Work and Pensions Committee – The NEN

MPs call for statutory sick pay reform to address inadequate financial support for workers most in need

Statutory sick pay (SSP) is failing to provide enough support for those who most need financial help when ill and should be increased and made more widely available, MPs say today.

The report from the Work and Pensions Committee says that a modest increase to SSP in line with Statutory Maternity Pay would strike a reasonable balance between providing extra financial support and not placing excessive extra costs on businesses. It also says that all employees should be eligible for SSP, not just those earning above the lower earnings limit.

Rates of sickness absence and ill health have increased in recent years, with a record 185.6 million working days lost to sickness or injury in 2022. During its inquiry, the Committee heard the current system of SSP was an insufficient safety net for those who relied on it, and no use at all to those who were not eligible.

Despite consultations by previous governments, no permanent changes have been forthcoming. While the Committee understands why the Government decided that the Covid-19 pandemic was the wrong time to introduce changes, due to the immediate additional costs on employers, it finds that this argument is now less valid.

In addition to recommending changes to the SSP rate and eligibility, the report calls on the Government to amend legislation to enable SSP to be paid in combination with usual wages in order to encourage phased returns to work.

On the cost to businesses, the report concludes that the overall impact of SSP reform is difficult to predict, but even if they did not result in lower levels of sickness absence, larger firms would be able to absorb the costs. It says this would not be true of smaller businesses, however, and calls on the Government to consult with small and medium-sized businesses on the design of a small business rebate for SSP.

Finally, the report says that the Government should establish a contributory sick pay scheme for the self-employed to increase support during periods of illness.

Rt Hon Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Statutory sick pay is failing in its primary purpose to act as a safety net for workers who most need financial help during illness.

“With the country continuing to face high rates of sickness absence, the Government can no longer afford to keep kicking the can down the road on reform. The Committee’s proposals strike the right balance between widening and strengthening support and not placing excessive burdens on business.

“A growing number of workers are now classified as self-employed and a new contributory sick pay scheme for self-employed people would be a welcome step towards ensuring they are they are no worse off financially during periods of sickness than employees on SSP.”

A full list of the Committee’s conclusions and recommendations is available on Pages 34–36 of the report.

Commenting on the publication of a Work and Pensions Committee report on whether the government should reform statutory sick pay to provide more financial support to low-paid employees, TUC General Secretary Paul Nowak said: “The Covid-19 pandemic showed that our sick pay system is in desperate need of reform.

“It beggars belief that ministers have done nothing to fix sick pay since.

“It’s a disgrace that so many low-paid and insecure workers up and down the country – most of them women – have to go without financial support when sick.

“The committee is right that ministers urgently need to remove the lower earnings limit and raise the rate of sick pay.

“Wider reform is also needed to remove the three days people must wait before they get any sick pay at all.

“Working people deserve better.

“It’s time for a new deal for workers, like Labour is proposing – which includes stronger sick pay and a ban on zero hours contracts.”

Analysis published by the TUC in January revealed that 1.3 million people do not earn enough to qualify for statutory sick pay – and 70% are women.

And zero-hours contract workers are eight times more likely than those on secure contracts (30.3% compared to 3.6%) to miss out on statutory sick pay because they don’t earn enough to qualify.

MPs call for new regulatory approach to secure thriving future for defined benefit pension schemes

Changes to proposed regulation and improvements in governance standards are urgently needed to ensure private sector defined benefit (DB) pension schemes remain an active and thriving part of the pensions landscape and work in the best interest of scheme members, MPs say today.

The Work and Pensions Committee report concludes that despite a steady decline in number in recent years, DB pension schemes are still of critical importance to both savers and the UK economy.

It warns however that two decades of regulatory and policy caution from DWP and The Pensions Regulator (TPR) have led to a low-risk approach to investment that threatens to inadvertently finish off the few remaining DB schemes still open to new members.

With an improvement in funding levels over the past decade presenting new challenges and opportunities for schemes, the report calls for a fresh approach both to funding regulation and the treatment of surpluses in pension and compensation schemes.

Among recommendations on the latter, the report calls for DWP and TPR to look at ways of ensuring the reasonable expectations of scheme members for benefit enhancement are met where there has been a history of discretionary increases.

