Universal Credit welfare that works Welfare to work

Universal Credit: welfare that works Welfare to work convention Paul Kilner Universal Credit Directorate 1 st July 2011

“ Universal Credit will mean that people will be consistently and transparently better off for each hour they work and every pound they earn. It will cut through the complexity of the existing benefit system to make it easier for people to get the help they need, when they need it. By utilising tried and proven information technology, we will streamline the system to reduce administration costs and minimise opportunities for error or fraud. ” Iain Duncan Smith, Universal Credit: Welfare that Works, November 2010 2 Department for Work and Pensions

I am going talk about … • Universal Credit vision & aims • Making work pay • The scope of the programme and implementation plan • A new journey for our customers • Update on progress. 3 Department for Work and Pensions

What is Universal Credit? • An in-work and out of work simplified credit that will ensure people are better off in work • The biggest change to the welfare system for 50 years • A change in cultural attitudes to work. 4 Department for Work and Pensions

Universal Credit Vision • Reducing workless households • Helping to end child and adult poverty • A simplified welfare system for claimants and taxpayers that they can be confident in. 5 Department for Work and Pensions

The current system does not work • Encourages dependency, discourages work • Complex and bureaucratic • Expensive to administer. 6 Department for Work and Pensions

Universal Credit aims (1) • Universal Credit simplifies our outdated and complex benefit system • Universal Credit will support those who need it most, and ask those who can work, to return to employment • You will be able to work more hours without losing your benefit all at once (making work pay) • Universal Credit will reduce workless households and moves children out of poverty. 7 Department for Work and Pensions

Universal Credit aims (2) • Multiple benefits will become one single household payment • You can claim universal when it suits you. Online 24/7 with help available if you need it • Universal Credit is simple to understand administer, it will reduce Fraud & Error • Claimants will need to interact with Government less frequently. 8 Department for Work and Pensions

Making work pay • Complex system puts off claimants from returning to work • Highest Marginal Deduction Rate, reduced from 96% to around 76% • No one worse off. 9 Department for Work and Pensions

Clear work incentives 10 Department for Work and Pensions

Making work pay • It is estimated that around 2. 7 m households will have higher entitlements • Couples with children see the biggest increase in entitlement in cash terms of all family types • Universal Credit will substantially improve the incentives to work • Universal Credit improves the incentives to increase hours of work. 11 Department for Work and Pensions

Cross government impacts • Delivered by DWP & HMRC • Local Authorities have a key role to play • Engagement with key stakeholders is essential. 12 Department for Work and Pensions

Programme scope Universal Credit ‘in scope’: Out of scope: • Income related Jobseeker’s Allowance • Disability Living Allowance • Income related Employment and Support Allowance • Contributory Benefits • Income Support (including SMI) • Carer’s Allowance • Child Tax Credits • Working Tax Credits • Housing Benefit • Social Fund (budgeting loan elements) 13 • Child Benefit • Council Tax Benefit localised • Contributory Benefits ESA & JSA Department for Work and Pensions

Implementation plans… Feb ‘ 11 Apr ‘ 13 Oct ‘ 13 Apr ‘ 14 Oct ‘ 15 Oct ‘ 17 Oct ‘ 16 New claims from out of work customers New claims from in work customers Agile Design/ Build/ Test Natural transitions due to change of circs (mainly JSA) Managed transitions (mainly other benefits) Legacy load 2. 5 m 4. 5 m 6 m 8 m UC load JSA, ESA, IS, HB, WTC, CTC 14 Department for Work and Pensions

Claimant Journey Identify yourself Provide info about you & your needs Medical evidence provided Selfemployment Your entitlement assessed Conditionality explained Childcare supported 15 Live earnings data, to inform payment levels Payments begin, going up or down depending on earnings Department for Work and Pensions

What it means for our claimants • One delivery organisation • On-line • Household claims • Monthly payment • Personalised claimant commitment. 16 Department for Work and Pensions

Are DWP claimants moving online? Internet usage among working age DWP claimants within the scope of Universal Credit Medium to High 17 Low No usage Department for Work and Pensions

The challenge for our people • Universal credit will demand very different staff roles and skills 1. Much less process 2. Much less admonition 3. Much less straightforward work 4. Much less single customer group expertise. 18 Department for Work and Pensions

An update on progress • The Welfare Reform bill is currently in the Lords • Tom & Jack examples have been worked through • We are consulting stakeholders on childcare proposals. 19 Department for Work and Pensions

Policy issues still being considered • • • 20 Conditionality threshold Detailed rules on self employed Child care Passported benefits Transitional protection. Department for Work and Pensions

Contact details Paul Kilner Senior Relationship Manager | Business Change & Implementation | Universal Credit Directorate | Department for Work and Pensions Email: paul. kilner@dwp. gsi. gov. uk 21 Department for Work and Pensions