Universal credit: full steam ahead

 

Simon Osborne describes the latest plans for the roll out of universal credit (UC) and, in particular, the UC ‘full service’.1 This process has already started: see, for example, provisions in SI 2016 No.33 and SI 2016 No.407.

UC has already been introduced for new claimants who satisfy ‘gateway’ conditions. This was due to have been completed nationwide by April. But 2016 also sees the start of a major phase of the introduction of UC for all new claimants (there is no current evidence that is affected by the resignation of Iain Duncan Smith as Secretary of State). The mechanism for this new phase, mainly beginning in May, is the national roll-out of the UC ‘full service’. A crucial difference between the UC full service and UC in the gateway areas is that the full service has no gateway conditions. So in a full service area a new claimant, in effect, comes under UC arrangements merely by living in such an area.

The roll-out of the UC full service, therefore, has major consequences for anyone making a new claim from 2016. Some current claimants will also be affected, should a change of circumstance prompt them to make a new claim for ‘legacy’ benefits or tax credits, which are replaced by UC – ie, income support, income-related employment and support allowance (ESA), income-based jobseeker’s allowance (JSA), housing benefit (HB), child tax credit (CTC) and working tax credit.

The official plan now is that UC will be rolled out to all new claimants (ie, with no gateway conditions) between 2016 and June 2018.2 ‘Universal credit and Local Authorities’, Written Statement, House of Commons Hansard, col 63WS, 10 December 2015

When that process is complete, the official ‘migration’ of current claims of legacy benefits and tax credits is due to take place between 2018 and 2021.

The roll-out is to be achieved by the extension of the UC full service. Until recently, this has been restricted to a few areas in southern England. The main activity will begin in May (there has been an expansion to further postcode areas in south London, Great Yarmouth and Musselburgh in March and April3 See SI 2016 No.407).

There is no plan further to extend the UC gateway areas (sometimes referred to as the UC ‘live service’). In fact, gateway areas will gradually be converted to full service areas – ie, by the removal of gateway conditions. So UC is to be extended in a way that will involve significantly larger numbers of new claimants, as none will be excluded by gateway conditions.

In law, UC full service areas are introduced by the publication ofa relevant Commencement Order.4 At time of writing, the most recent example was SI 2016 No.407. In practice, it is expected that (as with gateway areas) individual Commencement Orders will introduce new UC full service areas in tranches and by reference to postcode areas. The DWP has published a Transition Rollout Schedule – Phases 1 and 2: May to December 2016,5 Available at

The UC full service is the way in which the DWP delivers UC with full concentration on digital methods (hence it was formerly referred to – including in legislation – as the ‘digital service’). Not only are claims made online, but the majority of communication is via an online UC account, with communication made by entries there, by email or text and not by letter.

Claimants may still have varying levels of face-to-face contact, depending on the conditionality being applied to them and on individual need. The DWP says that support for those who find digital communication difficult and have other ‘complex’ needs will be provided locally in partnership with local authorities and private and voluntary sector ‘partners’ (under arrangements referred to as ‘Universal Credit Delivered Locally’).

But perhaps the most significant aspect of the full service, at least in the roll-out phase, is that it has no gateway conditions. Legally, the only requirement for a new claimant to be affected is that s/he ‘resides in’ a designated UC area. So, a new claimant is no longer barred by failing to meet one or more gateway conditions – eg, by having a current entitlement to a legacy benefit or tax credit, having limited capability for work, being a student, getting personal independence payment or by not being a British citizen.

Most other UC rules are standard – ie, the same as in UC gateway areas. There are differences (mainly minor, but the individual case is all) in areas like reporting of childcare costs, assessment periods when a couple form or split up and the calculation of new awards. The UC ‘six-month’ rule, under which a claimant not entitled to UC because of excess earnings remains a UC ‘claimant’ for six months (and so unable to make a new claim for legacy benefits or tax credits), does not apply in the full service. But that is only because in a full service area a new claim for those cannot be made in any case.

