Will Universal Credit really simplify the benefits system by GlynnePowell


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Will Universal Credit really simplify the benefits system?

"Universal Credit will simplify the benefits system by bringing
together a range of working-age benefits into a single
streamlined payment." - say DWP

Take the case of John. He's 59 and he's in receipt of Employment & Support
Allowance (Support Group] because he has very severe limitations and
cannot work, he also receives some Disability Living Allowance. Having paid
all his National Insurance contributions he is entitled to the contribution
based variant of his Employment & Support Allowance. He lives in his own
rented property.

Under the current system John has to claim four separate benefits:

                    Employment & Support Allowance (contribution based)

                    Housing Benefit (for his rent)

                    Disability Living Allowance for his severe mobility & personal care needs

                    Council Tax Benefit

So will John's life be made any easier once he's been reassessed
under the welfare reforms?

Will Universal Credit simplify things for John?

Will John's four benefits all be merged into one?

Let's see how John's claim will be affected by welfare reform...
     John will carry on claiming his Employment & Support Allowance - because it's contribution
      based it won't be included with his Universal Credit claim.

     John's Housing Benefit will be replaced by Universal Credit, but it will no longer be paid by his
      local Council.

     John's Disability Living Allowance may well end up being replaced by Personal Independence
      Payment but it won't be included with his Universal Credit claim.

     John's Council Tax Benefit will be replaced by a localised benefit for Council Tax but it won't be
      included with his Universal Credit claim.

John will still be claiming four separate benefits despite his
'Universal' Credit - hardly simplification is it?

The government is spending billions of pounds in a blaze of publicity aimed
at convincing us all that the new Universal Credit will integrate working age
benefits into one 'single streamlined payment'. It's a claim which falls flat on
its face when you start to look at the detail.

It's only Income Based Employment & Support Allowance which will be
included in a Universal Credit claim, the contributory based variant John
claims stays outside of the system because it is not a means tested benefit.
It's only John's Housing Benefit which becomes part of his Universal Credit
claim. Under the current system John's Housing & Council Tax Benefit are
both paid by the Local Authority but from next April it all changes as
Council's commence the administration of their own 'localised' version of
Council Tax Benefit. John's rent payments will be paid directly to him rather
than get paid directly to his landlord under the new scheme and what's
more they will be paid from a completely different source to his Council Tax

John's Disability Living Allowance will eventually be transferred (subject to
assessment) to the new Personal Independence Payment (PIP) which has
never been integrated into the plans for merging of payments in with
Universal Credit.

So John's Employment & Support Allowance stays exactly as it is, his
Housing Benefit becomes his Universal Credit, his Council Tax merely
becomes localised and his new Personal Independence Payments stays
outside of the system.
Now let's look at another typical claimant situation
involving a family..

Take the case of Ben and Barbara and their 3 children: aged 9,11 and 14.
Barbara is the carer for their 11 year old son who is disabled. Bob goes to
work and the family receive Working & Child Tax Credits, they don’t qualify
for any help with their mortgage and nor do they get any help with Council

Under the current system Ben and Barbara have to claim four
separate benefits:

                They receive Tax Credits: Working & Child Tax Credits from the HMRC

                Carer’s Allowance for Barbara who looks after the family's son.

                Disability Living Allowance for their son

                Child Benefit for all 3 children

So will Ben and Barbara's life be made any easier once they've been
reassessed under the welfare reforms?

Will Universal Credit simplify things for this family?

Will Ben and Barbara's four main benefits all be merged into one?

Here's how Ben and Barbara's claim will be affected by welfare

       Universal Credit replaces their Tax Credit claim (Working Tax Credit & Child Tax Credit)

       Child Benefit is not included in the Universal Credit

       Carer’s Allowance is not included in the Universal Credit

       Disability Living Allowance is not included in the Universal Credit

Ben and Barbara will still have to claim four separate benefits
despite their 'Universal' Credit - it's not really simplification is it?
So again we see another example of how this unification doesn't really
merge payments at all. Some may of course argue that their Working Tax
Credits and Child Tax Credits are two separate benefits but existing
claimants will be aware that both are paid in the existing system by the
HMRC; essentially the claim process and award notices for both the working
and child related credits are already unified. In this case the two different
credits are reclassified as 'Universal Credit'. The other benefits which Ben
and Barbara claim all fall outside of the new Universal Credit because they
are non-means tested. How can we claim this to be simplification?

