What is Universal Credit?

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

2. Content Introduction What is Universal Credit? Universal Credit Policy Intent Gateway & Touchpoints Communications approach NI Universal Credit revised go live - April 2014

3. Aim The aim of this presentation is to: • 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 NI Universal Credit revised go live - April 2014

4. Scale of the Change “…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 “…the most significant change to the welfare system since Beveridge in 1940s” Iain Duncan Smith, DWP Secretary of State NI Universal Credit revised go live - April 2014

5. Objectives DWP 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 NI Universal Credit revised go live - April 2014

6. What’s in / What’s out Replaced by Universal Credit Income based JSA Income related ESA Income Support Child Tax Credits Working Tax Credits Housing Benefit SF (Budgeting loan elements) Not 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 forhouseholds NI Universal Credit revised go live - April 2014

7. Universal Credit - Overview Employment Benefits Operation of the taper Increased income Customer Self serves online Universal Credit Finds work Advice and assistance Worklessness over generations Programme Automation Poverty Legislation Replacement of welfare benefits IS TCs ESA HB JSA NI Universal Credit revised go live - April 2014

8. NI Programme Structure NI Universal Credit revised go live - April 2014

9. Timeline – UC Implementation Feb 11 Mar 11 Jan 12 Jun12 Apr 13 Nov 13 Oct 14 Oct 15 Oct 16 Oct 17 Westminster Welfare Reform Bill NI Welfare Reform Bill NI UCP Start- Up 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. Universal Credit caseload builds … Working age legacy benefits JSA ESA & IS HB Pension age benefits Housing Costs / Child costs for pensioners - to Pension Credit Current assumption – full transition over 4 years NI Universal Credit revised go live - April 2014

10. Universal CreditPolicy Intent NI Universal Credit revised go live - April 2014

11. What is Universal Credit? 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 NI Universal Credit revised go live - April 2014

12. Constant Taper Single customer, no children, National Minimum Wage, Renting (£95 rent) NI Universal Credit revised go live - April 2014

13. 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 NI Universal Credit revised go live - April 2014

14. 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. NI Universal Credit revised go live - April 2014

15. Policy Four Conditionality Groups under Universal Credit: Full Conditionality Work Preparation Keeping in Touch with the Labour Market No Conditionality NI Universal Credit revised go live - April 2014

16. Full Conditionality • FullConditionality • Default Option • Be immediately available for work • Claimant commitment • 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 • Exceptions for immediate availabilitye.g.: • Those who need to make childcare arrangements; • Those who need to serve a period of notice. NI Universal Credit revised go live - April 2014

17. 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 NI Universal Credit revised go live - April 2014

18. 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 NI Universal Credit revised go live - April 2014

19. No Conditionality Customers 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 NI Universal Credit revised go live - April 2014

20. Universal Credit Sanctions – Key Aspects NI Universal Credit revised go live - April 2014

21. 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. NI Universal Credit revised go live - April 2014

22. 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. NI Universal Credit revised go live - April 2014

23. Universal Credit Gateway and Touchpoints NI Universal Credit revised go live - April 2014

24. How the system will work? Real Time Information system(RTI) – Data & Money flows NI Universal Credit revised go live - April 2014

25. Universal Credit Customer Gateway F2F 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. 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 F2F I become sick, unemployed, responsible for a child or young person*, need to supplement my income, or my household changes** 3b I have made a successful claim to UC and continue my journey as Unemployed, Sick or Employed 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 Unemployed or working and earning under conditionality threshold I try a claim online. If application completed go to step 4. If unable to complete online go to step 3a 3a 5 1 4a 6 Sick 4 2 3 Employed + earning over conditionality threshold 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. 5a I find out about Universal Credit through media communications, frontline services, hospital, Customer Representative Group , family or friends 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. F2F 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. * 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. 5b 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. Draft - Process still in development NI Universal Credit revised go live - April 2014

26. U U C C Universal Credit Customer Touchpoints Unemployed customer or customer earning under conditionality threshold 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 do not satisfy conditionality requirements. My UC may be sanctioned (work on sanctions still ongoing). I fail to attend/participate in Work focused Interview or satisfy my Claimant Commitment. My UC payment is sanctioned as appropriate. I move into work or remain in work earning below the conditionality threshold and still receive UC. 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. I continue to “sign on” and satisfy my conditionality and the conditions of my Claimant Commitment (products still being developed). I receive an e-mail reminder about my Work focused Interview 2 days prior to my interview. I receive notification/e-mail to prompt me to view confirmation of my UC award online. 15 16 12 14 I ask for reconsideration/ appeal against my Failed To Attend/Failed To Participate decision. 13 3 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. 1 2 4 6 7 8 5 If I make my claim online I may receive a phone call to book a Work focused Interview which I must attend. I attend my Work focused Interview bringing with me any requested information and agree relevant responsibilities (Claimant Commitment). I receive my first payment. I may receive budgetary management support and information on passport benefits. 9 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. I have completed my claim. I am either unemployed or working and earning below the conditionality threshold. I fail to agree my Claimant Commitment. I will not be paid UC until I do so. 10 F2F 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. F2F 11 I no longer have to “sign on” or have any mandatory UC conditionality. Draft - Process still in development NI Universal Credit revised go live - April 2014

27. Communications Approach NI Universal Credit revised go live - April 2014

28. 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. NI Universal Credit revised go live - April 2014

29. Communication Objectives • 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. NI Universal Credit revised go live - April 2014

30. Communication Objectives • 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. NI Universal Credit revised go live - April 2014

31. Approach NI Universal Credit revised go live - April 2014

32. Contact us Universal.credit@dsdni.gov.uk NI Universal Credit revised go live - April 2014