Stockton & District Advice & Information Service Universal Credit A Technical Briefing Stockton & District Advice & Information Service

What is Universal Credit? means-tested benefit dependent upon income and savings designed to replace most working age benefits ( “Legacy Benefits”) designed to make work pay 2

Stockton is a full service area from April 2018 6 means tested benefits Universal Credit replaces 6 ‘means-tested’ benefits with 1 monthly payment If you’re in a ‘full service’ area, everyone who currently applies for any of these will need to apply for Universal Credit instead Stockton is a full service area from April 2018 Income-based Jobseeker's Allowance (JSA) Income-based Employment Support Allowance (ESA) Housing benefit (HB) Income Support (IS) Child Tax Credits (CTC) Working Tax Credits (WTC) Universal Credit Suggested speaker notes: Universal Credit replaces 6 means tested benefits and brings them into one payment. One of the big differences we will see when we get the new full service is more people will be applying for Universal Credit than previously. This is because, once we get full service, almost all people making a new claim for one of these benefits will have to apply for Universal Credit instead. There are some exceptions to this, so please do check Those who are currently claiming one of these 6 benefits are likely to be moved onto Universal Credit from 2019 onwards and don’t need to do anything until the Department for Work and Pensions (DWP) gets in toUniversal Credith. However, If a person's circumstances change before then, for example they get a job, become unemployed or move home, they might have to make a claim for Universal Credit instead. Again, please do check this. Don’t forget that some people can get some other benefits at the same time as Universal Credit, for example Council Tax RedUniversal Credittion or Personal Independence Payments. Useful advice pages: Adviceguide: What is Universal Credit? Adviceguide: Check if you're eligible for Universal Credit

What benefits does Universal Credit NOT replace? Personal Independent Payment (Disability Living Allowance) Attendance Allowance Carers Allowance Council Tax Support Child Benefit Statutory Sick Pay, Statutory Maternity Payment Contribution based JSA & ESA 4

Housing element - for renters / owner occupiers Standard allowance The payment is made up of a basic ‘standard allowance’ and extra payments that might apply depending on someone’s circumstances This is then means tested against any earnings or capital the client has Limited capability for work element - if a Work Capability Assessment decides someone’s physical or mental health limits their ability to work Child element - for people responsible for a child or qualifying young person Disabled child addition - an addition to the child element for any children in receipt of DLA or PIP Childcare element - for people who are in work and pay for registered childcare Carer element - for people caring for a severely disabled person for at least 35 hours a week Housing element - for renters / owner occupiers Suggested speaker notes: Universal Credit is made up of a standard allowance and additional elements people might be entitled to depending on their circumstances. Many of these elements weren’t applicable to a typical claimant in the old version of Universal Credit, so it may be worth familiarising yourself with what these all are. Added together these make a ‘maximum amount’ which is then means tested against earnings or capital. What counts as earnings and capital and how it is treated varies, so please do make sure to check this. Don’t forget that some people are entitled to a work allowance, depending on their circumstances. This is the amount someone can earn while on Universal Credit, before the benefit starts to be withdrawn. This will vary depending on whether they receive help with housing costs as part of their Universal Credit claim. Useful advice pages: AdviserNet: Calculate your maxium amount

How is UC different? Suggested speaker notes: Most other benefits Full service Universal Credit When do you receive payments? Paid fortnightly Paid monthly How do you make your claim? Claims could often be made over the phone or on a paper form Everything is done online as standard How do you manage your claim? Changes to a claim or payment could often be made over the phone or through a letter Who is it paid to? Normally paid to individuals Paid to households - so a couple gets a single payment (although they apply separately) Who receives housing benefit payments? Housing benefit is paid directly to the landlord Housing benefit is included in the payment - claimants need to pay this to the landlord themselves Suggested speaker notes: There are lots of other ways full service Universal Credit is different to other benefits. One of the big changes between the old version of Universal Credit we had and the version we are getting is that more is digital and based online. This means clients will be asked to verify their identity online as part of their claim and will be asked to manage their claim online too. Clients will have an online account where they'll be able to see payments and ask questions about their claim. If a client is with you, you can post questions in their journal with them as an alternative to ringing the helpline.

