Universal credit: A three-step plan
Our social security system, like our NHS, should be there for us all, especially those who need it most. It needs updating, so it works in today’s world.
This report sets out a plan and policy recommendations for improving UC across three key areas: adequacy, the design and function of UC, and UC’s relationship to work. It is important to note that this is not a comprehensive list of issues that need reform in UC, instead these are our priorities for the new government, based on our evidence and expertise. These recommendations for reform will require a mix of amendments to primary and secondary legislation, changes to guidance, and a number of operational/technical changes to the UC system. We have set out these changes in an implementation plan at the end of this report.
Summary of recommendations on adequacy
- Scrap the two-child limit
- Remove the benefit cap
- Increase the child element of UC by £20 a week
- Remove the lower rate of the standard allowance for under 25s.
- Reduce the monthly cap on deductions
- Launch an immediate review of benefit adequacy
- Legally enshrine that all benefits (and associated thresholds) rise as a minimum by the higher of inflation and earnings growth each year
Summary of recommendations on the design and function of UC
- Amend the UC digital claim form
- Use the information the DWP holds to calculate UC awards accurately
- Improve the appeals process in UC
- Pause/slow the roll out of managed migration
- Automatically transfer at-risk claimants
- Fill the gaps in the ‘enhanced support journey’
- Increase the capacity of advice services
- Improve the support for people without digital skills or access to manage claims
Summary of recommendations on UC’s relationship to work
- Conduct a review of conditionality in UC
- Automatically passport people who receive disability benefits into a non-stringent work conditionality group
- Make a work capability assessment mandatory for new claimants if the claimant queries their ability to work
- Substantially reduce the use of sanctions
- Provide voluntary tailored employment support to everyone on UC capable of work
- Introduce a second earner work allowance
- Cover 100 per cent of childcare costs in UC
- Extend childcare to parents preparing for work or training
- Review monthly assessment periods
- Abolish minimum income floor and surplus earnings rules
An earlier version of this report was published in June 2024.