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Universal Credit

David Shaw, DWP 2 November 2011. Universal Credit. Overview. Why Universal Credit? Scope and design Conditionality under Universal Credit Sanctions Timetable for implementation. IB/SDA/ESAC only 558,200. IB & DLA 547,500. IB & CA 900. IB & CA & DLA 1000. DLA only 446,400.

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Universal Credit

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  1. David Shaw, DWP 2 November 2011 Universal Credit UNCLASSIFIED

  2. Overview Why Universal Credit? Scope and design Conditionality under Universal Credit Sanctions Timetable for implementation

  3. IB/SDA/ESAC only 558,200 IB&DLA 547,500 IB&CA 900 IB&CA&DLA 1000 DLA only 446,400 IS&IB&CA <500 IS&IB&CA&DLA <500 CA only 291,600 IS&IB&DLA316,600 CA&DLA 15,700 IS&IB 72,000 IS&CA 187,700 IS&CA&DLA 18,100 IS&DLA 439,700 IS/ESA(ir)/PC only 1,289,500 The Case for Change: complexity, affordability, work-incentive BB/WBwith another non-JSA benefit 13,500 Total in receipt 5,639,000 BB/WBonly 90,500 All other combinations <500 JSA with another benefit 32.400 JSA only 1,317,300 Around 50%of these individuals receive housing benefit as well (913,100 on HB only) SOURCE: DWP Information Directorate: Work and Pensions Longitudinal Study, Aug 2010 NOTES: - IB & CA figures only include those who are in receipt of payment. IB credit only and CA beneficiaries who do not receive benefit are excluded. - ESA claims included in IB and IS caseload information UNCLASSIFIED

  4. Universal Credit: Incentive to Work UNCLASSIFIED

  5. Universal Credit: Scope Universal Credit means the following benefits will no longer be needed… • Income related Jobseeker’s Allowance • Income related Employment and Support Allowance • Income Support (including SMI) • Child Tax Credits • Working Tax Credits • Housing Benefit • Social Fund (budgeting loan elements) • But the following benefits will still be available… • Disability Living Allowance (will be replaced by PIP in 2013) • Contributory Benefits (although earnings rules aligned) • Child Benefit • Pension Credit (that will include a Housing Credit to support those who rent, the intention is it will broadly replicate Housing Benefit rules & a new additional amount for children in the Guarantee Credit) • Carers Allowance • Council Tax Benefit replacement UNCLASSIFIED

  6. Universal Credit: Design Universal Credit: lone parent with two children Disregard Taper UNCLASSIFIED

  7. Universal Credit: Conditionality framework No work-related requirements Work-focused interviews Work preparation All work-related requirements • The Welfare Reform Bill sets out: • four types of work-related requirement • four conditionality groups • No “partners” - each adult in a household will be placed into a group according to their individual capability and circumstances. • Recorded in a claimant commitment

  8. Universal Credit: Personalisation? • Greater scope for personalisation / flexibility • Conditionality does not depend on benefit • Primary legislation enables discretion • No “always on” conditions e.g. actively seeking & available for work • No disentitlement • No need for prescriptive regulations – what can / can’t be done

  9. Universal Credit: in-work conditionality • Previously … conditional out of work benefits, unconditional in-work benefits • UC removes division – when should conditionality stop? • In current system at around £70 per week / £3500 per year • Under Universal Credit reachof conditionality higher: • Expected hours of work * NMW • Single claimant, max is 35 hours * NMW (£210pw) • Joint claimants, max is 70 hours * NMW (£420pw) • Enables use of conditionality to drive progression / support retention • But no obligation to do more – considering carefully the right level and approach • Effectiveness? • What is reasonable? • Resources? • Pilots?

  10. Universal Credit: Sanctions

  11. When will we deliver Universal Credit? Oct ‘17 Apr ‘13 Feb ‘11 Oct ‘13 Oct ‘14 Oct ‘15 Oct ‘16 Apr ‘14 New claims from out of work customers Test Design & build New claims from in work customers “Natural” migrations as a result of changes of circumstances Managed migrations 2.5m 4.5m 6m 8m Legacy load JSA, ESA, IS, HB, WTC, CTC UC load

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