It's another example which shows how Universal Credit isn't the
'single streamlined payment' claimed by the DWP.

So perhaps it will be easier to claim Universal Credits in
the event of Ben losing his job.....

In the previous post we looked at how Ben and Barbara would be affected
by Universal Credit if they were in work. Now let's look at the same family
and how they will benefit (or not as the case may be) in the unfortunate
event that Bob lost his job.

Under the Universal Credit system with Ben working, the family
would still be claiming four separate benefits:

       Universal Credit replaces their Tax Credit claim (Working Tax Credit & Child Tax Credit)

       Child Benefit is not included in their Universal Credit

       Carer’s Allowance is not included in their Universal Credit

       Disability Living Allowance is not included in their Universal Credit

So will Ben and Barbara's life be made any easier with Universal
Credit as they move from being in work to unemployed?
Will Universal Credit make it easier to transition from employment
to unemployment?

Will Ben and Barbara's four main benefits become all merged into

Here's how Ben and Barbara's claim is affected as Ben becomes

     Ben will be entitled to claim contributory based Jobseeker's Allowance - which is not part of
      Universal Credit (but see below)

     The Disability Living Allowance claimed for their son is not part of Universal Credit

     The Carer's Allowance claimed for looking after their son is not part of Universal Credit. (but see

     The Child Benefit is not part of Universal Credit.

     Because Ben and Barbara are now on a low income - they can claim some Council Tax benefit,
      but it will not be part of their Universal Credit.

     Their existing Universal Credit claim is altered to take account of how Ben is no longer working
      but the Children still need to be claimed for. (but see below)

Potentially Ben and Barbara may be seen as still having to claim 5
separate benefits!

This scenario flags up a number of problems, take it from me these are the
kind of problems which you always get when merging contributory based
benefits with those which are income based. Anyone in this situation will
also be affected by the Universal Credit regulations, they are in draft
form but are now at an advanced stage and can therefore be relied upon to
get an idea where the problems may be. The potential problems in Ben and
Barbara's claim will revolve around the following:

     Their Carer's Allowance

     Their mortgage costs

     The correct handling of their claim

     Ben's contributory based Jobseeker's Allowance.
The reason these are all problematic is because because Ben and Barbara's
income has fallen so low that they now fall subject to 'means testing' of
their non - means tested benefits. Bob's Contribution based Jobseeker's
Allowance and the Carer's Allowance are both treated as income in a
Universal Credit claim. The problem is how many claim handler's or advisers
will recognise this or for that matter how can we be sure it will be picked up
by the IT system when a claimant does their claim on-line. Remember
claimants will only put in what they consider to be relevant.

This is always a classic point of failure in the benefits system and Universal
Credit has merely moved it in to the arena for error. Having been told
Carer's Allowance and Contributory based Jobseeker's Allowance
are not part of Universal Credit, how many claimants are going to think " I
don't have to put that in then". It's no good saying there will be
comprehensive instruction or advice on tap - the reality is people don't
understand or always read the instructions and advice is something the
government has made it clear they do not want to fund. The scope for error
is immense, in fact it's just waiting to happen.

In practice Universal Credit is composed of elements which offset the
income which you have to declare. So for the Carer's Allowance there is a
'carer's element' and for Ben and Barbara's mortgage interest costs there is
a 'mortgage element'. It's more or less exactly the same as it is in existing
income based claims. The Universal Credit will make an allowance for both
Ben and Barbara by regarding them as a couple. But remember Bob's
Jobseeker's Allowance isn't actually part of the Universal Credit claim but it
is very much taken in to account as their income for Universal Credit


Yes I expect you are, it's no different to the confusion which exists already –
it’s just been extended to a newly named benefit. The confusion doesn't end
here because the mortgage interest costs (only the interest is paid) fall to
be included as part of Ben and Barbara's Universal Credit but only after a
'qualifying period. It's the point at which all of these elements & allowances
apply which marks the point at which the contribution based benefits fall to
be assessed as income.
In an ideal world Ben and Barbara's Universal Credit should include their
Carer's Allowance, housing costs and Bob's Contribution based Jobseeker's
Allowance but the problem arises in working out when they fall to be
assessed and in recognising the alignment of all the different elements and
the dates from when they 'kick in'.