When an area becomes a UC full service area, as there are no gateway conditions, any new claim for UC results in the UC rules being applied. This has obvious consequences for new claimants. Even if they do not actually claim UC, rules prevent new claims for legacy benefits or tax credits being made in UC areas (even if they would be entitled). So new claimants are effectively obliged to claim UC. As in other UC areas, entitlement to UC means any entitlement to a legacy benefit or tax credit cannot begin or continue. Reg 5 Universal Credit (Transitional Provisions) Regulations 2014 No.1230; separately, income-based JSA and income-related ESA are abolished for affected claimants under separate provisions at Article 4 of The Welfare Reform Act 2012 (Commencement No.9 and Transitional and Transitory Provisions and Commencement No.8 and Savings and Transitional Provisions (Amendment)) Order 2013 No.983 (‘the No.9 Order’); and similar provisions in individual Commencement Orders introducing full service areas (see, for example, Article 4 of SI 2016 No.33).

As all new claimants are affected, some issues already arising with legacy benefits will arise in arise in a UC context for the first time – such as the work capability assessment, conditionality and sanctions and the right to reside test (European nationals will be making UC claims in full service areas).

For the time being, current claimants of legacy benefits and tax credits are not automatically affected when their area becomes a UC full service area. Official migration of such current claims is not due to begin until 2018.

However, current claimants who (usually following a change of circumstances) are prompted to make a new claim for another legacy benefit or tax credit (as well, of course, as for UC itself) will be affected.

So, for example, a current claimant of income-based JSA and HB who has a child and attempts to claim CTC will be unable to do so if s/he lives in a UC full service area. Should s/he then claim and get UC, her/his income-based JSA and HB will also end.

Another likely example is where entitlement to ESA is lost following failure of the work capability assessment, and the claimant decides to make a new claim for JSA pending mandatory reconsideration. This triggers the abolition of both income-based JSA and income-related ESA for the claimant. This outcome is inevitable in a full service area (in UC gateway areas, one of the gateway conditions means that outcome is avoided where the claimant has already requested mandatory reconsideration before the new claim for JSA is made, or is already pursuing an appeal). Once income-related ESA is abolished, it is not available pending appeal (although contributory ESA could still be paid). UC would be available pending appeal but, as seen above, entitlement to UC results in the complete loss of any entitlementto any other legacy benefits andtax credits. ESA pending appeal itself is awarded without there being the need for a claim, so should not in itself be treated as a new claim for ESA.9 Reg 3(1)(j) Social Security (Claims and Payments) Regulations 1987 No.1968

Jim lives in a UC full service area. He was getting income-related ESA, but that stops when he fails the work capability assessment. Jim requests a revision of the decision and decides to make a new claim for income-based JSA in the meantime. This means that Jim now comes under the UC system. Both income-based JSA and income-related ESA are abolished in his case. From this point on, Jim can get UC, but not income-related ESA, even under the rules aboutgetting ESA pendinganappeal. Jim's appeal against the work capability assessment is eventually successful, but he remains on UC and does not go back to income-related ESA.

If Jim does not live in a UC full service area, in the example above he would not come under the UC system, as long as he has already requested a revision of his ESA decision at the point he decides to make a new claim for income-based JSA. That is because in UC areas that have not yet become full service areas, gateway conditions apply, and one of the gateway conditions is that the claimant no be already entitled to ESA or awaiting the outcome of a revision or appeal about not being entitled to ESA.

These are not the only likely examples. There is, therefore, likely to be some ‘natural migration’ to UC from legacy benefits to UC even before the official migration begins in 2018.

Finally, what of the UC ‘lobster pot’? This term is usually applied in UC gateway areas where, while entitled to UC, a claimant who has a change of circumstance that means s/he no longer satisfies the gateway conditions (eg, having limited capability for work) nevertheless remains entitled to UC. S/he has already passed through the gateway and does not need to do so again while still entitled to UC. In such situations, it seems that a claimant could potentially return to legacy benefits and tax credits by ending the UC claim (ie, giving notice that s/he no longer wishes to get UC), so that s/he then becomes a new claimant, no longer subject to the ‘lobster pot’, and now no longer satisfies the gateway conditions.10 It is understood that the DWP has accepted such notices.Nevertheless, claimants should first take advice about things like their entitlement to legacy benefits or tax credits, in particular compared to entitlement on UC, and likely gaps in payment of benefit.

But in the UC full service areas, the complete absence of a gateway means this will not apply. A claimant in such an area who gives up UC entitlement will still be caught by the bar on making a new claim for a legacy benefit or tax credit, will not have to satisfy any gateway conditions for UC, and so in effect is obliged to reclaim UC. In short, the ‘lobster pot’ may be said to apply in the full service areas in an even more powerful and effective way than it does in the gateway areas.

Please be aware that welfare rights law and guidance change frequently. Older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.