On the new funding regime proposed by the Government to come into force in September, the Committee’s inquiry heard concerns that open schemes would be forced to de-risk unnecessarily, potentially leading to premature closure.

The Committee calls for the Government to address such concerns in the final version of the Funding Code and for TPR’s objective to protect the Pension Protection Fund to be replaced with a new duty to protect future, as well as past, service benefits.

PPF reserves now stand at £12 billion and the report calls for legislation to allow the levy to be reduced to zero and for compensation levels to be improved.

To encourage better governance, the Committee welcomes the introduction of a trustee register to improve TPR oversight. The report notes TPR’s view that consolidation, including through pension Superfunds, is one of the main ways to improve governance, and calls for the required legislation as soon as possible.

Rt Hon Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Defined benefit pension schemes are hugely important to savers planning for a comfortable retirement and for the UK economy.

“The improvement in scheme funding levels presents opportunities for both to benefit, but a new approach to regulation and governance is needed to protect the best interest of scheme members and allow still open schemes to thrive.

“The flexibility afforded by the much-improved financial position of the PPF, which we applaud, gives the Government an opportunity to ensure open schemes are not hindered by overly cautious restrictions imposed by regulations.

“While many trustee boards operate to high standards, new standards for trustees can foster confidence that this is the case across DB schemes.”

The report follows up on some of the points raised during the Committee’s previous inquiry into DB pensions with Liability Driven Investments, which examined the events of autumn 2022. The Committee heard that a repeat of the events was now unlikely given the steps taken to improve resilience.

A full list of the Committee’s conclusions and recommendations is available on Pp 54–58 of the report.

Benefit levels in the UK: MPs call for annual uprating guarantee

Committee calls for cost of living benchmark

The UK Government must outline the extent to which benefits should be supporting people with daily living costs and bring forward a plan so that benefit levels meet the new benchmark, a House of Commons committee said yesterday.

The Work and Pensions Committee’s report on benefit levels in the UK also calls on the Government to introduce a new ‘uprating guarantee,’ to uprate working-age benefits and the Local Housing Allowance rate each year, to end the uncertainty faced by people claiming benefits.

The Committee also recommends that the Household Support Fund, which enables local authorities to help those in need, be made a permanent part of the social security system.

The recommendations follow a year-long inquiry launched after the Committee’s recommendation in its 2022 cost of living report to review the adequacy of benefits levels. The 2022 report highlighted evidence that a root cause of the financial challenges faced by households “lay in the fundamental inadequacy of social security support”, but the Government insisted that there was no objective way of deciding what benefits should be.

In response to that challenge, Thursday’s report says that the Government should develop a framework of principles and set a benchmark and objectives linked to living costs to measure the effectiveness of benefit levels.

If DWP finds that it is not meeting these objectives, it should set out how it intends to reach them, for example by increasing benefit levels when the financial situation allows.

The report also says that the Government should make an ‘uprating guarantee’ to increase benefits annually, based on, for example, prices. It would be required to set out its reasoning to Parliament if it decided to deviate from this guarantee.

On the Household Support Fund, the Committee welcomes the extension announced in Spring Budget 2024. The report says that it should become a permanent feature of the social security system to improve the ability of local authorities to plan their provision of discretionary support to households.

Rt Hon Sir Stephen Timms MP, Chair of the Work and Pensions Committee, said: “It is right that our benefit system incentivises work, but it should also provide an effective safety net for jobseekers, people on low incomes, carers and those with disabilities.

“We have heard plenty of evidence that benefits are currently at a level that leaves many unable to afford daily essentials or meet the unavoidable extra costs associated with having a health impairment or disability.

“The Government has previously said that it is not possible to come up with an objective way of deciding what benefits should be. Our recommendations are a response to that challenge, and the ball is now back in the Government’s court.

“On top of acknowledging and acting on a new benchmark and objectives linked to living costs, Ministers should commit to consistent uprating of benefits each year. It is time to end the annual ‘will they or won’t they’ speculation and all the worry that brings to those who rely on the social security system for financial support.

“The Household Support Fund has provided a vital layer of additional support for households during the cost of living crisis.

“The Government should build on the extension announced in the Budget, and make it a permanent part of the social security system to allow councils to continue to reach those in their local areas who most need help.”

