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Something old, something new, something borrowed for Universal Credit

Two events, staged not many miles apart, took place on Friday which may well affect the eventual implementation of Universal Credit, so Jeremy Hewer, SFHA's policy advisor, digs a bit deeper. 

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In a jobcentre in Kennington, London, Secretary of State for Work and Pensions, Amber Rudd gave a speech which outlined her approach to Universal Credit. While she announced a range of measures - some of which were reiterations of announcements made by previous Secretary of State Esther McVey - in the High Court, a judgement was made which could have profound implications for in-work claimants of Universal Credit.

In her speech. Amber Rudd repeated the intention to run a pilot of 10,000 managed migrations to Universal Credit before going to scale in 2020. It is still planned to complete the managed migration process by 2023. These were measures that had been previously announced in October by Esther McVey – the only surprise being that they have been represented to the media as new. What has changed from the original announcement is the intention to change the current regulations, removing the powers of the government to embark on a wholesale migration whilst allowing it to conduct the pilot and to block ESA claimants receiving Severe Disability Premium from being naturally migrated to UC. She also announced that she would look to develop the use of Alternative Payment Arrangements and to have the Universal Credit payment go to the main carer and to encourage the use of the Flexible Support Fund to help with upfront childcare costs. The two child limit is also to be partially rolled back in that it will no longer be applied to children born before April 2017 – but it will still be applied to children born after that date.

On the same day as Rudd’s announcement, the High Court passed judgement, in respect of ‘in-work’ claimants, in that their entitlement to Universal Credit should be based not on when they receive their pay but on the period the pay covers. One of the anomalies of the Universal Credit System is that if two pay packets fall in the same assessment period (for example, if someone is paid early because of a Bank Holiday, it can mean that they receive no Universal Credit for that month and lose the benefit of the in work allowance when they receive no pay packet in the following month. This judgement would also affect those who lose out because they are paid weekly rather than monthly. It is yet to be seen if the DWP will appeal this judgement, but if they do not, or they lose a subsequent appeal, the Universal Credit assessment process will need significant change.

Details of the action, brought by the Child Poverty Action Group and solicitors Leigh Day on behalf of four single parents, can be found on the Leigh Day website, the human rights and personal injury law firm. Commenting on the Secretary of State’s speech and the High Court judgement, SFHA’s head of public affairs, Sarah Boyack, said:

“Ms Rudd’s speech did not announce any change of heart in respect of managed migration, reiterating the intention for a pilot starting in July 2019 that had been announced back in October. What is new and very welcome, is the willingness of the Secretary of State to look at improving Alternative Payment Arrangements and for payments to go to the main carer. Also welcome is help with upfront costs for childcare that are only paid in arrears in Universal Credit, which causes great difficulty for those trying to set up child care. It is disappointing that the two child limit has not been totally scrapped.

“The High Court judgement is significant, in that, if accepted by the DWP, it will go a long way to making the assessment of Universal Credit fairer and making work pay.”