Universal Credit is the biggest and most fundamental reform to the welfare state since its creation. It is a fair, modern benefit, based on the sound principles that work should always pay and those who need support should receive it. It is also fair to taxpayers. In 2010, the welfare bill cost each UK household £8,350. This was an increase of nearly £3,000 per household since 1997. Not only was this system failing to reward work, but it was the taxpayer bearing the burden.
Universal Credit is a simpler, more accurate benefit than the old system it replaces. It is based on up-to-date information so will be able to react more quickly to changes in people’s circumstances and, importantly, will help to make work pay. Benefits provide a vital safety net for the most vulnerable in our society but should not act as a disincentive to work; under the new system, people will no longer be penalised for getting a job or working longer hours.
Universal Credit will help 200,000 more people into work when fully rolled out, and empower people to work an extra 113 million hours a year. You might be interested to know that people on Universal Credit spend around 50 per cent more time looking for a job than they did under the old Job Seekers Allowance (JSA). Since 2010, we have seen over 3.3 million people move into work, which is on average 1,000 people each and every day. Youth unemployment has also plummeted by over 50 per cent.
By merging up to 6 separate benefits into one, Universal Credit simplifies the whole process and reduces the scope for people inadvertently missing out on their full benefit entitlement. This means that 700,000 people will receive on average an extra £285 per month which they have not received under the existing system. Around a million disabled claimants will gain on average £110 a month through Universal Credit, because their award is higher through Universal Credit than legacy benefits.
As part of their 'testing and learning' approach, the Department for Work and Pensions (DWP) has been working closely with stakeholders and other parties to design the best possible process for the migration of people from the old benefits system to Universal Credit. This will include a variety of communication formats including face-to-face, internet and postal notification, to ensure people are aware of the managed migration process. Work Coaches will also be fully prepared to ensure that claimants move smoothly onto Universal Credit.
Draft Regulations will come before Parliament later this year, with the managed migration process starting later in 2019. This will be tested and refined before larger volumes start from 2020 until completion in 2023.
Transitional Protection will be provided for those moved through managed migration. This means that at the point of moving to Universal Credit, people's incomes will be protected. This includes support for around 500,000 people who are eligible for a Severe Disability Premium.
There will be flexibility to extend the transition period for people alongside a process to ensure that staff check for evidence of complex needs or vulnerability or disability before existing benefits are stopped. Furthermore, if someone misses their deadline to make a claim, there are provisions in the draft Regulations for the DWP to back-date their claim.
I will be following the managed migration process closely to ensure that people move smoothly onto the new system, and I will support improvements when necessary.