

Universal Credit claimants should be given an upfront ‘helping hand’ payment and should be able to claim financial compensation for late payments, according to a new report.

The Helping Hand? Improving Universal Credit report from centre right think tank Bright Blue explores the impact of the unique and key design features of Universal Credit (UC) during three critical stages of the claimant experience: accessing, managing on and progressing on UC.

It says most claimants are managing well on UC, but points out problems with, for instance, the online nature of claims and delays in payments.  It says the biggest challenge faced by claimants is the initial waiting period of at least five weeks, which most claimants struggle with. It highlights three related issues: the official length of time people have to wait; the majority use of advance payments to cover this time; and, further delays above and beyond the official time caused by errors, which a third of interviewees experienced.

The report calls for all new UC claimants to be offered a one-off ‘helping hand’ equivalent to a week’s worth of their future UC award payments. It says this ‘helping hand’ should be paid as soon as possible after successfully registering on UC to the claimant’s chosen bank account, should be non-repayable and should only be received once by a claimant over a long time period. It also recommends that claimant commitments should be rewritten to include obligations of individuals and institutions that support UC claimants and says if hese obligations are not met, Independent Case Examiners should determine whether compensation to claimants is paid in their next UC award.

Other recommendations include the introduction of a disregard for the repayment of UC overpayments where DWP is responsible for the error and the extension of the 12-month exemption from the Minimum Income Floor (MIF) for self-employed UC claimants for another 12 months’ exemption while they are on UC with the approval of their work coach.

Meanwhile, a report from the New Economics Foundation thinktank calls for the personal tax allowance to be scrapped and replaced by a £48.08 “weekly national allowance,” amounting to £2,500.16 a year from the state, paid to every worker over the age of 18 earning less than £125,000 a year. The cash would not replace benefits and would not depend on employment. Critics says the personal tax allowance which has risen progressively over the last years favours those on higher incomes.

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