Universal Credit

1. Universal Credit

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 assessed in a single claim which removes the need to claim different means-tested benefits from different agencies. .

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 • Claim made online • Single monthly payment to the household • Housing costs paid direct to the tenant • Claimant Commitment • For people in and out of work

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

5. Universal Credit – one year on

6. Claimant 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. Employer

7. UC Claimant Journey – Pictorial Representation Customer Touch Points 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 receive a text message to remind me about my interview at the Jobcentre 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) I notify the UC Service Centre if there is a change in my circumstances I am asked to attend the Jobcentre I make my claim on-line. If I need help, I can telephone the Universal Credit helpline for assistance I get information or advice about how to claim Universal Credit (UC) I receive a notification to advise me that my Universal credit entitlement has changed or ceased I attend the Jobcentre and engage in work related activity I receive a telephone call inviting me to attend an interview in the Jobcentre I send any additional missing evidence to the Mail Opening Unit (MOU) UC Service Centre Jobcentre Business Process UC Service Centre Claims Closure UC Service Centre Jobcentre Online/ UC Helpline 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 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 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 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

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

9. 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.

10. 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.

11. Alternative Payment Arrangements – Consideration Factors

12. Universal Credit and Housing Costs • Registered Social Landlords(RSL’s) • UC brings significant changes to RSLs. Currently they receive over 98% of HB payments direct, under UC the monthly payment will be sent direct to claimants. • RSL’s have been preparing their tenants for these changes and making sure they understand their responsibilities and the support available. • We have introduced data sharing legislation in January 2015 to help manage claimant payments. • If rent arrears occur an Alternative Payment Arrangement can be applied for. Arrears can also be deducted from UC . • We are developing closer working relationship with landlords.

13. Universal Credit and Housing Costs • Private Landlords • 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. • Closer relationship with tenants needed – to support them through this transition. • Private rented sector HA cases are paid 4 weeks in arrears and under UC this will be monthly. • Landlords can request an alternative payment arrangement when a rent arrears 'trigger' of two months of arrears has been reached.  • Payments can then be switched to a managed payment of rent to the landlord.

14. 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.

15. 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.

16. 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 Workhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/301408/how-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 Arrangementshttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181399/personal-budgeting-support-cover-note.pdfhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181400/personal-budgeting-support-guidance.pdf • The Local Support Services Frameworkhttps://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181395/uc-local-service-support-framework.pdf

17. 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/how-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/how-uc-can-help-your-business.pdf