Written evidence from the Public Law Project (PLP) SVC0044

1. Public Law Project (PLP) is an independent national legal charity. For 30 years, PLP’s mission has been to improve public decision-making, empower people to understand and apply the law, and increase access to justice through a mixture of casework, advocacy, and research. PLP’s vision is a world in which individual rights are respected and public bodies act fairly and lawfully.

2. Since October 2019, one of PLP’s priority areas is working to achieve a just and non- discriminatory welfare system with a particular focus on benefit sanctions and deductions. Our experience in this area includes casework support in individual cases, bringing strategic litigation to challenge systemic issues, research and the provision of training to welfare advisers. We are currently undertaking a large-scale research project on deductions from Universal Credit (UC), using the mixture of interviews with welfare advisors and UC claimants and a quantitative survey, set for publication in December 2023/January 2024. It focuses on the adequacy and availability of safeguards put in place to ensure fair and correct debt recovery. PLP is currently seeking funding for action research project on benefits sanctions discrimination in partnership with Central England Law Centre.

3. Given our areas of expertise, this evidence will mainly address question 5b about the withdrawal of benefits from vulnerable claimants. It will be divided into two sections: sanctions and deductions. We will also briefly address questions 1 and 6.

DWP does not have a statutory duty to safeguard the wellbeing of vulnerable claimants. Should this change? (Question 1)

4. The DWP should be under a specific statutory duty to safeguard the wellbeing of vulnerable claimants in order to increase the accountability of its practices. This should be used to ensure that no vulnerable person is pushed into destitution as a result of DWP’s action or inactions; that reasonable adjustments are pro-actively put in place to ensure the benefits system and those that operate it respond to individual needs; and that the onus of identifying vulnerability rests with the Department, particularly given the large amount of information that it holds on claimants across its different teams, rather than the individual.

5. PLP considers that either as part of that statutory duty or in addition to it, there should be a right to a minimum level of subsistence. Such a right would act as a shield for those for whom the cost-of-living crisis and inadequate social security pose the most risk.

Does the DWP have sufficient processes in place to ensure that benefits are not withdrawn from vulnerable claimants when there is a risk that this will cause serious harm to the claimant? (Question 5b)

BENEFIT SANCTIONS

6. The exact effect of the sanctions regime on vulnerable claimants is impossible to quantify because of the gaps in official data. However, evidence from PLP’s and others’ research suggest that:

1. the application of a sanction itself creates and exacerbates pre-existing vulnerabilities and increases the likelihood of serious harm[1], and
2. individual circumstances are not appropriately considered when a claimant is referred for a sanction and when drafting a claimant commitment or making an adverse sanction decision[2].

Impact on vulnerable clients:

7. The DWP currently does not issue any data on how people who have a disability, are lone parents or carers are affected by sanctions. However, a recent report by Citizens Advice calculated that 45% of people subject to conditionality (UC without LCW and LCWRA elements) have a disability/long-term health condition.[3] The analysis of their data showed that 53% of people Citizen Advice help with sanctions have a disability, suggesting a disproportionate effect on this group.

8. Sanctions are known to have a negative impact on claimants’ mental health.[4] PLP’s research indicates that the response to raising such problems is often inadequate. For example, expressing suicidal thoughts triggers a call from a safeguarding lead, but does not raise questions about the sanction being an appropriate measure.[5] This is despite sanctions being a driver of rapid mental health decline and suicide.[6] In 2015, one in five benefit-related deaths involved sanctions.[7] It is likely that this proportion is now higher, given that the use of sanctions is at a historical high (6.29% of UC Claimants in May 2023 compared with 2.51% in March 2020).[8]

9. Quoting the sanctions specialist, David Webster,[9] there’s never been a social security system which “delivered as much pain for so little gain” as the sanctions regime. It does not adequately safeguard vulnerable claimants and it undermines their trust in the system which is often the only place they can seek support. At the same time, it has minimal effect on the uptake of long term, quality work[10]. PLP recommends that the Department pauses sanctions until the end of the cost-of-living crisis, and reviews its approach to conditionality, considering the overwhelming evidence of their capability of causing serious harm to the most vulnerable members of the society while simultaneously having minimum positive impact on sustainable employment rates.

