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Universal Credit (UC) represents one of the most considerable changes to the welfare system in Britain in decades. Replacing six working-age in-work and out-of-work benefits from the legacy system, an estimated seven million households will eventually receive the benefit. UC aims to simplify the benefits system, make work pay, ease the transition from welfare to work, and encourage personal responsibility.

However, the rollout of UC has been beset by delays and is now scheduled to be complete in 2023, six years later than forecast. Despite initially enjoying widespread support when first proposed by the Coalition Government in 2010, UC has come under increasing criticism as evidence of significant hardship experienced by some on UC has come to light. From July 2019, ‘managed migration’ of claimants currently on the legacy system will begin, meaning a significant expansion of UC caseload.

That is why, today, Bright Blue publishes a new, extensive report, entitled Helping hand? Improving Universal Credit. The report explores the impact of the unique and key design features of UC during three critical stages of the claimant experience: accessing UC; managing on UC; and, progressing on UC.

Drawing on forty depth interviews with a broadly representative sample of UC claimants, the report is unique among the wider evidence base because of the breadth of experiences and attitudes captured, the diversity of claimants interviewed, and the focus being on key and unique design elements, rather than the level of financial support.

Accessing UC

UC will enable and expect almost everyone to register and manage their award online. Most of our interviewees, particularly younger ones, found the online process a positive experience and an improvement upon the legacy system. But a minority of interviewees with lower levels of digital literacy, notably older interviewees and those with physical or mental health problems, struggled with the system during and after the registration process. A notable issue which emerged, and not just for older interviewees, was trouble with identity verification in the registration process.

By a considerable margin, the design feature which caused the most concern for a clear majority of our interviewees was the minimum five-week initial waiting period between finalising their claim and receiving their first award payment. Although this was recently reduced by Government from six weeks, interviewees still spoke of the stress induced by this period. Most had to rely on friends and family and some even fell into rent arrears and took on commercial debt. A majority were aware of the availability of ‘advance payments’, in effect a loan deducted from future UC awards to cover expenses in the initial waiting period, but few felt sufficiently informed of the exact details of repayment terms. Worryingly, roughly a third of our interviewees did not actually receive their initial UC award payment on time

Managing on UC

UC claimants receive a single and monthly payment instead of separate benefits payments arriving at different dates under the legacy system. This change was positively received, with interviewees citing a greater ability to track their household finances. However, there was a notable division amongst interviewees over the benefits of monthly payment. Unsurprisingly, those with recent experience of a monthly wage were more likely to speak positively about it, as they saw UC as a ‘top-up’ to their wages. On the other hand, a lot of interviewees, especially older ones and those who were single or divorced, spoke about the struggle of adapting to a new monthly budgeting cycle.

There was widespread criticism of the payment of the housing element of UC to claimants, rather than to landlords, as under the legacy system for many on Housing Benefit in the social rented sector. Even those who did not personally struggle with receiving this money directly thought the legacy system was better. Concerns were raised by many interviewees over the dangers of requiring claimants to allocate a large portion of their overall income to rent. Self-employed claimants, on whom there has been relatively little research with regards UC, described few difficulties proving themselves to be ‘gainfully self-employed’, but there was some scepticism that their work coaches had sufficient knowledge about their unique circumstances.

Progressing on UC

Most interviewees understood that as their earnings increased, the amount of their UC award would be gradually withdrawn. This is known as the taper rate. A significant majority of interviewees, meanwhile, failed to demonstrate awareness of the work allowance, an amount some claimants can earn before UC is withdrawn as earnings increase. In contrast, the removal of hours-based thresholds for receiving benefits was noted by many interviewees. The need to no longer reach and maintain a specific number of hours to claim certain benefits such as Working Tax Credit was viewed positively, enabling greater flexibility in working patterns and fewer interactions with the benefits system.

Our interviewees were noticeably very positive about their work coaches, who give advice to claimants throughout the entire time they’re claiming UC. Those who had experience of the legacy system were particularly positive of work coaches under UC compared with their previous Jobcentre Plus advisers. Unfortunately, the positive experience was not entirely universal, with some interviewees citing a lack of effort, clash of personality or misinformation.

A key design element of UC has been increased and expanded conditionality for claimants. Groups such as those in work, but on a low income, are now subject to conditionality for the first time. All claimants must now sign a ‘claimant commitment’, which sets out goals and actions they must complete in order to receive their benefit. Interestingly, there was widespread recognition of the need for this. Indeed, some interviewees just saw it as common sense that in return for financial support from the state, claimants must accept certain obligations. Similarly, interviewees accepted and understood the premise of sanctioning, but some were critical of their imposition in practice, seeing them as punitive.

Conclusion

Our depth interviews show that most claimants are coping with and adapting to UC. There are positive experiences, especially with work coaches. Nevertheless, there is a significant minority of claimants that are struggling, either initially or long-term. There were claimants with socio-demographic characteristics that especially seemed to struggle with key design elements: claimants that were older, unemployed, self-employed, and with mental or physical health problems.

At the end of the report, we propose eleven original recommendations to improve the experience of the significant minority of claimants that are dissatisfied and struggling with key and unique design features of UC. Our policy ideas also seek to ensure the positive experiences many claimants have can be enjoyed by others.

We are at a critical time in the rollout of UC. The UK Government has an important window of opportunity, before rollout accelerates, to reflect on this and other important evidence and introduce significant changes to improve the effectiveness of and support for UC.

Sam Lampier is a Researcher at Bright Blue and co-author of Helping hand? Improving Universal Credit