New inquiry: Universal Credit: the wait for a first payment
9 March 2020
Universal Credit has a “baked in” wait for the first payment. After completing all of the stages of their application, claimants must then wait for at least five weeks to receive their award. They can ask for an Advance payment if they need money more urgently, which they then pay back out of their future Universal Credit payments.
Many organisations have concluded that the five week wait for a first Universal Credit payment must be reduced or eliminated entirely. There is, however, a lack of agreement about how this might be most effectively—and affordably—achieved. Some of the options suggested include:
- Scrapping the five week wait for all claimants: for example, by making the Advance non-repayable;
- Offering non-repayable Advances to some claimants: for example, those considered vulnerable;
- Allowing more flexibility for the start of a claim to be backdated;
- Extending run on payments to cover all legacy benefits;
- Substantially reducing the rate at which Advance Payments—the main existing mitigation measure—are paid back, to help claimants better manage their money;
- Paying UC two-weekly, like many legacy benefits, rather than monthly.
The Committee wants to help the Government to better understand the upsides and downsides of these options, and explore other possible solutions.
Chair of the Work and Pensions Committee, Rt Hon Stephen Timms MP, said:
“It’s now widely recognised that the lengthy wait for a first payment of Universal Credit is causing real difficulties for people—so it’s hugely welcome that the Minister is open to looking at how to fix it. The Committee wants to look carefully at all the possible solutions, and work out which are the most practical, affordable, and likely to make a meaningful difference to people’s lives.”
What does the Committee want to hear about?
The Committee would like to hear your views on the following questions about the wait for a first payment of Universal Credit.
You can respond as an individual, a group or an organisation. You don’t need to answer all of the questions. The deadline for sending your views is Friday 17 April 2020.
- To what extent have the mitigations the Government has introduced so far (e.g. Advance payments) helped to reduce the negative impact of the five week wait for UC claimants?
a. What problems do claimants still experience during the five week wait?
- What is the best way of offsetting the impact of the five week wait?
a. Is it possible to estimate how much this would cost the Department?
b. Is it possible to estimate any costs or savings to third parties (for example, support organisations)?
- Are different mitigating options needed for different groups of claimants?
- Are there barriers or potential unintended consequences to removing the five week wait—either for claimants or the Department? How can they be overcome?
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