A full list of the Committee’s conclusions and recommendations is available on P74 of the report. The Report is also available in British Sign Language, audio and EasyRead formats.

Benefits health assessments system continues to let people down, say MPs

The health assessments system to access vital benefits for those who cannot work or face extra costs due to disability or ill-health continues to let down those who rely on it, according to Westminster’s Work and Pensions Committee.

In its latest Report, the Committee calls for the implementation of several measures that would be relatively quick and easy wins to improve trust, drive down the high rate of decisions reversed on appeal and reduce waiting times.

It says assessments should be recorded by default, with claimants having the option to opt-out, adding that footage could be used to review cases more accurately without having to go to appeal, and help assessors learn from past mistakes.

Some of the improvements the Committee suggest could drive down the high rate of decisions reversed on appeal, which still stands at 69% for Personal Independence Payment (PIP). Although the Work Capability Assessment used for Universal Credit and Employment and Support Allowance is due to be abolished, it will remain in place until at least 2026. Meanwhile, PIP assessments will continue, so retaining the status quo is not an option.

MPs on the Committee also recommended allowing claimants to choose between remote or in-person assessments, extending the deadline to return forms, targets to reduce assessment waiting times, and payments to people who have been forced to wait beyond the new targets.

The predecessor Committee originally published a report on significant problems in assessments in 2018, but many of the recommended changes have not been made.

Committee Chair Sir Stephen Timms MP said: ““We surveyed eight and a half thousand people as part of our inquiry and found a profound lack of trust in the system as a consistent theme.

“Many will welcome abolition of the Work Capability Assessment. The Government’s process improvements, and recognition that the system causes undue stress and hardship, are steps in the right direction.

“However, waiting years for changes won’t cut it when quicker wins are available: flexibility of choice on assessment by phone or face-to-face; recording assessments by default; extending deadlines to reduce stress; and sending claimants their reports. All this will give much-needed transparency to a process that so few trust yet affects their lives so fundamentally.

“All efforts must be made for unnecessary limbo and stress for claimants to be put to an end.”

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Scotland to ban combustible cladding

Materials barred from high-risk buildings over 11 metres

Legislation to improve fire safety and boost Scotland’s Net Zero ambitions has been laid before the Scottish Parliament.

Under the legislation, developers will be banned from using combustible cladding on high-rise buildings. Since 2005, new cladding systems on high rise blocks of flats have either had to use non-combustible materials or pass a large-scale fire test.

The building standards legislation removes the option of a fire test, completely prohibiting such materials from use on domestic and other high-risk buildings, such as care homes and hospitals, above 11m.

The highest risk metal composite cladding material will be banned from any new building of any height, with replacement cladding also required to meet the new standards.

The legislation also includes improvements to energy performance standards, aiming to make buildings easier to heat while ensuring they are well ventilated and comfortable to live in.

Building Standards Minister Patrick Harvie said: “This is the third set of changes made to fire safety standards for cladding in Scotland since the tragic Grenfell Tower Fire, requiring any cladding on domestic or other high risk buildings above 11m to be strictly non-combustible.

“Taken together with our new fire alarms regulations, covering all homes in Scotland regardless of ownership, this is yet another step on the Scottish Government’s mission to minimise the risk of deaths and injuries from fire.

“The energy improvements will deliver another important step toward improved energy and emission performance of our buildings, and we’ll be going further on this in 2024 with regulations requiring new buildings to use zero-emissions heating systems.”

The Building (Scotland) Amendment Regulations 2022 (legislation.gov.uk)

Changes to requirements on fire safety of cladding systems will be introduced on 1 June 2022, while improvements to energy and environmental standards will apply from 1 October 2022.

The changes have been brought in following public consultations in 2021 on the fire safety of cladding systems and on energy and environmental standards.

Supporting Technical Handbooks, which set out the full detail of changes, will be published from the start of May.

The combustible cladding ban will apply to all buildings with a storey 11m or more above the ground, and which contain:

a dwelling
a building used as a place of assembly
or as a place of entertainment or recreation
a hospital
a residential care building or sheltered housing complex or a shared multi-occupancy residential building.

MPs back TUC’s calls for asbestos removal from public buildings

On Thursday, MPs backed calls from the TUC for all asbestos to be removed from public and commercial buildings.

