Background to the report
The Department for Work & Pensions (the Department) has rolled out Universal Credit to replace six means-tested benefits for working-age households: Jobseeker’s Allowance, Income Support, Housing Benefit, Employment and Support Allowance, Working Tax Credit and Child Tax Credit.
This is our fourth major report on Universal Credit. Previously we focused on the development, management and roll-out of the Universal Credit programme. In this report we focus on one key part of the Universal Credit process: getting to first payment. The initial wait for Universal Credit, officially known as the first assessment period and often referred to as “the five-week wait”, has been the focus of significant scrutiny from Parliamentarians and other stakeholders, such as charities that support claimants.
Content and scope of the report
In this report we:
- explain how the process of getting to first payment works for Universal Credit, and consider its impact on claimants (Part One);
- assess the Department’s performance in paying first payments on time, cost-efficiently and without fraud and error, in the period before COVID-19 (Part Two); and
- assess whether the Department supports claimants effectively through the initial claim process (Part Three).
We undertook the majority of our fieldwork for this report between November 2019 and February 2020. This report sets out what the Department was doing well in managing the process of getting to first payment, and where it had room to improve, before the COVID-19 pandemic. It does not cover the impact of COVID-19 on Universal Credit, or the Department’s management of the crisis.
Many people claim Universal Credit at a challenging time in their lives. As such, the initial wait, which is an inherent part of Universal Credit’s design and operational processes, does not cause all the issues that claimants may face but, in the context of many claimants’ existing financial difficulties, can exacerbate their problems.
Since we last reported, the Department has improved the proportion of people getting their first Universal Credit payment on time and in full to around 90%. It deserves credit for its organised approach to making changes and its improved performance. Although the cost of administering each claim is still higher than expected, the Department has demonstrated an ability to gradually make Universal Credit claims more cost-efficient by automating and improving processes. It needs to demonstrate a similar determination to tackle the high levels of fraud and error.
The Department has succeeded in improving payment timeliness so far by improving processes that affect large numbers of people. However, as the Universal Credit caseload has grown, a large number of people still do not receive their full payment on time. Vulnerable people may be particularly likely to struggle with their claim. The Department needs to better understand and address the needs of vulnerable people and those with more complex claims, who may be at greater risk of struggling under the Universal Credit regime.