HC 576 Progress towards the implementation of Universal Credit

Written evidence submitted Simon Community NI

Simon Community NI is pleased to respond to the Work and Pensions Select Committee inquiry into progress towards implementation of Universal Credit.

About Simon Community NI

Simon Community NI is one of the leading homeless charities in Northern Ireland. We are committed to our vision of ‘ending homelessness’ and provide accommodation, advice and community support for individuals and families who are threatened with homelessness or who experience homelessness. We recognise that addressing homelessness involves more than providing accommodation and we have developed a range of services to meet other needs associated with being homeless including: Rent and Deposit Bond Scheme, Harm Reduction Service, Homelessness Prevention Programme, a Client Representative Project and Freephone Helpline; a 24/7 helpline providing advice and support to those who are homeless or a risk of becoming homeless.

Simon Community NI supports the principles of Universal Credit to simplify the benefit system and make work pay with the gradual withdrawal of benefits when a claimant moves into work. We are concerned however, about the accumulative effect of these changes given that the draft Universal Credit regulations do not include sufficient safeguards to protect the most vulnerable within society.

The Northern Ireland Context

Northern Ireland presents specific circumstances with regards to welfare reform. In particular, Housing Benefit arrangements in Northern Ireland differ notably from those in Great Britain, for example;

(a) there is no equivalent to Rent Officers; instead all arrangements are made by the Northern Ireland Housing Executive, and

(b) Local Housing Allowance (LHA) is administered differently with the continuation of direct benefit payments to landlords where the tenant so chooses.

In addition, the recent report by the Centre for Social Justice, ‘Breakthrough Northern Ireland’, illustrated the high impact of mental health problems on the population. [1] The proportion of the population claiming Disability Living Allowance and Incapacity Benefit in Northern Ireland is significantly higher than in Britain. 8.6% of the working age population are receiving Incapacity Benefit compared with 5.2% in Britain.

Supported Housing

We are disappointed that the Universal Credit regulations do not give any indication as to whether supported accommodation will be included under Universal Credit. The uncertainty of this position, at this late stage in the Universal Credit development process, is damaging for the sector as it hinders future planning as how best to support clients under the new system. We would welcome clarification of this matter as soon as possible.

Our response to the inquiry draws on the assumption that all elements of the Universal Credit regulations will apply to our clients while they are in our projects and as they move onto independent accommodation.

Claimant Commitment

The claimant commitment must be signed by both members of a joint couple claim in order to receive Universal Credit payment. We are unconvinced as to the practicality of this condition where there is for example, a disagreement or a breakdown in communication between a couple, thus jeopardizing benefit entitlement for the entire family. We would welcome assurance from the government that there will be an alternative procedure, recognizing situations where one partner does not wish to commit, to enable payment to the member that does sign. The alternative process could, for example, allow the partner committing to receive the single rate and appropriate elements of Universal Credit. The claimant commitment is personal to the claimant and the partners (and children) of a joint claim that commit should not be unduly punished for the actions of others that do not.

Direct Payments

Simon Community NI is concerned that the housing element of Universal Credit will be paid mostly to tenants in place of landlords.. Unlike Great Britain, in Northern Ireland most housing benefit claimants have their payments made directly to the landlord. Direct payments to landlords are vital to the sustainability of many social housing providers and, where rent arrears occur in private and social tenancies.

Ending direct payments for the majority of claimants could lead to increased non payment of rent/mortgage, debt accrual and loss of home. DWP has indicated that there will not be a blanket exemption and direct payments will be decided on a case by case basis. Although the explanatory notes state that the most vulnerable will be excluded, we are concerned about the lack of detail about what factors will determine vulnerability. We would welcome the publication of comprehensive guidance on this matter. In addition, we recommend that at the very least that there should be automatic exemption of supported housing tenants.

Claiming Online

Simon Community NI is unconvinced about the Government’s assumption that the vast majority of claimants will be able to claim Universal Credit and mange their applications on line. We welcome Departmental assurances that there will be face to face communication in certain situations. We believe, however, that there should also be the provision for paper claims and notification where it is deemed appropriate in order to personalise and support the claimant during the claiming process.