Westminster’s Work and Pensions Select Committee published a report from its inquiry into asbestos management in which it cites TUC calls for stronger asbestos removal.

Asbestos remains the biggest cause of work-related deaths in the UK according to the Health and Safety Executive (HSE), with 5,000 deaths recorded in 2019. And Britain has the highest rates of mesothelioma cases in the world.

Asbestos is classed as carcinogenic, which means it can cause cancer and other serious lung conditions when fibres are inhaled.

According to figures from the HSE asbestos is still found in around 300,000 non-domestic buildings despite a ban on the use of the substance in new buildings in 1999.

Committee report

The new report by MPs cites concerns that the likely dramatic increase in retrofitting of buildings in response to net zero ambitions means that more asbestos-containing material will be disturbed in the coming decades.

The TUC says current asbestos management is not fit for purpose and has long called for new legislation requiring removal of all asbestos from public buildings.

Today MPs have called for a 40-year deadline to remove all asbestos from public and commercial buildings. The TUC welcomes the news but says a 40-year deadline is not ambitious enough.

The report also calls for more funding for the HSE to support this increased programme of work.

Asbestos dangers

There is no safe threshold of exposure to asbestos fibres – inhalation even of small quantities can lead to mesothelioma decades after exposure.

This means that where asbestos is still present, it is not safe to assume there will be no disturbances that put working people in danger.

The only way we will eradicate mesothelioma in Britain is with a legal duty to safely remove asbestos, and a clear timetable for its eradication. Only then can we ensure that future generations will not have to experience the same deadly epidemic from asbestos-related diseases that we suffer today.

TUC General Secretary Frances O’Grady said: “Everyone should be safe at work. Asbestos exposure at work continues to cause thousands of deaths every year. Asbestos is still with us in workplaces and public buildings across the country. As a result, more than 22 years after the use of asbestos was banned, hundreds of thousands of workers are still put at risk of exposure every day.

“The only way to protect today’s workers and future generations is through the safe removal of asbestos from all workplaces and public buildings.

“Today’s report by MPs is welcome, but a 40-year deadline isn’t ambitious enough: hundreds of thousands of workers risk dangerous exposure in that time. Ministers must commit to removing all asbestos to keep future generations safe.”

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Concern over delays to Workplace Capability Assessments

The Work and Pensions Committee Chair Stephen Timms has written to Minister for Disabled People Justin Tomlinson asking what action the Government is taking to address delays to Workplace Capability Assessments (WCA).

The letter raises concerns about the ‘exceptionally long waits for assessments’ some people applying for Employment Support Allowance (ESA) and Universal Credit have been experiencing since the start of the coronavirus pandemic and the suspension of face-to-face assessments more than a year ago.

This affects people who DWP has decided cannot have their claims assessed on paper or by telephone.

Previous correspondence from the Minister failed to answer the Committee’s specific questions on the number of people affected, waiting times and the reasons behind the lack of progress on conducting remote assessments for these claimants.

Rt Hon Stephen Timms, Chair of the Work and Pensions Committee, said: “DWP has left some disabled people in an impossible situation: they can’t have a face-to-face assessment, while they are also told a decision on their claim can’t be made over the phone.

“Instead, they’ve simply been left in limbo, forced to get by on less money than they are entitled to, in some cases for more than a year—at a time when we know living costs have been higher than ever for disabled people. So far, the Minister hasn’t even told us how many people have been affected.

“We all know that DWP has been under enormous pressure this year. But there has been a disappointing lack of urgency in addressing this problem. It’s high time the Government fixed this.”

Crack down on tech firms ‘immoral’ profiting from online pension scam adverts, urge MPs

A report from Westminster’s Work and Pensions Committee is calling on the UK Government to ‘act quickly and decisively’ to protect pension savers, more than five years on from the introduction of the pension freedoms, which have put people at risk of a much wider range of scams and fraud.

The report warns that commonly cited figures of the scale of pension scamming are likely to substantially underestimate the problem.

The situation is likely to be getting worse rather than better, with the covid-19 pandemic offering scammers new opportunities.

The Committee heard throughout its inquiry that pension scammers have moved online, with regulators powerless to hold search engines and social media to account for hosting scam adverts as they do traditional media.

