Universal Credit - Implementation and Passported benefits

1. Universal Credit - Implementationand Passported benefits

2. Background to Universal Credit • Universal Credit is an income related benefit for single people and couples with or without children • A couple will be required to claim jointly • Universal Credit will be paid monthly and in arrears • Claimants will have a specified payday each month, normally 7 days after the end of their assessment period: • Assessment period 22 October – 21 November • Payday 28th November and then 28th of each subsequent month • Each benefit unit will receive a single payment into a nominated bank account • HMRC will forward PAYE details via Real Time Interface (RTI)

3. Why do we need Universal Credit? we are simplifying a complex system of multiple benefits: the current system has over 10,000 pages of guidance for advisors it is expensive to administer we are making work pay: more help for low income working families claimants will keep more of what they earn improving incentives to increase hours of work simplified system will make moving to work feel less ‘risky’

4. Universal Credit – the ‘launch pad’ for work • It will be the gateway to work services and our employment support programmes (e.g. the Work Programme) • It brings together in-work and out-of-work support, smoothing the transition into work - making it safe for a claimant to try a job (or increase earnings) without losing all their benefit • It will be a work-like experience: • Direct monthly payments like a salary would be paid • The claimant commitment – a ‘contract’ (clear expectations) just like an employer • Advice and learning and development support.

5. How is Universal Credit different? Universal Credit Current System The welfare system has more than 30 benefits each with their own rules and criteria Universal Credit provides a new single system means-tested support for working-age people who are in or out of work Work incentives can be very low, benefits are reduced to take account of earnings but different benefits have different rules Universal Credit will ensure that work pays. Financial support will be reduced at a consistent and predictable rate and people will generally keep a higher proportion of their earnings Conditionality: some benefit claimants are capable of working but have no obligations to look for work Universal Creditwill personalise conditions according to people’s capability and circumstances Universal Creditis a single monthly payment to each household (Though we will retain the ability to pay more frequently or to split payment in exceptional circumstances) Payments are paid to different adults in a household and for various periods

6. Universal Credit – a 21st century service • Universal Credit will be ‘digital by default’ with most claims made and managed online. • Aim to achieving ‘digital by default’ by: • Designing a compelling and easy to use service • Working across government, private and voluntary sector to get more people online, e.g. with digital champions, GoON • Supporting online channel through telephony, high street access • But for those who cannot use online services, we will offer alternative channels. • Online service will be supported by a network of face-to-face support: • A national service offering with targeted local flexibility from October 2013 – but ultimate goal remains a fully integrated Universal Credit service offering

7. Universal Credit – how is the service being designed? • design is focused on claimant journeys • system is built from scenarios with tangible stories – covering different household types and circumstances • building the system using an ‘Agile’ approach • build the system in small pieces • continuous testing – allows much earlier testing of the end-to-end processes • continuous feedback loops from claimants and staff • solve problems within the design process • match requirements to build

8. Universal Credit – the right support for claimants • the new service will be straightforward for many – but some claimants will need support to deal with the changes • Financial Products -we are working with the commercial and social banking (e.g. credit unions) to develop bank accounts that have in-built budgeting capability • Tailored Support - we are conducting detailed segmentation of claimant personal budgeting support needs to understand the demand for such support and to help us build solutions into mainstream support or develop tailored solutions • Exceptions - for those who will not be able to manage, even with support, we are developing an exceptions framework • Engagement - we have established an external advisory group to help us with this - the Support and Exceptions Working Group, which includes representatives from local authorities, housing and advice organisations

9. Episode 1 - Pathfinder: April 2013 • Pathfinder phase April – October 2013 • Pathfinder will be in the Greater Manchester and Cheshire region within the following Local Authority boundaries: • Oldham • Tameside • Wigan • Warrington • Pathfinder will be mainly single people with no children, no earnings or caring responsibilities.

10. The Universal Credit Pathfinder • Universal Credit will go live in the Greater Manchester and Cheshire area from April 2013, six months before national roll-out in October • it will enable DWP to test the Universal Credit system and its IT with local authorities, employers and claimants in a live environment before Universal Credit is rolled out across the country • there will be a gradual build-up of new claimants during the pathfinder phase. It is estimated that by October 2013 just over 5,000 adults will be in receipt of Universal Credit. • the Pathfinder will take place in specific postcodes for citizens with particular circumstances. It will be delivered in four local authorities - Oldham, Tameside, Warrington and Wigan - with the involvement of four Jobcentres - Ashton-under-Lyme, Oldham, Warrington and Wigan. The specific postcodes and scope for this activity will be announced shortly

11. Episode 2 – October 2013: March 2014 • From October 2013 we will begin to roll out UC across Great Britain, learning from pathfinder and avoiding a ‘big bang’.From October, people making new claims who would otherwise currently claim JSA will progressively be accepted on to UC, and wider roll out will follow.The sequencing of the Go Live of each Jobcentre is still under discussion.Our intention is that UC will be delivered from all Jobcentres to some customer groups by April 2014.

