UNIVERSAL CREDIT CLAIMANTS LEFT IN THE DARK ABOUT THEIR ENTITLEMENTS
Universal credit (UC) claimants are routinely in the dark about how much they should receive, how their awards are calculated and if and how they can challenge DWP decisions, because the Department’s communications with claimants are opaque and inadequate, new analysis from the Child Poverty Action Group (CPAG) finds.
One in five of the 1,110 UC cases referred to the charity’s Early Warning System - which gathers and analyses cases from welfare rights advisers across the UK - involve a DWP administrative error likely to result in a claimant getting the wrong amount. Because UC rolls six different ‘old’ benefits into one, often claimants cannot tell what its components are - and so cannot know if it is right. And since information provided by the DWP about how their award has been worked out is frequently inadequate, payments may be wrong, and go unchallenged. As a result, many claimants are at risk of sliding into debt, CPAG warns.
In a Foreword to CPAG’s report on the analysis, former Lord Justice of Appeal The Rt Hon Sir Stephen Sedley writes:
It’s a fundamental principle in a democracy that governmental bodies must have reasons for their decisions. It’s equally fundamental - or should be - that they should be able to explain what those reasons are. And if the explanation does not stack up, then, again on first principles, the decision should be open to review or appeal. Yet, as this publication demonstrates, the Department for Work and Pensions is repeatedly falling down on every element of these public law obligations in its administration of universal credit… People in need are left to guess at and grope for things which should be clear and tangible. The consequences…feed into the stress and worry that so many people managing on low incomes experience, which in turn can affect family life for children growing up in these environments.
The report says UC helpline staff are often unable to explain how a claimant’s award has been worked out because they don’t have access to payment calculations which in the vast majority of cases are processed automatically on UC’s digital system.
Claimants’ online monthly payment statements give only basic information on how their award has been calculated so spotting errors – such as the omission of allowances for children – can be difficult or impossible for claimants (see case studies below). And on housing costs, payment statements do not give an explanation when there is a discrepancy between the amount of rent allowed for in a UC calculation and the amount of rent actually due – often the discrepancy is because payments for rent within UC are capped by Local Housing Allowances or by the bedroom tax, but their payment statements leave claimants none the wiser1.
CPAG wants more information to be given in claimants’ statements including a full breakdown of how awards have been calculated and a nil entry for allowances claimants are considered ineligible for so that errors can more easily be identified. And it wants the online UC account, via which claimants manage their claim and communicate with UC advisers, to be redesigned so that all decisions about a claimants’ award are clearly identified as formal decisions (and as such can be challenged) and stored in one place so that they are accessible. Currently DWP decisions are scattered in different parts of a claimant’s online account. Claimants have to trawl through old journal entries to find them and they may not be clearly labelled.
CPAG’s analysis also shows that the DWP’s written information on claimants’ appeal rights falls short of legal requirements because it suggests a first-stage reconsideration of a benefit decision (known as a Mandatory Reconsideration) is only possible where there is new information relevant to a claim or where a claimant believes the Department has overlooked something. In fact, disagreeing with a benefit decision is sufficient grounds for requesting a Mandatory Reconsideration2. The Department’s standard-issue information also fails to tell claimants that there are time limits for requesting a reconsideration – this is also unlawful.
The government’s own survey of claimants’ experiences found that nearly a quarter of UC claimants (23%) felt that the decision about their claim either hadn’t been explained at all, or hadn’t been explained clearly, and 16% of UC claimants reported that they had been given incorrect or contradictory information by the Department for Work and Pensions (DWP) in relation to their claim.3 Another government survey of UC claimants found that over 40% of claimants received a different award than they were expecting, and over 30% of claimants disagreed with the statement “My Universal Credit account makes it clear what entitlements I am being paid for.”4
Cases that have come to CPAG’s Early Warning System include:
- A working mother who had two part time jobs claimed universal credit but the award was much lower than she was expecting. Her UC statement showed the standard allowance, housing costs element and her earnings, plus the earnings taper, but she couldn’t see anything wrong with them. When she saw a welfare rights adviser, they picked up that there was no child element included for her daughter, and there was no work allowance included for a working parent. This meant that the woman and her daughter were approximately £400 worse off each month as a result of errors in their payment calculations.
- A grandmother, mother and children lived together in a three bedroom property; all of the bedrooms were occupied. The grandmother claimed universal credit but the housing costs element was very low. She didn’t know why and she didn’t obtain a full breakdown of the calculation until 6 months later. The breakdown showed that she had been wrongly subject to both the bedroom tax (on the basis that she was not entitled the third bedroom) and a non-dependant deduction, causing her to be underpaid for months on end.
- A disabled mother and her adult child moved into a new property and started a claim for universal credit. The first payment was very low and the mother was so distressed about affordability that she contacted her social landlord about ending the tenancy. The UC statement listed amounts for her standard allowance and her housing costs element. It was not clear to her that UC had not taken into account her eligibility for the limited capability for work (LCW) element, nor that her housing costs element was being incorrectly reduced by a non-dependant deduction5. This only became apparent when her welfare rights adviser investigated the matter. Without the welfare rights adviser’s expertise, the claimant would never have been able to challenge the missing LCW element or the non-dependant deduction (from which she was exempt because she receives qualifying disability benefits).
Commenting on the Early Warning System analysis, Child Poverty Action Group Chief Executive Alison Garnham said:
“Transparency should be a the heart of a fair social security system but our research shows universal credit claimants do not always understand the amounts they’re getting so it’s harder for them to pick up on mistakes or to predict how their awards might change. That is all the more worrying as the number of universal credit claims is set to double this year to 3 million and the scope for misunderstandings, omissions and errors is vast. And because UC is an all-in-one benefit, with all your eggs in one basket, when things go wrong for claimants the financial fallout can be dire. But there are practical, inexpensive changes the DWP can make to clear the fog. The Department must improve the information it provides so that universal credit claimants are not floundering in the dark about their award. Clear and accessible information on how decisions are made and your right to appeal is the bare minimum we should expect from a modern benefit.”
Notes to editors:
- The report on the analysis, Computer says ‘No!’ is here.
- Further information on CPAG’s Early Warning System.
- CPAG media contact: Jane Ahrends on 020 7812 5216 or 07816 909302
- 1. For private tenants, Housing Benefit entitlement is based on a Local Housing Allowance (LHA) rate appropriate to the tenant’s circumstances and the local rental market. If the LHA is less than a tenant’s actual rent, neither Housing Benefit nor UC will cover the full rent so tenants must make up the shortfall or try to find cheaper accommodation. The bedroom tax reduces housing benefit for people deemed to be under-occupying a property in the social rented sector.
- 2. Mandatory Reconsiderations are a pre-requisite step before claimants can appeal a benefit decision to an independent tribunal.
- 3. Claimant Service and Experience Survey 2017 – 2018, Department for Work and Pensions, January 2019
- 4. Universal Credit Full Service Survey, Department for Work and Pensions, June 2018
- 5. Claimants can receive an extra amount of UC if they have limited capability for work because of a health condition or disability and meet certain other criteria. Under Non Dependant rules, the housing costs element of a UC award can be reduced if a claimant has someone aged over 21 who is not a partner and is not liable for paying rent, living with them.