Tech firms such as Google are accepting payment to advertise scams and then further payments from regulators to publish warnings – a practice the Committee describes as ‘immoral’.

The Government must now rethink its decision to exclude financial harms from the forthcoming Online Safety Bill and use it to legislate against online investment fraud.

In the same way as traditional media, online publishers should be required to ensure financial promotions are authorised.

The report also calls for the multi-agency task force set up to tackle pension fraud to be strengthened.

The existing Project Bloom should be renamed the Pension Scams Centre and given dedicated funding and staffing to manage an intelligence database and law enforcement.

Currently the fragmentation of reporting, investigation and enforcement has made tackling pension scams more difficult.

The Financial Conduct Authority must also ‘raise its game’ and publish information about its enforcement action, with the Committee hearing numerous criticisms that it is not effective in stopping scams, punishing scammers or retrieving scam proceeds.

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “The pension freedoms brought more choice for savers on how to use their pension pots, but the reforms have also opened up a whole new world of opportunity for scammers and fraudsters.

“At the same time, a woeful lack of online regulation has helped them reach more people than ever before.

“The result is an online free for all, where scammers can advertise with impunity while the tech giants line their pockets from the proceeds of their crimes.

“With global firms such as Google being increasingly influential as providers of information, consumers looking for financial advice are being let down by not being afforded the same level of protection they receive from adverts which appear on television or in a newspaper.

“There must now be parity across the media to ensure all adverts are regulated and the Government should use its Online Safety Bill to act.

“Tighter online regulation must be just the first step in improving protections for savers. Stronger enforcement with a new Pensions Scams Centre, a more effective FCA and extra support for victims are also desperately needed.

“Pension scams can cause huge financial harm and psychological distress and any one of us saving for the future is at risk of falling prey to a scammer.

“The Government and the regulators have been left playing catch-up following the pension freedom reforms and must now act quickly to protect savers and their hard-earned money.”

Rocio Concha, Director of Policy and Advocacy at Which?, said: “This report is a damning indictment of the approach of tech giants like Google to tackling scams.

“These companies have some of the most sophisticated technology in the world, yet they are failing to utilise it to prevent scammers from abusing the platforms by using fake and fraudulent content on an industrial scale to target victims and devastate lives.

“The case for including scams in the Online Safety Bill is overwhelming. Online platforms must be given a legal responsibility to identify, prevent and remove fake and fraudulent content from appearing on their sites and give their users the protection they deserve. The government must not miss the opportunity to act now.”

Universal Credit £20 weekly increase must be extended, says Westminster committee

The Chancellor must maintain for another year ‘at the very least’ the £20 per week increase in Universal Credit (UC) and Working Tax Credit introduced to support families during the coronavirus pandemic, MPs say today.

Work and Pensions Committee calls for year-long extension of increase ‘at the very least’
Removal in April while pandemic still being felt would plunge hundreds of thousands of families into poverty
Any plans to replace rise with one-off payments must be abandoned amid concerns over fraud and impact on vulnerable

The report from the Work and Pensions Committee notes that since March the number of people claiming UC has doubled to around six million, while job vacancies remain far below pre-pandemic levels.

It warns that removing the payment as planned in April, while the effects of the pandemic are still being felt, would ‘plunge hundreds of thousands of households, including children into poverty’ while dragging those already in poverty ‘down into destitution’.

While the Committee recognises that continuing with the increase would come at a ‘substantial cost’, the Committee argues that this should be seen in the context of the Treasury’s own £280bn figure for total spending on coronavirus support measures this year. The Joseph Rowntree Foundation has estimated that keeping the £20 rise would cost around £6.4bn in the next financial year.

The report also calls on the Government to abandon any plans for one-off payments to replace the weekly rise. The Secretary of State confirmed to the Committee last week that the DWP had been asked to investigate such an option but said it was not ‘one of the Department’s preferred approaches to providing that financial support’.

The report has been published after evidence sessions with frontline support organisations and policy experts and the Secretary of State and Permanent Secretary last week.

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “Removing the extra payment in March would represent a failure by Government – failure to recognise the reality of people struggling.

“Without regular support, hundreds of thousands of families will be swept into poverty or even destitution. Government must end the uncertainty and commit to extending this lifeline.

