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Secretary of State announces more changes to Universal Credit

In a speech in Kennington on Friday, Secretary of State for Work and Pensions Amber Rudd announced a raft of changes to Universal Credit. These changes are intended to ensure the benefit is delivered in a way that meets the needs of claimants. The speech focused on three areas of improvement: managed migration; payment flexibilities; and support for women.  But, the announcement which has garnered most attention is cancelling the extension of the "two-child" policy. 

Two-child policy changes

Currently, only claimants with fewer than three children can apply for Universal Credit, but the intention was to allow claims for larger families from February 1 2019. As Universal Credit's "child element" is only payable in respect of the first two children in a household, this would penalise larger families. 

The changes announced by Secretary Rudd mean that the two-child limit will no longer be applied in Universal Credit, but only in respect of children born before the policy took effect in April 2017. Although the partial rollback on this policy is welcome, many have argued that it does not go far enough as households with children born after 1 April 2017 will still be affected by this restriction and will still struggle financially under Universal Credit. 

**Update** The Statutory Instrument which will give effect to this change has now been laid before Parliament and will come into force on 1 February 2019. The Universal Credit (restriction on Amounts for Children and Qualifying Young Persons) (Transitional Provisions) Amendment Regulations 2019 are available from Legislation.gov.uk. Similar legislation will be required for Northern Ireland in order to ensure that this change is reflected in the UC system here. 

Changes to managed migration

Rather than proceed with the current migration regulations, the Secretary of State has committed to amending these to remove the government's powers to migrate all legacy claimants onto the new system and to protect claimants who receive the Severe Disability Premium. Rather than the wholescale managed migration of legacy benefit claimants, the government will establish a pilot migration process for 10,000 legacy claimants and to use this pilot process as a learning opportunity to produce new legislation to aid the future managed migration of claimants. 

Throughout this pilot process, the government will adjust its approach as needs be and will report findings on the pilot process to Parliament. 

Payment flexibilities

In Northern Ireland, UC claimants are paid differently to those in other jurisdictions. Claimants in NI will receive UC payments twice monthly and housing costs payments are paid directly to the claimant's landlord, unless the claimant has elected to receive these directly. The approach in other jurisdictions is to make one monthly payment to claimants and for that payment to include all housing support, relying on the claimant to then pass the rent money on to his or her landlord. The Secretary of State has acknowledged that these arrangements are not working for all claimants and has committed to 

  • building an online system for private landlords which will allow landlords to request that tenants' UC housing costs elements be paid directly to them
  • providing greater support to those claimants who struggle with monthly payments, including improving the provision of more frequent payments for new claimants. 

Improvements for women

The improvements for women are largely focused on the way in which childcare costs payments are made to claimants, and impose a greater flexibility in order to ensure that parents do not lose out because they haven't reported their costs on time and to ensure that the initial month's childcare costs do not act as a barrier to employment for parents starting work. Additionally, the government will be looking at ways to ensure that the main carer in a household is the person who receives the Universal Credit payment in as many cases as possible, in order to limit the potential for financial abuse. 

Legislative process

Minister of State for Employment Alok Sharma has confirmed that two separate Statutory Instruments will be laid before the House of Commons in order to give effect to the changes announced by Amber Rudd. The first is a negative Statutory Instrument to provide for the Severe Disability Premium Gateway, which will prevent legacy claimants who are in receipt of SDP from moving naturally to UC and allows them to continue to claim legacy benefits until the managed migration process is in place. 

The second Statutory Instrument will contain regulations to ensure transitional protection for claimants who are moved over to UC and for transitional payments to those claimants who have already migrated to UC and were previously in receipt of SDP. This statutory instrument will limit the number of claimants who can be managed over to UC to 10,000 as part of the government's commitment to take a more considered approach to the migration process. 

Minister Sharma also confirmed that he will be bringing forward the necessary legislation in order to ensure that Universal Credit includes an element of support for any child born before 1 April 2017, regardless of the child's position in the household. 

Northern Ireland will require similar statutory provisions in order to give effect to these changes locally. 

Tagged In

Benefits, Welfare Reform