In addition, we are concerned about the over reliance on on-lining claiming particularly given the introduction of a new IT system. We would welcome provision for system failures or problems with security software. Such instances could leave claimants completely bereft of benefit payment until the problem is rectified as has occurred in the past. Under Universal Credit such instances could cause severe hardship for families given the amalgamation of payments for housing, children, limited capability to work and jobseeking.

Young people aged 16 and 17

Simon Community NI welcomes the inclusion of young people who are estranged from their families as a group entitled to Universal Credit. The four groups aged 16 and 17 that qualify for Universal Credit are particularly vulnerable.

We support the recognition that 16-17 year olds should face lesser sanctions due to the vulnerabilities associated with the limited circumstances of entitlement to Universal Credit. We believe, however, that existing safeguards and concessions for 16-17 year olds should continue. For example, at present automatic good cause is granted where on the first occasion a young person has acted or failed to act in a way that could lead to a training related sanction.

In addition, there remains a lack of information about conditionality for these groups. Under Income Support young people are required to do 12 hours per week of further education, but there is no detail in the explanatory notes or regulations about how many hours young people will be required to do to avoid conditionality under Universal Credit.

It should also be recognised that some of these young people might have extra needs or facing crises that might make it impossible for them to engage with education, work or training. Additional safeguards must be put in place for such young people.

Awards

We are concerned that a lone parent under 25 will only receive the same standard allowance as a single claimant without children. This appears to be quite a retrograde step as currently lone parents aged 18 or over receive the same personal allowance as single claimants without children aged 25 or over. This will constitute a significant cut in income for lone parents and their children.

Monthly payments

Simon Community NI supports the principle of developing financial capability and developing budgeting skills, especially for young people. We are concerned, however, that moving from fortnightly payments will cause hardship for claimants who experience difficulty budgeting on a monthly basis. In addition, it could result in the loss of safeguards for payments for children and housing costs, where one partner in a couple acts irresponsibly. We would welcome further clarification in the regulations for situations that would allow a variation from default monthly payments.

Housing Element

Housing Benefit is experiencing such radical reform that that it will no longer offer an effective safety net against homelessness in the private rented sectors, and will be eroded even further as it becomes decoupled from market rents through updating by the Consumer Price Index.

We are concerned that the Universal Credit regulations present further cuts to the housing element in Universal Credit. In particular, we do not understand the rationale for reduced earnings disregards for claimants receiving the Universal Credit housing costs. Introducing minimum and maximum disregards will only add complexity to the system and is in direct conflict with the aim of simplification. Lower disregards for those with the housing element will act as disincentive to work. Further clarification of this rule is required, for example, will a claimant’s earnings disregard be upgraded during a dispute about eligibility and then be recoverable if housing costs are restored?

Eligible Service Charges

Whilst we welcome simplification of the eligibility for service charges, we have strong reservations about the new approach to service charges for social housing within the regulations. The new rule retains the conditions for entitlement but restricts the service charges which are limited to services necessary to maintain the fabric of the accommodation , the cleaning of communal areas, and the cleaning of exterior windows if the claimant or his/her family cannot do this. This represents a shift in definition from service charges being ineligible if they are ‘not connected with the provision of adequate accommodation’ to being eligible only if the ‘service necessary to maintain the fabric of the accommodation’. Worryingly, it is difficult to identify as to which services charges will match this description.

As a result, some providers may decide to cut services such as children’s play areas and the maintenance of stairways. Moreover, the consequences of such changes may also affect the financial viability of smaller Social Housing Providers, causing arrears and repossessions and potentially affecting tenants’ health and safety.

Hardship Payments

We are concerned that making hardship payments recoverable will mean that claimants subject to a sanction will continue to receive a reduced rate Universal Credit for months after the sanction period expired as deductions are made for recovery, which will extend the period of financial hardship.

Conclusion

Simon Community NI is pleased to respond this inquiry. We trust you will find our comments helpful. If there is any further way in which we can contribute to the consultation process we would welcome the opportunity to do so.

17 August 2012


[1] Centre for Social Justice, Breakthrough Northern Ireland , September 2010 pg 15

Prepared 7th September 2012