“The Chancellor faces difficult decisions about the public finances. He may find it hard at present to make the increase permanent. But the pandemic’s impact on the economy and livelihoods will, sadly, be with us for some time. An extension for a year should be the bare minimum.

“We must also hope that Rishi Sunak will listen to the groundswell of arguments against one-off payments as an alternative, including from his cabinet colleague at our Committee last week. There is broad agreement that a steady income is necessary to support people.”

Report findings and recommendations

Impact of removing the £20 per week increase (Chapter 2)

Analysis by the Joseph Rowntree Foundation (JRF) has concluded that withdrawing the temporary increase ‘will risk sweeping 700,000 more people, including 300,000 more children, into poverty’

One-off payments (Chapter 3)

The Committee shares the Secretary of State’s view that a steady income is the best way to support people and is concerned that one-off payments could increase the risk of fraud and about the risks to vulnerable people.

The proposed way forward (Chapter 4)

The Committee has previously called on the Government to make the £20 per week increase permanent with annual inflation-based increases. The report acknowledges however that ‘in the short term, the Chancellor faces some very difficult decisions about the public finances amid a great deal of uncertainty about the future.’
If the Chancellor cannot yet commit to making the increase permanent, he should at the very least extend it for a further 12 months. The Government should then announce its future plans for the rate of Universal Credit no later than the Autumn Statement 2021, to give claimants enough time to plan and budget.

MPs call for starter payments to provide financial support during wait for first Universal Credit payment

A starter payment should be made to people claiming Universal Credit (UC) for the first time to ensure that everyone has enough money for basics such as food and heating during the wait for their initial monthly payment, the Work and Pensions Committee says.

The Committee’s report on Universal Credit: the wait for a first payment finds that the current wait of at least five weeks causes difficulties for some households. While the existing system of Advance pay-ments for those in need can provide a valuable financial lifeline, the Committee is concerned that some people are unable to afford the required repayments.

The Committee warns that this leaves people with a difficult choice: five weeks with no income, or the risk of debt and hardship later.

The report concludes that the introduction of a new payment – equivalent to three weeks of the standard allowance – would be a simple way of ensuring that new claimants had the money they needed for basic living essentials. For people moving from existing benefits, DWP should make the move seamless wherever possible—and pay a starter payment in other cases.

Advances should still be available for people who need further support to get by, but they should be renamed ‘new claim loans’ to make clear that they will need to be repaid. The DWP should also recognise that a request for a loan is a clear indication that someone is struggling and offer support as early as possible.

Reflecting evidence from Sir Iain Duncan Smith, among others, the Committee has also called for changes to the way that historic tax credit is clawed back from people when they move to Universal Credit—and for DWP’s debt collection to follow best practice in the private sector.

In addition, the Committee calls on the Government to make permanent the £20 per week increase in the standard UC allowance announced in response to the coronavirus pandemic.

Rt Hon Stephen Timms, Chair of the Work and Pensions Committee, said: “There is a growing body of evidence that moving to Universal Credit leaves many reliant on food banks, falling seriously behind with their rent, and even experiencing increased levels of psychological distress.

“The Government’s response is that there is no proof that Universal Credit—and in particular the wait for a first payment—is the direct cause of those difficulties. So DWP needs to commission research, and quickly, to find out what lies behind these deeply worrying findings.

“Our social security system should not be leaving people without the money they need for food and heating.

“In the meantime, the Government must face up to the fact that its current system of Advance loans simply isn’t working. They leave people facing the toughest of choices: go without income for at least five weeks, or have repayments subtracted from their future UC payments—which are already barely enough to get by on.

“We cannot understand why people who are already claiming benefits need to wait for at least five weeks when they move to Universal Credit—especially when nothing in their lives has changed. Their move should be seamless.

“For people claiming benefits for the first time, or people who’ve faced a significant change in their circumstances, the Government should provide starter payments. Doing so would both cut down on the need for Advance loans and ensure that nobody is forced into debt just to be able to afford to eat and keep a roof over their heads.

“UC is a highly automated system. That has been a real strength over the last few months, with the huge influx of new claims caused by the coronavirus pandemic. But it can also be a major weakness, leaving people without the tailored support they need, and Ministers unable to make the changes they want to see.