Lack of tailored approach

10. Although the DWP recognises that people might have “complex needs”, defined as “difficult personal circumstances and/or life events”[11] the DWP’s identification and monitoring rely overwhelmingly on the discretion of the assigned work coach. This means that too often, vulnerable claimants have their allowance cut because of unrealistic requirements in their claimant commitments[12] or insufficient inquiry of whether there was a “good reason” for not meeting a work-related requirement.[13]

11. The arbitrary character of initial decisions can be illustrated by the strikingly high number of successful challenges to sanctions decisions in the First-Tier Tribunal (81%)[14] and the fact that the likelihood of sanctions changes, depending on the geographical location (“postcode lottery”).[15]

12. By way of example, PLP represented a client in appealing 6 sanction decisions, all for missed appointments. She had 100% of her standard allowance of UC deducted for 665 days. The client was a care leaver who had also experienced domestic violence and suffered from a number of physical and mental health problems and difficulties with literacy. Because of the wait for her first payment of UC, she sometimes could not afford the bus fare to her appointments. Her first 3 appointments with her work programme provider were scheduled before she had received her first UC payment. She missed another appointment to attend a funeral, and in another instance, she had two appointments scheduled for the same afternoon, which due to travel time, meant it was not possible to attend both. Because of the sanctions, at times she could not afford food or heating for her home, and she fell behind on her rent. All six sanctions were overturned on appeal.

13. In January 2023, PLP organised a roundtable with first-tier organisations focusing on the unequal application of sanctions. One of the identified problems was not providing reasonable adjustments for people who cannot read or are not fluent in English. Such claimants would receive communications, either of the requirements or sanction itself, and not understand what was expected of them. Although the DWP started the system of “pinned notes” on claimants' journals[16], conversations with advisors revealed that the information on English as a second language is often not carried through from the original claims.

14. When supported by an advisor, sanctions in those situations are normally reversed at the mandatory reconsideration (MR) stage, but in the meantime, claimants often need to rely on foodbanks. From PLP’s conversations with welfare rights advisors, this process can take weeks to months. However, PLP’s report on challenging benefit sanctions found that there is an inconsistent awareness of MR and those who do know about it tend to refrain from challenging out of the fear of retaliation or feel there is “no point” in challenging them.[17] The remaining additional barrier is access to good quality welfare rights or legal advice, which can be limited by the backlog, geographical location or, again, language barrier.

15. The system of complex needs relies on the voluntary disclosure of vulnerabilities, which a lot of claimants do not feel comfortable with.[18] PLP’s evidence gathered from conversations with sanctioned claimants indicates that the punitive character of the system makes them feel tested, rather than supported. This makes them less likely to reveal intimate issues such as mental health problems, cognitive difficulties or domestic violence. Such issues often lead to problems with meeting work-related requirements. This can be mitigated by staff training, inter-agencies information sharing and proper inquiry into individual circumstances. But without creating a culture of meaningful support, rather than maintaining the atmosphere of fear and distrust, it will be difficult to eliminate this particular burden as claimants will remain unwilling to voluntarily disclose to a system they regard as punitive rather than supportive.

16. PLP’s position is that the use of sanctions should be stopped or used as a last resort rather than issued as a matter of routine for minor breaches. However, the following recommendations can mitigate the harm of the current system:

• Improving the initial decision-making process, e.g., by requiring the benefits sanctions decision-maker to seek direct representations from the person at risk of sanctions.
• Using the “yellow card” pilot scheme, whereby the warning is first issued instead of sanction, and publishing the results.
• Establishing clear appeal procedures, including setting timelines for responding substantively to MR requests and providing clear and accessible information about the process to claimants.

BENEFIT DEDUCTIONS

17. In contrast to sanctions, the benefit deductions regime does not provide for any exceptions (such as LCW and LCWRA elements exempting a claimant from some or all of the conditionality regime). It applies indiscriminately to people with disabilities, mental health problems, single parents and carers. However, the impact of a reduced allowance is likely to be particularly serious for these groups. Various studies[19] have found that UC deductions push people further into poverty and exacerbate their mental and physical health conditions - especially during the cost-of-living crisis. The preliminary findings from PLP’s ongoing research show that it is also more difficult for vulnerable claimants to ask for an adjustment of the repayment plan or to challenge the underlying decision leading to deductions.

Impact on vulnerable claimants:

18. During the cost-of-living crisis, a reduction in the already inadequate benefit rates may render people unable to heat their homes and have regular nutritional meals. For people with underlying vulnerabilities, these shortcomings might have more far-reaching consequences[20]. Not only do they have higher spending needs, but also their conditions might be exacerbated due to insufficient nutrition, medication or poorly heated accommodation.

19. The process of challenging deductions and asking for an alternative repayment plan can itself exacerbate vulnerabilities. Claimants interviewed by PLP for the ongoing research project described this process as stressful and anxiety inducing, as well as reported problems with sleeping and a decline in mental health.

20. In R (on the application of K) v Secretary of State for Work and Pensions [2023] EWHC 233[21], a case brought by PLP’s client, the Department’s ‘Equality Analysis for Universal Credit Third Party Deductions’, was held to be an insufficient assessment of the impact the deductions policy would have on people with disabilities. An updated equality analysis is yet to published.

