newsletter 1 August

DWP has set out its vision of how managed migration will work and it makes for very interesting reading.

Some highlights:

“a preparation period of around four to six months to be given for individual claimants alerting them to the need to make a claim for UC, warning them that their existing entitlement to legacy benefits would be ending and preparing them for the migration process. Subsequently, a deadline date of at least one month would be set by the Department who would engage with claimants to help them through the process of claiming UC.

If, however, no claim for UC had been made by the deadline date (extended by a possible one month if grounds for backdating could be established), any award of an existing legacy benefit would be terminated. Any subsequent claim for UC would be dealt with in the normal way, but would not have any of the transitional protections available to those who made an in-time claim.

The decision to require people to make a claim for UC rather than simply transfer them had been taken because the Department wanted to make sure that a claimant’s circumstances had been accurately captured at the start of their UC award.

Indeed it was possible that the information held in relation to existing awards of legacy benefits would be insufficient for the Department to make a UC assessment. For example, no information on capital or other benefits received was held in respect of claimants in receipt of tax credits. The information provided in connection with a new claim for UC might also bring out some existing errors where, for example, previous changes of circumstance had not been declared. It would also allow the Department to inform claimants more fully as to what the new UC regime would entail for them, since it was likely to be very different from their existing benefit regime.

Additionally, the Department could not simply assume that all existing claimants would want to claim UC – some form of formal consent from a claimant was needed, and requiring a claim did that. Requiring a claim at the outset which, in terms of the specific question about doing every up-front, also avoided double-handling”.

This is going to be a massive exercise…..getting millions of people to make a brand new claim, provide all the evidence about their personal circumstances, rent and identity from scratch by a set date, get them to accept a stack of new rules, attend the Job Centre for an interviews and so on. They don’t have to do any of this say DWP…..but if they don’t claim or refuse to accept the new “regime” rules and change their mind later then they lose all transitional protection. Ouch! Maintaining transitional protection is going to be vital….for claimants, landlords and local Councils!

With the evidence of the low take up of the new mortgage loan scheme in mind, it is possible to see hundreds of thousands of people not understanding and dropping out of the Welfare State… a huge saving to the treasury. With soaring debt and rent arrears what will they do next? Turn up at the Council offices in overwhelming numbers and demand help perhaps …especially if they have children.

The danger of this change has always been that the costs will end up merely being transferred from Central Government to Local Government….as a number of observers have always pointed out.

Take one example; a self employed person earning about £6,000 per year net and in receipt of Housing Benefit and tax credits at the moment. Under the new scheme they will have to provide monthly earnings information from day one and will get just 6 months grace until they hit the “minimum income floor” rules. This may well have a drastic impact. No tax credits remember…..potentially they may have full rent and Council Tax to pay which in some instances could exceed £6,000 a year. The potential drop in monthly household income will be massive.

No wonder the Social Security Advisory Committee are calling this the biggest change to the Welfare State for decades!