“There is much the Government can do without completely dismantling the UC system: we hope that our proposals, taken together, offer practical solutions for making Universal Credit work for everyone who needs it.”

Key report findings and recommendations

Starter payments

All first-time claimants of UC should receive a starter payment equivalent to three weeks of the Standard Allowance.
The payment should be made two weeks after the initial claim and only once the claimant’s identity has been verified, to guard against fraud.
People claiming legacy benefits should be moved seamlessly to UC, but where they cannot be they should receive a starter payment instead.

The impact of the wait

The Committee received evidence from both organisations and individuals which suggested that a significant proportion of people face financial difficulties during the wait for a first UC payment.
Citizens Advice said that half the people it helps during the wait period are ‘unable to keep up with bills, rent or are forced to go without the essentials such as food and heating’.
The National Audit Office said that the wait for a first payment can exacerbate claimants’ debt and financial difficulties.
DWP must carry out research to develop its understanding of the possible impact of UC, particularly the wait for the first payment, on the use of food banks; on claimants’ levels of rent arrears; and on levels of psychological distress.

Advance payments

Even with starter payments, the Committee anticipates some people claiming will still need to ask for an Advance (a loan to tide them over during the wait).
The DWP risks misleading claimants, and damaging its own credibility, if it insists on denying the obvious fact that these Advances are interest free loans.
Advances should be renamed ‘new claim loans’ so it is clear that they need to be repaid.
The Department should offer support to anyone requesting a substantial Advance, as it would be a clear indication that someone is struggling with the transition to UC.

Tax credit debt

Repayments of tax credit overpayments can compound hardship for people who may already be struggling.
The Committee recommends that recovery of tax credit debt from people claiming UC should begin only when the claimant has repaid their Advance (if they have taken one out).
Repayments of remaining debts should be capped at 10% of UC standard allowance and written off entirely if they have not been pursued for more than six years.

Universal Support and Help to Claim

The DWP must invest in expanding and developing its Help to Claim service so it is closer to its original plans for Universal Support.
The service must go beyond assisting with an initial claim and should include debt advice, support for people struggling with repaying Advances and support for people with complex needs.

The Work Capability Assessment and support for disabled people

The Committee finds it troubling that, because of the time taken to complete a Work Capability Assessment, some disabled people and people with health conditions must wait much longer than five weeks to receive their full UC entitlement.
Four months, on average, is too long to wait and the DWP must work to speed up the process.

Coronavirus measures

In its report DWP’s response to the coronavirus outbreak, the Committee welcomed the decision to increase the standard allowance in UC and the basic element in Working Tax Credit by £20 per week.
The Government should now extend the increase past April 2021 and make the rise permanent.

Committee seeks answers to Universal Credit questions

The Work and Pensions Committee publishes the Government response to its report DWP’s response to the coronavirus outbreak.

The report, published in June, made a number of recommendations about supporting those claiming Universal Credit, as well as legacy benefits and those with no recourse to public funds due to their immigration status.

It also made recommendations on the HSE and called on the DWP to develop a strategy for dealing with the effects of the economic downturn.

Committee Chair Stephen Timms MP has now written to the Secretary of State Thérèse Coffey MP to press the Department on a number of points not addressed by the Government response.

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, said: “We don’t necessarily expect the Government immediately to accept every recommendation we make. But we do expect that it will at least explain its position. This response to our report leaves many questions unanswered.

“In the course of our inquiry, we heard concerns that the Government’s very welcome increases to some benefit rates would be undermined by the benefit cap. Ministers assured us in April that only a small number of people would be affected. In fact, DWP’s own statistics show that 84,000 households were newly capped between February and May this year.

“The Secretary of State also assured the House in May that she was looking very carefully at what could be done for people who had mistakenly applied for Universal Credit and left themselves worse off as a result. We recommended that the Government act urgently to put this right. It now seems that nothing is going to be done for these people. If that’s the case, the Government should say so clearly, and explain why.

“Just as importantly, there seems to be little acknowledgement of the role of the Department in planning for future pressure on the social security system. There needs to be a firm commitment to analysing how coronavirus has affected levels of poverty and a clear strategy—available for public scrutiny— for coordinating the employment response to the economic downturn.”