Universal Credit problem number a million and one – or thereabouts

18-01-23

A few grassroots activists can only directly help a tiny proportion of those who need assistance, but we hope by writing about what we do we can reach a few more people with similar problems, and also make a wider public a bit more aware of the realities of life relying on the DWP. The following two cases came to us by phone and internet. (The number in the heading is just a wild guess, but with 660,000 people now on UC it could be an under-estimate.)

Leanne rang us because she was planning to set up her own small business and she wanted to know whether to follow the jobcentre’s advice and move from Income support onto Universal Credit. Of course individual priorities will vary and ultimately the decision is hers, but we could tell her to start with that the DWP likes to encourage people to sign up to Universal Credit, but that very rarely is it to their advantage.

Superficially, UC would seem to be helpful. You don’t lose almost all your benefit when you start earning some money, as Leanne would do if she stayed on Income Support; and you can get help with childcare. BUT, what the jobcentre didn’t tell her is that UC for the self-employed can cause some very serious problems, and although these have been pointed out for a long time, nothing has been done to rectify them. Firstly, UC, which is calculated monthly, is notoriously bad for people with irregular earnings. If you earn a lot in one month you will get little or no UC income; but even if you earn next to nothing the next month there is only a limited amount of benefit that you can receive, and there is no scope to average the earnings out. After the first year, the DWP will assume that you are always earning at least what you would get in a minimum wage job and working your full number of hours – normally thirty-five hours a week, unless, like Leanne, you have caring responsibilities. If you actually earn much less, your UC will still be calculated as if you were earning that full sum – and you can also be made to look for additional work and do other tasks, under threat of being sanctioned. Even before then the DWP can decide that you are not earning enough and must look for something else. And every month you are expected to submit your accounts.[1]

We sent Leanne a link to this powerful Channel 4 News report, and we also pointed out that at present she is relatively lucky. Her youngest child is three, and while she is on Income support, she will not have to look for work until he is five. However, under UC, single parents are expected to look for sixteen hours work a week straight after their youngest child’s third birthday; so, if she goes onto UC and her business doesn’t work out, she will be under pressure to work or search for jobs sixteen hours a week, or lose her benefit.

Not much incentive to set up on her own or go onto Universal Credit, then. What was that about ‘making work pay’?

Tina missed her Work Capability Assessment last September. Or rather, they missed her. Because of the extent of her problems she had asked for the assessment to be carried out at home. She couldn’t manage the first date that they sent, and they promised to send her another by post, but the assessor arrived without notice, and she was out – so the DWP closed her claim. (Failure to notify people about their assessment is not uncommon, and we have talked with people to whom it has happened more than once.) She put in a Mandatory Reconsideration and then an appeal – we had to help her with the appeal because the person she had been seeing at CAB had just left.

When, after two months with no income as she waited for the result of the Mandatory Reconsideration, she learnt that she could apply for Universal Credit, she applied for that too. And she asked for it to be backdated. The letter she got back from the Universal Credit people was quite bizarre. UC doesn’t really do backdating except for a month if you fit a set list of criteria. The ‘Decision Maker’ explained that Tina’s reasons for applying late for UC were ‘not unreasonable’, but couldn’t count as they didn’t fit the list. One of the listed reasons is having a disability, and Tina had previously been in the ESA Support Group with mental health problems. However the letter went on to explain that if Tina had done her Mandatory Reconsideration herself, then she was not too disabled – and if she had got help then her helper should have told her to apply for UC. On that logic, it is difficult to see how this criteria could ever come into play.

Tina can continue to try and get an extra month’s UC by appealing against this backdating decision, but she also wanted to know what would happen to her missing money if her main appeal is successful and she is eventually recognised again as not fit for work. Although CAB had told her that her money would then be backdated to cover the gap, this was not the impression she was getting from the jobcentre. We were glad to be able to confirm that, unsurprisingly, it was the jobcentre that was confused (or confusing). She is currently on basic UC. If she wins her appeal and is eventually found unfit for work she will stay on UC but not be forced to apply for jobs. And if she is also found unfit to do ‘work related activities’ then she will get an additional ‘limited capability for work-related activity’ element in her UC. If she gets found unfit for work then she should also get awarded backdated ESA for the gap before she applied for UC. (Thank you CPAG for clarifying this!)

For now, though, she is coping with the legacy of the gap in her benefits, plus reduced payments because of deductions for the advance that she had to take to cover the initial UC waiting period. We have suggested she ask for help from the Scottish Welfare Fund.

Meanwhile, back at last week’s stint outside the jobcentre (see above) we met yet another person who appears to have been wrongly made to apply for Universal Credit (complete with nine week wait) when she had just lost a job and should have been on contribution-based Jobseeker’s Allowance. (And we have just been contacted by someone who has had her PIP stopped because the DWP has claimed erroneously – for the third time in a row – that she had not sent in her renewal form.)

(Thanks for the last two stalls to Norma, Gary, Tony, Gordon, Duncan and Dave)

[1] From April 2018 new (and complicated) rules will mean that extra money earned one month will be carried over to reduce the UC received the following months. You will be able to carry over actual losses too, but not low pay; and previous earnings won’t be taken into account when considering whether to make you look for more work – so this will solve none of the problems identified above, while adding an extra complication – 29/1/18.

 

 

 

 

 

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3 thoughts on “Universal Credit problem number a million and one – or thereabouts

  1. A good article. The complexity and unintended (?) consequences of UC continues to astound. For Glasgow, autumn 2018 (UC full service) looms like a dark cloud. As per your selves, advice agencies will do their best but will only be able to directly help a minority of those affected. It is vital that these issues continue to be highlighted and changes made to the way in which UC is implemented.

    Like

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