Many of us will remember the chaos caused with the implementation of the
tax credits system, it resulted in an epidemic of overpayments. The scope
for overpayments is far greater with Universal Credit because it's being
carried out on such a huge scale. What makes it all the more alarming is
that if you make a mistake you risk a new £50 fine, the fine could be the
least of your worries because there is also a pronounced determination to
prosecute those who are deemed to be 'cheating' the system. We have all
seen examples of a hostile media and a renewed DWP stance to get tough in
a desire to name and shame anyone who falls foul.

Overpayments under the new system will not be subject to the same rights
of dispute which currently exist so many claimants simply won't be able to
properly contest an unfair decision. When government is asked about the
problems all of this creates they stick to script and tell us all how 'work
pays'. The emphasis on work is backed up by an assurance that simplifying
the benefits system makes it more possible to transition from welfare to
work; the new highway for making the transition is Universal Credit which
we are all told is 'on track'.

Let's just wait and see whether the government's new super - highway from
welfare to work is all they say it will be. They can make all the claims they
like but the one which promotes Universal Credit as a 'single streamlined
payment' is to say the least a gross distortion of the facts.

To those of you who don't understand a word of this: welcome to Universal
Credit, you'll need to put all your faith in the DWP and the Ministers who
tells us it's on track. I can see the newspaper headlines which will highlight
all this chaos, it won't be too long before the printing presses start rolling!

And they say there's no need for benefit specialists, honestly what planet
are they on?

It's yet another example which shows how the DWP's claim that
Universal Credit is a 'single streamlined payment' is nothing short of
a lie.
We've been here before...

No one is knocking anyone's attempt to reform a system for the better, but
this is one almighty untried and untested implementation such as we've
never seen before. Iain Duncan Smith only recently compared the
introduction of Universal Credit as not dissimilar to introducing Employment
& Support Allowance. Is he unaware over how much greater a project
Universal Credit really is? Government keeps referring to a figure of 8
million households being brought in to this apparently 'streamlined' system;
the figure he should really be concerned with is the number of people rather
than the number of household - it is after all people who will be affected
rather than houses. The implementation of Working & Child Tax Credits in
2003 was chaotic for many and went on to result in misery being inflicted
upon huge numbers of claimants who ended up being overpaid.

Have we learned nothing from our past mistakes?

It doesn't seem we have. Perhaps some of us have short memories and
can't remember the chaos, you can go back in time and read about the
HMRC chaos here.

You can also read a recent Parliamentary 'progress' report which tells
you all you really don't want to know.


Government thinks they have all the answers - can we really be so sure?

In many respects Universal Credit is a con, it's promoted as the answer to
simplification of what we all accept to be a complicated benefits system but
it does little to thread it all together. There are still a vast array of other
claimants which sit outside of the system but can't be viewed remotely from
Universal Credit because many of these 'external' claims will need to taken
in to account when assessing Universal Credit. It's a step in the right
direction but nowhere near enough to earn the badge of simplification.

Universal Credit claims to merge six benefits (income based Employment &
Support Allowance/ income based Jobseeker's Allowance/Income
Support/Housing Benefit/Working Tax Credits/Child Tax Credits) but four of
these 'benefits' are already unified. Housing & Council Tax Benefit has been
merged for years in its administration by local authorities. Likewise Working
& Child Tax Credits are already unified in assessment and payment
structures by the HMRC, - it's re-unifying something which has already been
unified. They clearly haven't been able to get their heads around merging
contributory and income benefits, you have to wonder why. Given that it is
such a stumbling block to true unification why is it not being recognised as a
potential barrier to the whole system working?