12. How is the Programme working with Scotland? • Social security is a reserved matter for the GB government, but it interacts with many devolved matters. The UC Programme is engaging with: • Scottish Government – who are members of the Universal Credit Senior Stakeholder Board. • Scottish Local Authorities – are represented on Universal Credit Local Authority forums, the Convention of Scottish Local Authorities (COSLA) are members of the Senior Stakeholder Board, input from several Scottish Local Authorities to Universal Credit working groups. • The third sector and other stakeholders – for example, this year the Programme attended the Scottish Council of Voluntary Organisations annual conference, Capita’s Scottish welfare reform conference, visited Glasgow Housing Association. • The UC Scottish Advisory Group provides a tri-partite forum for Scottish Government, COSLA and DWP - to jointly consider impact of UC in Scotland, share best practice Scotland, and consider where better alignment is needed between welfare reform measures. • Scotland is represented in testing of Universal Credit – Direct Payment Demonstration Project in Edinburgh and Local Authority-led pilots in West Dumbarton, North Lanarkshire and Dumfries & Galloway.

13. Direct Payments Demonstration Projects Six local authorities & housing associations are now trialling direct payments of Housing Benefit to selected tenantsProject timeline Edinburgh Wakefield Shropshire Oxford Torfaen Southwark

14. Local Authority-led Pilots Key: LA-led pilots Pathfinder preparation projects Direct Payment Demonstration Projects 2013 focus pilots -Twelve pilots will run from autumn 2012 to September 2013 to explore how local expertise can support residents to claim Universal Credit.2013 focus pilots will look at:- encouraging claimants to access online support independently; - improving financial independence and managing money;- delivering efficiencies and reducing fraud & error; and- reducing homelessness.Post 2015 focus pilots – onthe longer term role for local authorities in supporting Universal Credit claimants. North Lanarkshire West Dunbarton Edinburgh Dumfries & Galloway Wakefield Oldham Wigan West Lindsey Rushcliffe Shropshire Melton Birmingham Oxford Torfaen Southwark Caerphilly Newport Lewisham Bath & NES North Dorset

15. Challenges • Universal Credit is an in and out of work benefit and when fully implemented it is estimated it will be payable to 7.5m benefit units comprising of 10 million adults. • Eligibility for passported benefits will need to be reconsidered. • Opportunity in the longer term to consider more fundamental reform to simplify and streamline some passported benefits in future. • In the short term DWP’s priority is to introduce Universal Credit in a way that works smoothly with all passported benefits

16. Passported Benefits – the story so far • In May 2011 Lord Freud Minister for Welfare Reform commissioned Social Security Advisory Committee to undertake an independent review of passported benefits and how they link with Universal Credit • Their report and the Government response was published in March 2012. A copy the report and the Government response can be found at: http://www.dwp.gov.uk/docs/ssac-rev-of-pass-bens.pdf • The Government response acknowledges the opportunities and challenges that the introduction of Universal Credit poses for the Devolved Administrations and Government Departments in the administration of passported benefits

17. DWP currently working with Devolved Administrations and Other Government Departments to agree a solution for passported benefits in the short term - very early thinking which is being explored could include basing eligibility for passported benefits and services on a combination of UC entitlement and an earnings threshold • Our aim is to work with the Devolved Administrations and Other Government Department to look at a more strategic solution in the longer term taking into consideration: • The vital support passported benefits provide to people on low incomes and how highly valued they are by the individuals that receive them • The opportunity to reduce the complexity of some passported benefits • The need to ensure any changes continue to support work incentives – a key objective of Universal Credit

18. UC Award Notification • The UC award notification will include: • Basic details such as name / address / NINO etc • Details of how the award has been calculated – including a number of different elements for example amounts included for housing, child, carers • Deductions taken for income, capital and earnings • It will also include a statement informing the claimant if they are entitled to other benefits and directing them to a URL