U C What is Universal Credit? 1 March 2012 NI Universal Credit revised go live - April 2014

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What is Universal Credit?

1 March 2012

NI Universal Credit revised go live - April 2014

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Content

Introduction


Universal Credit Policy Intent

Gateway & Touchpoints

Communications approach


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Aim

• give a broad overview of Universal Credit at this early stage of development

• provide an opportunity for you to raise questions and concerns and suggest ways we can overcome concerns

The aim of this presentation is to:


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Scale of the Change

“…the most significant change to the welfare

system since Beveridge in 1940s”

Iain Duncan Smith, DWP Secretary of State

“…we need to break inter-generational worklessness, create new role models in families and communities,

and break the cycle of benefit dependency. ”

Nelson McCausland, DSD

Minister


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ObjectivesDWP White Paper Universal Credit: Welfare that Works –

published November 2010 – builds on work of Centre for

Social Justice;

“Current system is failing and has perverse incentives”;

Universal Credit proposes to help:• Ensure that work always pays• Protect the most vulnerable• Improve levels of benefit uptake• Reduce fraud and error in the system• Streamline the system• Achieve administrative savings


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Replaced by Universal Credit

Income based JSA

Income related ESA

Income Support

Child Tax Credits

Working Tax Credits

Housing Benefit

SF (Budgeting loan elements)

What’s in / What’s outNot covered by Universal Credit

DLA / PIP

Contributory Benefits (although earnings rules aligned)

Child Benefit

Carers Allowance

SF Crisis Loans & CCGs

HB (Rates) (Council Tax Benefit equivalent)

Passported Benefits

Claims made for households


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Universal Credit - Overview

Universal Credit

JSA ESA IS HB TCs

Customer

Programme

Self serves onlineOperation of the taper

Finds work

BenefitsIncreased income

Employment

Poverty

Worklessness over generations

Replacement of welfare benefits

Legislation

Automation

Advice and assistance


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NI Programme Structure

Legislation

Policy Impacts

Analysis

Business Change

Communications & Stakeholder Engagement

Programme Management

Finance Directorate

HR Planning

Customer & Service Design

IT

Delivery ICT Policy


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Nov 13Apr 13 Oct 14 Oct 15 Oct 16 Oct 17

DWPPilot

New claims to JSA, ESA, IS, and HB will be phased out from Oct 13 Management of caseload and payments will continue

All new claims to Tax Credit cease in April 14. Renewals, caseload management and payments continue.

Working age legacy benefits

Universal Credit caseload builds …

Timeline – UC Implementation

Current assumption – full transition over 4 years

Housing Costs / Child costs for pensioners - to Pension CreditPension age benefits

Mar 11Jan 12Feb 11

Westminster Welfare Reform Bill

NI Welfare Reform Bill

Jun12

NI UCP Start- Up

ESA & IS

JSA

HB


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Universal Credit

Policy Intent


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A single allowance – which replaces income-related social security benefits, housing benefit and working and children’s tax credit;

A single allowance – which can be paid whether you are in or out of work;

Focused on household earnings – through credit payment reflecting circumstances (including additional elements for disability, caring duties, housing costs and children);

Tapering of the allowances earnings rise – Universal Credit withdrawn at a constant rate of 65p in the pound of net earnings


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Constant Taper

Comparison of Income Under UC and Current System

0

50

100

150

200

250

300

0 5 10 15 20 25 30 35 40 45 50

Hours Worked

Ne

t In

co

me

(£

)

UC net income

Current net income

UC benefit

Current benefit

Single customer, no children, National Minimum Wage, Renting (£95 rent)


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Constant Taper

• Taper – rate at which benefit is

reduced to take account of

earnings

• Currently different tapers for

social security benefits & Tax Credits

• Universal Credit – single withdrawal rate (Marginal Deduction Rate) of 65% applied to earnings net of tax and National Insurance

NB: Taper rate (MDR) could change nearer the launch date


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Universal Credit – Key Features• Replaces income-related social security benefits, housing

benefit and working and children’s tax credits;

• Single household payment instead of mixture of weekly, fortnightly and monthly payments;

• Personal responsibility for bills instead of direct payments by state

• Self service and digital access;

• Conditionality and labour market support

• Childcare support; and

• Gradual reduction in benefit as earnings increase.