It is this problem over assessment and means testing which led to the
extraordinary way they 'reformed' Child Benefit, it was reformed on the
basis of identifying higher rate tax band payers and led to an absurd
solution being found which cuts off Child Benefit where one earner in a
household earns over the limit and yet allows a couple who both earn just
below the threshold to still receive it. They've not sorted out the real
problems with assessing incomes and on that basis Universal Credit will just
embrace those which are constantly flagged up in the current system.

We will go on and look at the problems caused by Universal Credit with
some examples of how claims will be problematic in terms of the following:

     Overpayments

     Official error and fraud

     The self employed
     Aligning claims with HMRC 'real time information'

     Trouble - shooting with no funding for trouble shooters

     Phased integration of the different benefits in to UC

     Transitionally protected claims


The scope for overpayments and the problems caused by them is immense.
Take the case of our examples Ben and Barbara. What if under the reforms
the Disability Living Allowance paid for their son is stopped as it is decided
they don't qualify for its replacement Personal Independence Payment?

It would mean they are no longer entitled to the Carer's Allowance.

Now assume that both the Carer's Allowance and Disability Living Allowance
are stopped: a problem may arise over their Universal Credit. The problem
is this:

Ben and Barbara will think, despite disagreeing with the decision to stop the
Disability Living Allowance, everything has been correctly changed on their
claim. Right?

Not by any means. If the Universal Credit system does not pick up on the
fact the Carer's Allowance and Disability Living Allowance has stopped, Ben
and Barbara could end up being wrongly incorrectly paid a caring related
addition which is also linked to the son's disability. It happens in existing
claims and there is no reason why the same mistakes will not carry on in a
Universal Credit claim.

The other problem with overpayments is if Ben and Barbara have an
existing and unresolved overpayment on their tax credits. How can anyone
be assured it will be correctly resolved and reconciled by the HMRC Tax
Credit unit before their claim moves over to Universal Credit. It could mean
an unresolved dispute or error just moves from one to the other with no
means of sorting it out because it gets lost in the system and no one takes
responsibility for it.
These are not just isolated examples, there will be plenty more potential
overpayment situations which will arise.

Official error and fraud

As in our examples we have highlighted how mistakes can happen under a
system which will not be infallible. The problem is government and the DWP
are essentially telling us it is infallible. If this is the message they are giving
out then they will say the same thing when a mistake is made. if Ben and
Barbara incurred, in total innocence, an overpayment the DWP will simply
take the line " It's an error on your part because you didn't check the details
on your Universal Credit claim which makes it quite clear you should let us
know if you are receiving an element you are not entitled to"

Under new legislation in this case Ben and Barbara will NOT be able to
appeal against the overpayment, it will be subject to a discretionary code of
practice. The code will probably be similar to the one used in Tax Credits;
many claimants find it unfair because they cannot take their dispute to an
independent Tribunal.

There WILL however still be overpayment decisions which can be appealed
but the overall shift is towards reduced rights of appeal.

The risk in this is one which can be related to an increased risk that the
DWP will impose a new wave of civil £50 'fines' for claimants who make
mistakes. They will be like parking fines - very difficult to dispute.

The bigger risk however is one which can be related to prosecution. Benefit
law is very rigid and government has made it quite clear that they want to
use private agencies who will data trawl public records. Regrettably it often
results in action which is too focussed on blaming the claimant.

Ben and Barbara could end up with a substantial overpayment, a possible
fine or worse still a criminal record arising out of a humiliating wrongful
conviction in court for benefit fraud.

The papers and their readers will love another expose of yet another cheat;
the reality is that these prosecutions drive people to the edge and can be
devastating for claimants who are wrongly accused.
The self employed

The self - employed are bound to present as a problem in Universal Credit.
The biggest problems will revolve around assessed income periods. Typically
in the existing Housing & Council Tax Benefit system this is done over
periods of much longer than the monthly assessed income period related to
Universal Credit. The self employed may well find themselves having to
provide two sets of figures: one to the local Council for any Council Tax
Benefit which is payable and a second set to the DWP for their Universal
Credit. Will there be alignment between the two with no duplication? - I
rather suspect this will not be the case.

