MSP Briefing
Scottish Government Debate on Universal Credit
Key Points:
- There is mounting evidence that the roll-out of Universal Credit (UC) is damaging the lives of disabled people, causing fear, distress, homelessness and hardship.
- Inclusion Scotland welcomes the joint call made by Jeane Freeman, the Social Security Minister, and Kelly Parry, COSLA’s Community Wellbeing Spokesperson, for a halt in the UC roll-out.
- Introduction
1.1.Inclusion Scotland is a national network of disabled people’s organisations (DPOs) and individual disabled people. Our main aim is to draw attention to the physical, social, economic, cultural and attitudinal barriers that affect disabled people’s everyday lives and to encourage a wider understanding of those issues throughout Scotland. Inclusion Scotland is part of the disabled people’s Independent Living Movement.
1.2.Last year Inclusion Scotland worked with a number of agencies (e.g. CABs, CAS, AdvoCard, Welfare Rights Team) in East Lothian to raise awareness of the issues that Universal Credit was creating for local disabled people.
- Cuts in disabled people’s benefit entitlement due to the introduction of Universal Credit:
2.1.Severe Disability Premium: Up to 230,000 severely disabled people throughout the UK who do not have another adult to assist them may eventually receive between £30 and £61.85 less in benefits each week due to the ending of the Severe Disability Premium for “new” Universal Credit claimants.
2.2.Although disabled people will initially have transitional protection this may be lost if they have a change of circumstances. Losing entitlement to ESA, even only temporarily, whilst undergoing mandatory reconsideration or an appeal which re-instates entitlement, counts as a change in circumstances.
2.3.Phasing out of Disability Tax Credits:Due to the introduction of Universal Creditover 110,000 disabled people who are in work are at risk of losing up to £40 a week in Disability Tax Credits. This hardly seems to be in line with the UK Government’s stated objective of “making work pay”.
2.4.Disability Premium for families with Disabled Children:Over 100,000 disabled children and their families stand to lose up to £28 a week with support for some families being more or less halved from £60 pw to £31.50 a week.
- Online claims and disabled people:
3.1.All Universal Credit claimants, including disabled people, are initially signposted to the self-service online channel, and other channels are used as an exception. Telephone claims can be completed where appropriate but this seems to be happening only very rarely. All claimants, other than in exceptional circumstances, are also required to maintain their claim online.
3.2.Disabled people are the group in society that are least likely to have internet access. As of 2015 over one in three[1] (35%) of disabled people did not access or use the internet at all. This compares to over 90% of the non-disabled population having a connection and using the internet.
3.3.However it’s worse than that because people without qualifications; with low levels of literacy and/or living on low incomes (47%) are least likely to have internet access and disabled people are over-represented in each of those groups. Needless to say people without qualifications, with low levels of literacy and on a low income are those most likely to be without work and claiming benefits.
3.4.Those with learning difficulties, both congenital and acquired (e.g. through brain injury, oxygen deprivation at birth, etc.) and those with learning impairments (such as dyslexia) are amongst those most likely to have no qualifications. But even those disabled people with physical/sensory impairments and no learning difficulties are more likely to leave school with no qualifications. Disabled people are more than twice as likely as non-disabled people to have no qualifications (26% as opposed to 10%).
3.5.Those who are out of work are also less likely than those in work to have internet access and over half (57%) of Scots disabled people are workless - but of course those without work are those most likely to be making a claim to benefits.
3.6.Moreover it’s not just disabled people who lack internet access who might have difficulty making an online claim. Even those who do occasionally access the internet (perhaps using social media such as Facebook) but who also have learning difficulties; communication difficulties, visual or physical impairments, may still have difficulty in completing lengthy, complex online benefits application forms.
3.7.In relatively recent DWP research[2], 45% of participants said that they would need support to claim and manage their claim online. A survey by Glasgow CABs published in 2013 found that over 75% of those using CAB services would require such assistance. Yet 650,000 Scottish households will require to be migrated to Universal Credit. How are all these households to be assisted?
3.8.Where online and telephone claims are not appropriate, the DWP have said that they will provide face-to-face support to complete online forms in “exceptional” circumstances. In practice very few disabled people seem to be receiving this support. Even where it is provided DWP staff have little knowledge or understanding of the online access problems faced by disabled people. That is, it is not usually possible to “train” someone to overcome a learning difficulty simply by showing them how to use a computer.
3.9.In consequence of the difficulties disabled people have faced in making online claims (and maintaining them) they have told us that they suffered significant delays in the payment of Universal Credit and were also subjected to sanctions which have caused severe hardship.
- Sanctions:
4.1.Sick and disabled people are often, wrongly, found fit for work at Work Capability Assessments (WCAs) for Employment and Support Allowance (ESA) (i.e. over 60% of those who take their cases to appeal have their entitlement to ESA reinstated). If disabled people challenge the assessment they are then forced to go through “Mandatory Reconsideration” of the assessment decision.
4.2.There is no time limit on Mandatory Reconsiderations and disabled people receive no ESA whatsoever whilst their case is being reconsidered. In 2015 twenty-five thousand people waited over 6 months for their Mandatory Reconsideration to be completed. In such circumstances the DWP advises claimants to claim JSA or Universal Credit. Past JSA sanction figures showed that 20% of those being sanctioned were sick and disabled people.
4.3.The latest DWP statistics show the number of sanctions on people on Universal Credit are at an all-time monthly high, and since its launch in 2015, more than 100,000 UC claimants have been penalised. The number of sanctions imposed on people claiming Jobseeker's Allowance or Universal Credit rose from 18,994 in July 2016 to 33,860 in December, before falling back to the 30,000 mark by March 2017[3]. This is an increase of over 50% in just six months. It should be noted though that it is likely that an even higher number have been sanctioned than show in official figures as some areas of the UK have not provided their local figures.