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PolicyFour Conditionality Groups under Universal Credit:

1. Full Conditionality

2. Work Preparation

3. Keeping in Touch with the Labour Market

4. No Conditionality


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Full Conditionality

Full Conditionality

•Default Option

•Be immediately available for work

•Claimant commitment

Exceptions for immediate availability e.g.:

•Those who need to make childcare arrangements;•Those who need to serve a period of notice.

Personalised Conditionality Requirements

Permitted customers can place limitations on work they must search for in certain circumstances e.g.:•Those with a good work history•Those with a health condition


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Work Preparation

Customers in this group are:

• Disabled or have a current health condition which means they have limited capability for work at the current time

• Expected to take reasonable steps to prepare for work


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Keeping in Touch with the Labour Market

Customers in this group are:

• Lone parents or lead carers

in a couple with a child over

one but under five

• Expected to attend periodic interviews to discuss their plans for returning to the labour market


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No ConditionalityCustomers in this group:• Are disabled or have a serious health condition which

prevents them working and preparing for work; and/or

• Are a lone parent or lead carer

in a couple with a child under one;

and/or

• Have intensive and regular caring responsibilities; and/or

• Earning above the relevant threshold


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Universal Credit Sanctions – Key Aspects

Sanction Applicable to: 1st failure 2nd failure 3rd failure

Higher Level e.g. failure to take up a job offer

Claimants subject to all work-related requirements

3 months 6 months 3 years

Medium Level

e.g. failure to undertake all reasonable action to obtain work


4 weeks 3 months

Lower Level

e.g. failure to undertake particular, specified work

preparation action, failure to participate in a work-focused

interview


Claimants subject to work preparation and work-focused

interview requirements

Open ended until re-engagement followed by

1 week 2 week 4 weeks

Lowest Level

Failure to participate in a work-focused interview

Claimants subject to work-focused interview requirements only

Open ended until re-engagement


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Welfare Reform Bill Progress

• Introduced House of

Commons: 16th Feb

2011;

• Introduced House of Lords: 16th June 2011;

• Expected to complete Westminster Parliamentary

process- end February 2012;

• Royal Assent GB Bill estimated by March 2012.


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Northern Ireland Timeline

• Minister has yet to

decide on the policy

proposals;

• Introduce to NI Assembly after Westminster Bill receives Royal Assent – estimated March 2012;

• Accelerated or normal passage – still to be decided.


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Universal Credit Gateway and Touchpoints


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How the system will work?

Payment of net earnings Universal Credit Payment by BACS

Makes a claims and Provides evidence

Data on maximum Tax Tax Earnings

Entitlement rules revenue

Earnings data feed

Money Flow Data Flow

Customer

HMRC Sets tax rules and collects revenue

Delivery body Assesses the claim

and determines entitlement

Employer Deducts tax, pays wages

and provides earnings details to HMRC

Payment System applies taper and pays the correct

amount

Real Time Information system (RTI) – Data & Money flows


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Universal Credit Customer Gateway

I need help to make a new claim. I telephone UC number, call into a

front line service or seek help from a Customer Representative Group /my appointee. Work focused Interview is

arranged if applicable.If application completed go to 4.

If application not completed go to 3b.

RISK DRIVEN GATEWAY INTERVENTION

UC may contact me to verify some details on my

application. If details confirmed go to step 6.

If I have to provide supporting evidence go

to 5a.

I find out about Universal Credit through media

communications, frontline services, hospital, Customer

Representative Group , family or friends

I am unable to make a claim online or by phone. Someone calls with me and takes my UC claim at my home. Application completed

go to step 4.

If application not completed UC to consider contingency to allow advancement to step 4

I become sick, unemployed,

responsible for a child or young

person*, need to supplement my income, or my

household changes**

1

2

F2F

Unemployed or working

and earning under

conditionality threshold

Employed + earning

over conditionality

threshold

F2F

My circumstances, income or capital

mean I am not entitled to UC.