Another problem is over establishing the number of hours worked to meet
various thresholds. These have been set at different rates, typically 16, 24
and 30 hours but Government has changed these thresholds to cut off tax
credit entitlement. The problem the self - employed have is in establishing
their average hours of work carried out 'for or in expectation of payment'.
Claimants simply don't know the hours at the outset of an assessed income
period and will typically take a number of months to establish a pattern
upon which they can reliably be worked out. A lot of the work is initially
involved in setting up a business and disputes arise over whether this can
be counted in the 'expectation' of remuneration. The problem will increase
as more and more claimants are pushed down the self - employment route
by Work providers who do not always have a great track record in
supporting claimants through what is often their first attempt at self

It can go spectacularly wrong for claimants who are encouraged to become
self employed but often have totally unworkable business plans. Under
Universal Credit they could find themselves cut off after three months if the
DWP incorrectly assumes them to be capable of bringing in an income which
may be much greater than the amount the claimant is really bringing in.
Overly optimistic projections by those encouraging the self - employed
(often to secure a 'sustainment fee') can and often do lead to situations
where the claimant is deemed to be in receipt of a much greater income
than they really are.

As I understand it self - employed claimants are not being included in the
HMRC's 'Real Time Information' system which places a greater burden upon
them to continually update the DWP on earnings which they may not be
able to accurately report of predict within the assessment periods.
This could be very discouraging for self - employed claimants and could
potentially cause many to give up through despair.

An emphasis on fraud detection is likely to lead to increased numbers of the
self - employed being subject to investigations over the earnings they are

Aligning claims with HMRC 'real time information'

Government wants for instance with RTI to integrate a 'two - way check'. It
will data link the figures reported by an employer in relation to an
employee's wages with records of the matching payment paid in to their
bank account via BACS. This could be seen as intrusive to many and
potentially problematic if the BACS payment does not match the reported
wage figure; this could happen in cases where the employee is say paid
their expenses with their wages. Thus their BACS payment will be different;
who's to say this won't trigger an 'inconsistency' which could result in a
delayed payment of the Universal Credit paid to the employee? Similarly
misalignments could arise in cases where deductions are being made from
the employees wages which could produce a variance between the amount
of wages used in the assessment and the BACS payment subject to this
'cross - check' in an attempt to verify accuracy of the information.

I rather suspect the real motive behind RTI is one associated with
government's obsession with IT and 'data trawling'. It's like a modern day
equivalent of the 'child catcher' from Chitty Chitty Bang Bang. Except of
course it won't be a pointy nosed fiend out to catch errant children - it will
be one almighty mother of a computer out to catch all those benefit naughty
claimants who reside with co-habitants. Yes watch out as they data spin all
their records of benefit claimants with employees who have up until now not
been brought to the DWP's 'attention'. I can here the Experian fuelled nasty
computer growling: "Come on all you nasty little benefit cheats, where are
you we're out to get you". Except it won't be lollipops getting handed out as
you find yourself banged to rights by RTI - yet another one for the
IDS/Grayling slammer. Fraud detection is little talked out about because no
- one is really brave enough to say "actually I think it's got all the potential
to catch out all the wrong people".

Another issue raised by RTI is that of liability. What if the employer for
whatever reason sends in all the wrong information? The claimant will
believe everything has been correctly reported by his employer but what if it
There's plenty of scope for overpayments caused by employers rather than
their employee's but who's going to accept liability? With all the problems
caused by reducing rights in the workplace and a limited labour market is an
employee really going to turn around and say to his or her boss "actually I
think you're liable to pay it all back"?

What happens if RTI goes down or the firm stops paying its workforce? Will
the claimant's payments stop until the DWP sorts out what the problem is?