Universal Credit – Basic Conditions aged 18 or over (some 16/17 year olds can get Universal Credit) not receiving education satisfy residence tests accepted Claimant Commitment meet financial conditions - income not too high - savings over £16k = no UC - if savings between £6k – £16k tariff income applied - tariff income £4.35pcm on every £250 7

Universal Credit – Stockton “Full Service” area in April 2018 No new claims for legacy benefits Must claim UC instead 8

Universal Credit – Stockton People receiving “legacy benefit” will continue to receive it until they are transferred (“migrated”) to Universal Credit. Two types of Migration: Managed Migration Natural Migration 9

Universal Credit – Stockton Migration Managed Migration – when DWP moves a client from legacy benefits to Universal Credit Natural Migration – where client has change in circumstances and has to make new benefit claim A key feature of Managed Migration is clients will get “transitional protection” – should not be worse off due to being moved on to UC. Clients who come under Natural Migration will not get “transitional protection”. 10

Managed Migration due to start 2019 Many people will Naturally Migrate due to change in circumstances 11

Universal Credit – The Claim 12

Universal Credit – After the Claim normal assessment period is one calendar month paid on same date of each month paid monthly in arrears Paid into a bank account on-going assessment and adjustment. Changes in circumstances during assessment period can affect next Universal Credit Payment 13

Universal Credit – The Claim Advance Payments - early payment of part of Universal Credit award - loan to be repaid over 6 - 12 months - repayments at maximum of 40% of standard allowance - can be requested at any time - after first payment of Universal Credit, must be due to change in circumstances 14

Universal Credit – Alternative Payment Arrangements money for rent paid direct to landlord Universal Credit weekly or fortnightly payment to two accounts instead of one 15

Alternative Payment Arrangements (APA) APA can be considered if client: Cannot manage the usual payment arrangement Risk of financial harm to client or family considered on individual basis High likely need – addiction problems - severe debt - mental health condition - rent arrears/threat of eviction - domestic violence - family with multiple and complex needs Discretionary and no right of appeal 16

Claimant Committment Must be accepted to get Universal Credit Must be adhered to for ongoing UC entitlement List of what claimant must do; - work related requirements - what actions must be done and by when - how to report changes in circumstances - information on sanctions Can be changed by DWP Updated regularly

Work related requirements Depend on circumstances May have to; - look for work ( be available and searching for work) - prepare for work - attend work-focussed interviews - do none of the above Work coach to help claimants set and meet work related requirements

Universal Credit – The Issues Stockton & District Advice & Information Service

Universal Credit – The Issues Evidence from:- National CAB research from 18 Full Service areas Thirteen Stockton & District Advice & Information Service

Universal Credit – The Issues Claiming Waiting period Budgeting On-going claim management Debt

Claiming Universal Credit Access to computer Support to use computer Support to make claim Evidence to support claim Need to claim other benefits

Claiming Universal Credit National CAB Research:- 52% found online application ‘difficult’ 30% made 10 + calls to helpline 57% reported difficulty with evidence verification Delays in claim mean delays in payment

Waiting period Time from claim to first payment:- 61% - 6 weeks or less 28% - between 7 to 10 weeks 11% - over 10 weeks

Waiting Period How UC clients are managing financially during the 6 week wait (NACAB Survey)

Budgeting Not used to budgeting monthly 45% UC clients previously in work paid monthly Not used to paying landlord Fluctuating wages + UC/wages misalignment

Misalignment of UC & Wages Budgeting Misalignment of UC & Wages

Budgeting – Alternative payment arrangements

Budgeting – Alternative payment arrangements

On-going claim management Access to on-line journal - 14% people have no home internet access - 45% UC clients had difficulty accessing or using internet If claim is not managed - risk of sanctions - increased risk of debt

Debt Hartlepool/Thirteen Average debt per UC customer - £791 Average debt per non UC customer - £470 Average ‘increase’ in debt since UC claim -£200

Debt National CABx; - UC clients more likely to have debt problems than people on legacy benefit 26% UC clients needed help with debt 19% legacy benefit clients needed help - UC clients more likely to have priority debts 47% UC clients had rent arrears 30% of legacy clients had rent arrears

Universal Credit – The Claim 33

What is happening now Briefings to locality forums at VCSE Briefings to Crisis Support agencies Information sheets – Applying for Universal Credit; UC Jargon Conference – February – Thirteen and Infinity Multi-agency preparatory work