I have not provided supporting evidence requested at step 5 and application has been disallowed – I

may ask for a reconsideration of, or appeal this decision.

I try a claim online.If application completed go to step 4.If unable to complete online go to step 3a

3b

DATA GATHER

Basic customer details, family, finances, health, medical evidence, housing.I have made an application to UC and agreed my initial responsibilities and await next steps at 4a, 5 or 6

5

Supporting evidence requested at step 5 confirms

my circumstances are correct. Go to step 6. Supporting evidence

provided means changes to my application are required

go to step 5b. No evidence provided or

supporting evidence confirms no entitlement go to step

4a.

F2F

I agree to the changes as specified in 5a and proceed to 4a or 6.

I disagree with changes specified in 5a and have to provide further supporting evidence.

I provide further evidence. Outcome will either be to go to step 4a or 6. I do not provide further evidence proceed to step 4a or 6.

* Birth of new child, adoption, foster carer or become a guardian

** Joint to single household, single to Joint household, new household or Joint claim where both customers need to complete online claim.

I have made a successful claim to UC and continue my journey as Unemployed, Sick or Employed

Sick4

4a

5a

5b

3a

3

6

Draft - Process still in development


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Universal Credit Customer TouchpointsUnemployed customer or customer earning under conditionality thresholdUC UC

I receive my first payment. I may

receive budgetary management support and

information on passport benefits.

I receive notification/e-mail to prompt

me to view confirmation of my UC award

online.

I attend my Work focused

Interview bringing with me

any requested information and agree relevant responsibilities

(Claimant Commitment).

I receive an e-mail reminder about

my Work focused Interview 2 days

prior to my interview.

If I make my claim online I may receive a phone call to book a Work focused Interview which I must attend.

I move into work or increase my earnings so that I am now earning

above the conditionality threshold. I may still be

entitled to UC.

I continue to “sign on” and satisfy my conditionality and the conditions of

my Claimant Commitment (products still

being developed).

I move into work or remain in work earning below the

conditionality threshold and still

receive UC.

I ask for reconsideration/

appeal against my Failed To

Attend/Failed To Participate decision.1 4 6 7

13

10

I fail to attend/participate in

Work focused Interview or satisfy my Claimant Commitment. My UC

payment is sanctioned as appropriate.

I no longer have to “sign on” or

have any mandatory UC conditionality.

I continue to “sign on”. I may have new conditionality and Claimant Commitment until my circumstances change to where I am earning over the

conditionality threshold.

11

14 15 16

F2F

F2F

Conditionality threshold Claimants earning below this threshold could face full or some work-related conditionality, for as long as they continue to receive Universal Credit. At present this is set as equivalent to 35 hours at minimum wage.

I have completed my

claim. I am either

unemployed or working

and earning below the

conditionality threshold.

I do not attend my Work focused Interview. I will

not be paid UC until I attend my Work focused Interview . Go to point 2

if Work focused Interview reorganised.

3

I fail to agree my Claimant

Commitment. I will not be

paid UC until I do so.

5

8

I move into work or increase my earnings so that I am earning above conditionality threshold

and also am now not entitled to any UC. My UC

claim closes.

9

2

I do not satisfy conditionality requirements. My UC may be

sanctioned (work on sanctions still ongoing).

12

Draft - Process still in development


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Communications Approach


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Communication Objectives

Immediate

To ensure there is a consistent

level of understanding of

Universal Credit, the rational for

the change and how it will work.


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Medium to long term

Ensure customers transferring to Universal Credit understand how and when the change will affect them;

Encourage customers and employers to contact us through the right channel and encourage the use of online channels; and

Encourage customers and employers to give us the right information, at the right time.


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Longer term

Demonstrate the greater incentive to take up and increase work that Universal Credit will create;

Encourage people who are entitled to Universal Credit to claim it; and

Reduce both staff and customer fraud and error by providing appropriate and useful information.


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Approach

Communications to existing customers

Staff updates

Media coverage

Stakeholder Events

Online information – NI DIrect

Communications Approach


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Contact us

[email protected]


Documents

U C What is Universal Credit? 1 March 2012 NI Universal Credit revised go live - April 2014