Universal Credit claimants are to be given more time to switch to the new benefit after warnings from campaigners and MPs that payment delays were causing hardship for vulnerable people.
Work and pensions secretary Esther McVey has told Parliament that Whitehall had recognised the ‘genuine concerns’ raised around the moving of welfare recipients over to Universal Credit, which rolls six benefit payments into one.
The Government plans to ‘migrate’ almost seven million people to UC by the end of 2023.
However, the flagship reform has been widely criticised. Long delays in payments during the policy’s roll out have driven many recipients to turn to food banks and some have been forced to run up rent arrears.
In last week’s Budget, the chancellor announced there would be an extra £1bn available to help smooth the transition to the new system.
In a statement to Parliament yesterday, Ms McVey said the Department for Work and Pensions recognised ‘the genuine concerns raised about the support we were offering people, especially to the most vulnerable, when they move to Universal Credit.’
After July 2020, those claiming income support, jobseeker's allowance, and employment support allowance will be paid for two additional weeks to support them during the period before their first UC payment.
The minimum statutory notice period for people moving from their legacy payments to UC will be extended from a minimum of one month to a minimum of three months.
Ms McVey also said there would be protection at the point of migration for the 500,000 people claiming severe disability premium.
Loans paid to help people bridge the gap between old welfare payments to UC will only be taken back at 30% - rather than 40% - of benefits per month, starting in October 2019.
From July 2020, self-employed claimants will be given a one year ‘grace period’ exempting them from the ‘minimum income floor’ which limits them to receiving no more benefits than they would get if they were on minimum wage even if they are making a loss.
The Department for Work and Pensions was ‘a department that listens,’ Ms McVey insisted. ‘And a department that will continue to listen, adapt, change and deliver.’
The changes follow the recommendations of the Social Security Advisory Committee (SSAC), an independent advisory body of the Department for Work and Pensions.
Professor Sir Ian Diamond, Committee chair, said he was ‘delighted’ that the DWP and the Chancellor had ‘listened to the advice of this committee – and to the views of the 455 stakeholders who submitted evidence to our consultation – and taken steps to reduce risk for millions of people.’
However, he stressed that ‘a lot of detail still has to be worked out.’
‘We are disappointed that the DWP continue to expect that everyone must make a claim to Universal Credit in order to be migrated to it,’ he said.
‘And we remain concerned about the degree to which the department will in practice demonstrate the openness and flexibility to which they have committed.’