RTI is not necessarily the answer and it certainly doesn't guarantee what
we've all been promised: in case you've forgotten I'm referring to the word
'simplification'. We'll just have to wait and see whether RTI is all it's cracked
up to be.

Trouble - shooting with no funding for trouble shooters

I find it simply incomprehensible that government spends billions of pounds
in a complete pretence that it's got all the answers to simplifying a
complicated and 'broken' benefits system. Everything with this Government
is broken, broken schools, broken hospitals, broken families, broken bendy
buses, broken trains, broken planes, broken communities, there seems to
be nothing which David Cameron hasn't called 'broken'; he's even labelled
Britain itself as 'Broken'. With so much being apparently broken I'm just a
little bit perplexed as to how it is that we don't need an army of fixers. I'm
also a little bit confused as to quickly broken Britain becomes Great again
when we host something like the Olympics. I wonder how quickly we'll go
back to calling all the paralympians we recently marvelled; - a bunch of

To get back to point. Universal Credit has all the potential to be complete
and utter chaos, there's no point in pretending otherwise. Yes it can be
made to work in the longer time and in that respect I find it frustrating that
government appears to want to dispense with us. By us I mean an army of
dedicated welfare benefit specialists who could actually help iron out some
of the problems. It's no good saying there will be teams of people within the
DWP and HMRC, what department will ever want to admit to its own error?
Is there any sign of the DWP or ATOS saying 'sorry we're making far too
many mistakes and we promise we're going to put them right'?

It annoys the hell out of me to hear our work being relegated to what part
time voluntary generalist advisers do on a free of charge goodwill basis. I'm
not decrying their role in all of this but let's get real; volunteering your time
for on average of six hours a week is no substitute for the skill and
experience of specialists who've know the welfare system inside out because
they deal with it day in and day out. On a personal level I did my time as a
volunteer many years ago, I did so full time, unpaid and for six solid months
to see if I wanted to take this up as a career on a full time basis. It's the
only way you'll get a taste of what this is really all about on a professional
level. Since then I've worked on thousands of cases in a full time paid
capacity and I hate to say it but I do happen to know what I'm talking
about, I hope that doesn't sound over-bearing. However I make no
apologies for justifying my work as a paid specialist. You simply cannot
expect the kind of knowledge given by a benefit specialist to be given for
free, it needs to be acquired and paid for just as it is in any other profession
and yes we are 'professional' - ask my MP she'll tell you.

Specialising in welfare benefits is not something you can learn with a few
days or even months training, you have to learn by your mistakes and from
the experience you gain in dealing with the vast array of problems thrown
up by the welfare state. It's a subject in itself, it's not just about benefits it's
about how Parliamentary intention knits with a person's lawful entitlement.
You need to well and truly know the Secretary of State before you can take
him on and challenge him. As government's intention's change so does your
'angle of attack'. You need to be prepared to say "I'm not sure this is right
and because I think it's wrong I'm going to challenge it". It can mean hours
immersed in social security law case law and becoming engrossed in
volumes upon volumes of on-line issues of legislation. It requires an
analytical and enquiring mind and an ability to challenge a wrong. You also
learn to trouble shoot a problem through experience - it becomes like a
sixth sense as to where the route of the problem can be found. The solution
cannot be found in any number of 'advice guides' - it's way more
complicated than that.

It's absurd that we pay the DWP and ATOS and our Politicians to create so
many mistakes, they rub salt in to the wounds by justify their existence in
pretending to fix it.

It is people like me who can see what's going to go wrong, I've given you
examples of just some of those potential problems in the preceding posts. I
didn't work it out by reading an a to z guide to potential problems with
Universal Credit. What I would dearly like to be able to do is to help
government (yes I mean what I say) in helping to iron out the problems
which I see on the horizon.

There's a need to work with us as an aid to trouble shooting the problems
which will only get worse if they remain undetected. There's a need to work
with us in accepting we will challenge a system when we can so clearly see
where it will go wrong.

And lastly on this one there's a need to pay us for helping to put things
right; you never know one day you (government) may just thank us in
steering you away from the disaster which you are about to bring upon
yourself with the implementation of Universal Credit.

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