Yahoo News DWP warned over Universal Credit change that will 'affect thousands'
A warning has been issued that switching families from traditional legacy benefits to Universal Credit could result in 'real-world misery for thousands'.
The Department for Work and Pensions (DWP) has been told to ensure claimants, particularly those who are 'vulnerable', transfer without losing their benefits. In response, the DWP has maintained that benefit cancellations only occur as a final option following repeated unsuccessful engagement attempts.
The Public Accounts Committee (PAC) highlighted that the DWP predicts approximately four per cent of current legacy benefit receivers will not transfer to Universal Credit during the process known as managed migration.
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The initiative, announced in 2010, sought to overhaul the welfare system by introducing Universal Credit, an amalgamated benefit set to replace six means-tested legacy benefits designated for working-age people, namely: Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker's Allowance, and income-related Employment and Support Allowance.
As of last March, roughly 2.2 million households were on legacy benefits, and the DWP had earmarked 900,000 of these for the move to Universal Credit. The PAC underscored that the DWP was up against the 'challenging task of moving claimants off its own legacy benefits, some of whom are likely to be vulnerable'.
The statement read: "Although the department expects only around 4% of these claimants will not switch to Universal Credit, we would be very concerned if large numbers of these people did not transfer and were to lose their benefits.
"It is vital that the department helps these claimants to make the switch, including offering face-to-face support and making sure people fully understand the process, including the arrangements for transitional protection."
A report from the National Audit Office (NAO) in February highlighted that 21% of households claiming legacy benefits had not transferred to UC after receiving a notice to switch, resulting in these older benefits being stopped. Almost all of these households had been receiving tax credits, according to the report.
In a significant speech on welfare reform last week, Prime Minister Rishi Sunak committed to 'accelerate moving people from legacy benefits onto Universal Credit, to give them more access to the world of work'.
The DWP has stated its goal to notify all households to transition to UC by the end of 2025. Committee chairwoman Dame Meg Hillier expressed concern that if the transition process 'fails even an apparently small proportion of people, it will lead to real-world misery for thousands'.
She added: "Our committee has scrutinised Universal Credit since its inception. We must not forget how massive a change it is to how benefits are delivered, impacting millions of people. This means if the transition from legacy benefits to UC fails even an apparently small proportion of people, it will lead to real-world misery for thousands.
"The DWP must make sure that people are not cast into financial hardship due to a bureaucratic change, and that robust support is in place for those vulnerable claimants who need it most."
The DWP argues that an increase in fraud across society as a reason for high rates of errors related to UC, rather than laying out a plan for how it is tackling the problem.
Alison Garnham, Chief Executive of Child Poverty Action Group (CPAG), commented: "Warnings like the PAC's are coming thick and fast as the DWP steamrolls on with managed migration, leaving vulnerable claimants in its wake without the benefits they are entitled to and need. The department's lack of concern that so many tax credit claimants haven't moved to UC and have had their benefits cut off as a result is chilling.
"The DWP must put its spreadsheet targets aside, slow the roll-out of UC right down and come up with a safe process that won't leave large numbers of claimants falling over a cliff edge into debt. The time to do this is now not later, when even more claimants will be at risk."
A spokesperson for the DWP responded: "We disagree with these findings, which do not acknowledge that the vast majority of Tax Credit customers have successfully moved to Universal Credit. There is a range of support to help people move, including dedicated helplines, extensions and transitional protection for those who need it.
"Universal Credit is having a sustained positive impact on the jobs market, with people on Universal Credit more likely to be in work within three, six and nine months of their claim."
