Universal Credit: where are we now?

Universal Credit (UC) is a new benefit which is replacing means-tested social security benefits and tax credits for working-age individuals and families.

Its roll out has been the source of controversy in recent months, with the chair of the Work and Pensions Committee Frank Field accusing the Government of having “its head in the sand” regarding “a growing body of evidence about the very real hardship the rollout of Universal Credit is creating for some”.

This Wednesday saw a notable addition to the body of evidence to analyse UC’s progress and potential impact.

DWP published, for the first time, household level data, detailing the family circumstances of claimants in receipt of UC, whether or not they are receiving support for housing and how these patterns vary across Great Britain.

Universal Credit

Universal Credit (UC) is a new benefit which is replacing Child and Working Tax Credits, Housing Benefit, income-related Employment Support Allowance, income-related Jobseeker’s Allowance and Income Support.

The aim is to simplify and streamline the benefits system, improve work incentives, tackle poverty among low income families, and reduce the scope for error and fraud.

Universal Credit was first introduced for a small subset of new claimants in certain areas in 2013, and is gradually being rolled-out to new claimant groups.

The benefit is not expected to be fully implemented until 2022. Section 2 of the Library briefing paper Universal Credit changes from April 2016 provides background to how the UC roll out schedule has changed and DWP’s current operations.

The “Live” service and “Full” service

DWP is currently administering Universal Credit via two systems, the “live” service and the “full” service. Which service is in place in an area should not affect a claimant’s award, but might affect how they claim and how DWP processes their award each month.

The Universal Credit “live” service operates using IT systems developed by DWP prior to the reset of the UC programme in 2013. The vast majority of Jobcentres Plus offices in Great Britain are currently operating the UC live service.

“Gateway” conditions remain in place in most live service areas, meaning only certain types of claimants – usually new, single claimants without children, are able to claim UC. Otherwise, new benefit claimants who do not meet these gateway conditions continue to claim ‘legacy’ means-tested benefits and tax credits.

The Universal Credit “full” service is currently operating in 49 Jobcentre Plus offices in Great Britain and will eventually replace the live service in all areas. In full service areas UC is available to all claimants whose applications and awards, DWP aims, are managed online using the Department’s new digital systems.

275,000 households paid UC in December 2016

275,000 households were in receipt of Universal Credit (UC) in the whole of Great Britain as of December 2016. This makes an average of 435 households per constituency – though in practice, the exact number varies considerably. This estimate – and all figures below – excludes households which are on UC but are not receiving payments.

In comparison, there were on average 6,241 families per constituency receiving child or working tax credits as of December 2016 and 7,200 households per constituency in receipt of Housing Benefit as of November 2016 in Great Britain (though again, the exact number varies between constituencies).

In reality, constituencies differ considerably in the number of households in receipt of Universal Credit. Croydon North reported the highest number of households in payment of UC (3,927), followed by Feltham and Heston (3,250) and Croydon Central (3,177). In contrast, 58 households were paid Universal Credit in North East Hampshire in December 2016.

Out of the top 10 constituencies with the highest number of households in receipt of UC, 8 were constituencies where full service has been already implemented. 5 of those were also pilot areas for implementing the UC full service.

81% of whom were single adult households with no children

On Wednesday the Department for Work and Pensions published new Universal Credit data, shedding light on the characteristics of households claiming Universal Credit. The newly published indicators include family type, entitlement to components of Universal credit (e.g. housing element), and award amounts.

The statistics show that out of 275,000 households in receipt of Universal Credit in December 2016 (excluding households not in receipt of payments), 81% were single households with no child dependant. Couples with or without children comprised 5% of all households claiming UC. The map below shows the number of households claiming Universal Credit by Parliamentary constituency in December 2016.

Map showing the number of households in receipt of UC by constituency, Great Britain

39 out of all 632 constituencies in Great Britain had fewer than 100 households in receipt of Universal Credit. The majority of constituencies (59%) reported numbers lower than 400.

UC claimants exceed 1,000 in 55 constituencies in Great Britain. The North West had the highest number of households claiming UC, unsurprisingly as it was the first area where UC was rolled out to all Jobcentres. In the map above the areas shaded black with over 1,000 households in receipt of UC include full service areas such as Inverness, Croydon, Great Yarmouth and Lancaster.

The maps below show households in receipt of Universal Credit by family type and Parliamentary constituency.

Map showing single adult households with no child dependant in receipt of Universal Credit Map showing single adult households with child dependants in receipt of Universal Credit

The maps further illustrate that the majority of households on UC are “simple” claimants, i.e. single households without children. Very few constituencies had more than 100 single households or couples with children in receipt of UC and Great Yarmouth was the only constituency where more than 100 couples without children claim UC.

49% of claimants are in receipt of support for housing

The housing element in UC replaces Housing Benefit. There are some key differences between them, as the housing element is now administrated by DWP, not local authorities and is paid directly to claimants on a monthly basis.

The newly published data shows that of all households paid UC in December 2016, 49% were entitled to the housing element. The map below shows the number of households on UC entitled to the housing element.

Map showing households in receipt of Universal Credit entitled to the housing element

240 constituencies (38%) in Great Britain had fewer than 100 households paid UC in December 2016 and entitled to housing element and another 221 constituencies reported numbers between 100 and 200 households.

Further information

Library briefing paper on Universal Credit changes from April 2016 provides further background information on Universal Credit and its potential impact.

Picture credit: This is Inverness by mendhak, Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0)