4.4.As yet the DWP has not provided a breakdown of the proportion of those being sanctioned who are sick and disabled people. However as the Universal Credit sanctions regime is even more punitive than that of JSA conditionality it is very likely that an even higher number and proportion of those being sanctioned are sick and disabled people.
4.5.Hardship Payments:Claimants subject to higher, medium and low-level sanctions are sanctioned an amount equivalent to 100% (or 50% if one member of a couple is sanctioned) of their“standard allowance” of Universal Credit.The amount of the sanction is deducted off the claimant's UC award. If a claimant will suffer hardship as a result they can apply for aHardship Payment.
4.6.However Hardship Payments made under Universal Credit, unlike those under JSA, are loans rather than benefit payments. This means that they are recovered after the sanction period is over. The recovery is at the same rate as the sanction (i.e. 40% of the standard allowance).
4.7.This means that the claimant (and their family) receives a reduced rate of benefits both during the sanction period and until after the Hardship Payments have been fully recovered – effectively doubling the length of the sanction. The sanction continues to be recovered even if the claimant stops claiming Universal Credit and/or enters work.
- Civil penalties:
5.1.Another major problem that disabled people face due to the requirement to make, and maintain, Universal Credit claims online is that there is now a £50 civil penalty for claimants who “negligently” provide incorrect information or fail to notify the DWP of a change of circumstances. In addition if claimants are overpaid, even when this is due to DWP error, this is recoverable from their benefits.
5.2.Needless to say someone with learning difficulties, or a low level of literacy, is more likely to make errors, first in understanding what information that they are being asked to provide, and then in providing answers to the questions on an online form.
5.3.As yet we have seen no figures on the imposition of civil penalties by the DWP but we would expect disabled people to be, unfairly, disproportionately represented amongst those penalised.
- Payment of Universal Credit
6.1.For the great majority of claimants, Universal Credit is paid monthly and in arrears. Claimants are responsible for managing their own financial affairs, including making sure that they pay rent.
6.2.In “exceptional cases” (DWP’s wording), Universal Credit claimants are able to access alternative payment arrangements, depending on their ability to budget, pay bills and manage a single payment. These alternative arrangements may include:
- More frequent payments
- Paying housing costs direct to the landlord.
- Splitting payments
6.3.A far larger proportion of disabled people may have difficulty in managing to budget and pay bills. For example over 40% of those currently on ESA, who will eventually be transferred to Universal Credit are disabled people with cognitive impairments/learning difficulties or mental health issues or both. Unless they are all treated as “exceptional” a large proportion of this group might be expected to get into difficulties in managing to budget.
6.4.Rent arrears:Figures from both private sector landlords and Local Authorities suggest that a very large and increasing proportion of tenants are getting into rent arrears as a result of the roll-out of Universal Credit.
6.5.Rent arrears for council house tenants have doubled in some areas of Ross-shire in just two years and local councillors attribute the roll-out of Universal Credit in Inverness to be behind this sharp rise[4]. The amount owed in rent arrears has increased by over £100,000 in just two years.
6.6.Meanwhile in South Lanarkshire nearly nine out of ten (87%) of council tenants in receipt of Universal Credit are in rent arrears owing a total of £525,000[5]. Amongst the problems encountered are “…significant delays in receiving payment, the wrong or no payment being made to housing costs and an inability to contact the UC processing centre to resolve issues on behalf of customers.”However just 633 South Lanarkshire tenants are in receipt of Universal Credit. The Council is expecting rent arrears levels to increase hugely when full roll-out of Universal credit occurs.
6.7.Recentresearch[6]published by Residential Landlords Association shows that a significant number of landlords who have tenants in receipt of Universal Credit have seen them fall into arrears. In a sample size of 2,974 landlords, 38%reported that they have experienced Universal Credit tenants going into rent arrears in the past twelve months and were owed, on average£1,600in rent arrears.
6.8.Figures obtained by theObserverusing the Freedom of Information Act show that half of all council tenants across 105 local authorities who receive the housing element of universal credit are at least a month in arrears on their rent, with 30% two months behind. By contrast, less than 10% of council tenants on housing benefit are a month behind on their rent, with under 5% running more than two months behind.
- Conclusion: For all of the above reasons Inclusion Scotland have joined with Citizens Advice Scotland, the Joseph Rowntree Foundation, the Poverty Alliance and others to call for a halt in the roll-out of Universal Credit until such time as the many problems that Universal Credit poses for disabled, and non-disabled, people are addressed and resolved by the DWP. We therefore welcome the joint call made by the Social Security Minister, Jeane Freeman MSP and Kelly Parry, COSLA’s Community Wellbeing Spokesperson, made to Secretary of State for Work and Pensions, David Gauke, for a halt in the UC roll-out.
If you have any questions on this briefing, or for further information, contact:
Bill Scott, Director of Policy
Inclusion Scotland
Tel: 0131 281 086
[1] Scottish Household Survey 2015
[2] “Work and the welfare system: a survey of benefits and tax credits recipients”, DWP, 2012
[3]“Benefit Sanctions Shoot up 50% in six months”, Politics UK, 4/9/17
[4] “Sharp rent arrears rise in Ross-shire blamed on new Universal Credit benefit system”, North Star, 23/8/17
[5]“Almost 90% of tenant in receipt of Universal credit are in rent arrears”, Daily Record, 17/8/17