MPs will debate Universal Credit (UC) in the House of Commons Chamber on Wednesday this week. What do we know about the roll-out of this policy so far?
Roll-out was around 11% complete as of Dec 2017
According to the latest household data, around 0.7 million households claimed UC as of December 2017, compared to around 5.5 million that claimed at least one ‘legacy’ benefit (the collective term used to refer to the Department for Work and Pensions (DWP) benefits and HMRC tax credits that UC is replacing). This suggests UC roll-out is around 11% of the way through in terms of claimants.
This data also suggests 75% of households currently on UC are single adult households with no children. 48% of people on UC as of May 2018 were searching for work. It is worth keeping in mind that this mix is likely to change.
Roughly half of claimants can access UC online and understand it
The DWP’s survey of full service claimants, published in June 2018, was based on interviews with around 1,800 UC claimants. The survey was completed in March to September 2017, meaning it did not capture any effect(s) that changes to UC announced since then (in particular, those announced at Autumn Budget 2017), might have had. All the same, it is the most recent longitudinal survey published by DWP and offers an insight into claimant experiences at the time.
98% of claimants made their claim online, according to the DWP’s survey. 54% registered their claim with no assistance. Around half of claimants understood features such as the ‘taper rate’ and 60% felt supported to find work.
However, many face difficulties accessing UC
25% of claimants were not able to submit their claim online at all and 30% of claimants who registered online found doing so difficult. The NAO points out that claimants with health conditions were significantly more likely to report difficulties.
Claimants, the DWP and NAO all raise verification – both of a claimant’s identity and the additional support, such as housing costs, for which they are eligible – as a major issue.
60% of new claimants in January 2018 accessed a payment advance. This is an increase from 40% in previous months and is likely due to new guidance issued to staff in January 2018.
Around half of claimants experienced financial difficulties
44% of claimants were falling behind on bills or credit commitments or experiencing “real financial difficulties three months into their claim. 40% were so after eight to nine months.”
50% of claimants surveyed eight to nine months into their claim had to obtain additional funds during the last three months. A third received money from family or friends, 13% received support from DWP and 11% gained or extended a bank overdraft. NAO analysis of Trussell Trust data suggests food bank usage increased by 30% in the six months following full service launch in an area, compared to 12% in full service areas.
DWP found just over one third of claimants surveyed were in arrears, two thirds of whom said they fell into debt after making a claim to UC. Seven in 10 who were in arrears three months into their claim were still so six months later and 44% said their arrears had increased.
The NAO noted that local authorities, housing association and landlords, associate UC roll-out with an increase in rent arrears and that arrears can “rise starkly” in some cases in the month between a claimant starting a new claim to UC and receiving their first payment.
The number and range of claimants will change once the full service is in place
The proportion of households with children on UC rises once the full service is launched in an area. We can expect the number, range and complexity of cases on UC to increase as full service roll-out continues.
UC will bring at least an extra 450,000 people under a Jobseekers Allowance-style sanctions and conditionality regime.
The majority of households with rent, children or incapacity are yet to move to UC
While 52% of jobseekers are now on UC, around 90% of households receiving support for housing, 95% of households with children and 98% of households receiving incapacity benefit are yet to move on to the new benefit. Our Universal Credit roll-out: 2018-19 research briefing explains in full how we have arrived at these estimates.
This might be because the rate at which claimant groups migrate varies considerably
House of Commons Library analysis of latest caseload data shows that the speed at which existing claimant groups ‘naturally’ migrate onto UC varies between groups.
DWP plans to launch the full service in around 220 more jobcentres by December
The full service is now present in 65% of Jobcentres in Great Britain. However, roll-out is more complete in some regions than others. 80% of Jobcentres already run the full service in the South West, compared to 42% in Wales.
Incapacity benefit claimants will make up the vast majority of managed migration cases
The Office for Budget Responsibility (OBR) estimates that around 1.9 million households might be subject to ‘managed migration’ from 2019-23. This is when DWP will transfer any remaining legacy benefit and tax credit claimants (that is, those who have not transferred already due to a change in their own circumstances) on to UC. The OBR also highlights that tax credits and Employment Support Allowance cases will likely make up the vast majority (90%) of managed migration cases.
About our sources
This post is based primarily on analysis published in the House of Commons Library’s Universal Credit roll-out: 2018-19 paper, findings from the Department of Work and Pensions’s (DWP) survey of full service claimant experiences and the National Audit Office’s (NAO) rolling out UC report.
To track the progress of UC roll-out by constituency, our Universal Credit roll-out data tool provides the latest estimates from the House of Commons Library.
Richard Keen is a statistician at the House of Commons Library, specialising in welfare and pensions.
Photo: Andrew Writer (CC BY 2.0).