Automatic nature of recovery

21. According to the DWP 2022-23 Accounts Report, the Department aims to “recover the money at the earliest opportunity, whilst working closely with customers in order to avoid hardship”. However, the debt is automatically recovered, and any alteration of the repayment plan needs to be initiated by the claimant. The process of applying a deduction is “largely automated” with human agents only intervening following “customer contact”. Although the Department has the discretion not to recover an overpayment debt from the outset, in practice it is only used in cases of small overpayments under £65[22]. The policy intent is to “uphold the maximum rate of deduction” (currently 25% for earning households and 15% for non-earning ones).[23]

22. This means that there is no link between the initial level of a deduction and individual circumstances. PLP is concerned that this puts the most vulnerable claimants at the biggest disadvantage (in particular, claimants with psychosocial conditions who struggle with social interaction and expression). Vulnerable claimants often lack the articulacy, confidence or energy to start such a process, which can also generate added stress and anxiety. Welfare rights advisors that PLP spoke to as a part of the ongoing research project voiced concerns about the lack of a proactive approach to assessing the affordability of deductions and the vulnerability of those who receive them. Similarly, UC claimants interviewed by PLP often expressed their preference to have been contacted prior to the deduction being applied.

23. Such an approach is inconsistent with the assurances made at the time of the Welfare Reform by, the then Employment Minister, Chris Grayling who warned against a “one-size-fits-all approach” when criticising the proposal for automatically writing off the debts resulting from administrative mistakes. He said such approach would “miss the fact that every case is different, and every circumstance is different”.[24] The current policy does exactly that.

24. In its response to the Public Accounts Committee’s report 2019-20, the Government acknowledged this problem and ensured that “department’s analysts are currently looking at how the department can use financial data to help identify vulnerable customers at source so that deductions can be tailored, and collection strategies refined.”[25] Since this document was published in 2021, there has been no change in how the Department tailors its approach to taking deductions from vulnerable claimants’ awards.

25. PLP Recommends that the Department:

a)      introduce a list of vulnerabilities (e.g., single parent status, disability, mental health crisis, etc.), where the default position would be not to recover, and

b)      in any case, prior to seeking recovery of a debt, it proactively assesses claimants’ individual circumstances and their ability to repay.

Awareness and availability of redress and hardship relief measures

26. Claimants are often unaware that their allowance will be reduced until the money does not appear in their account. From PLP’s evidence from its ongoing research, it is apparent that some vulnerable claimants do not know that they have a deduction in place until it is pointed out by a welfare rights advisor. The communications on deductions were described by advisors as lengthy, “copied and pasted”, “computer generated”, “cryptic” and lacking clear signposting. This makes it difficult for claimants to read and digest, especially if they suffer from severe health conditions or cognitive difficulties or, as with sanctions, English is not their first language. Such barriers constitute another reason for contacting people directly (e.g., via the phone) to explain the deductions and available options.

27. Many people PLP spoke to report that they have not even received a letter or that all information they were given was a notification that they “have been overpaid” on their UC journal. When they sought to clarify the situation, some report problems with:

• UC staff being unable to give details of the overpayment, including numbers to call. An extreme example included a claimant being told that it was “up to her” to find out where it came from;
• navigating between the Debt Management team and Universal Credit journal/helpline (being redirected from one office to another).

Some claimants meet with their work coaches and hope they might be able to explain why their allowance has been reduced, but they often lack expertise or knowledge to help.

28. Such complex process puts vulnerable people off seeking an affordable repayment plan and/or challenging the overpayment decision. One of our interviewees, an adviser at a hospital-based charity, said these claimants had no energy to “fight the additional battle” on top of their health issues.

29. The provisional findings of PLP’s ongoing research strongly suggest that claimants are not provided with adequate information about the relief measures set out in the Benefit Overpayments Recovery Guide[26], namely reduction in the rate of recovery, suspension of recovery and discretionary waiver. Overpayment decision letters, if delivered, only mention the possibility of “agreeing an affordable repayment plan”.

30. Another reported problem is the lack of reasonable adjustments provided during the process. One of PLP’s clients, suffering from a post-stroke brain fog and forgetfulness, asked the Debt Management team for a written exchange, rather than renegotiating repayment plan via the phone. It was motivated by the difficulties with remembering what had been discussed and agreed on. This request was refused and he was subsequently told he had been marked as having “refused the offer of reducing the rate of debt recovery”.

31. PLP recommends that:

• the Department amend its working practices so that claimants are clearly told: (i) that deductions will be taken from their award; (ii) how the overpayment occurred and what category of debt is owed; (iii) the total amount owed; and (iv) how the rate of recovery was determined.
• when the Department corresponds with a claimant about an overpayment or a deduction, it clearly refers to the claimant’s right to request that the deduction be waived, suspended, or recovered at a lower rate and how to do this.
• the UC and jobcentres staff are trained to be able to effectively support claimants in managing their deductions.

32. PLP also urges the committee to request that the DWP:

• reviews how Universal Credit vulnerable claimants are being impacted by deductions to their awards.
• publishes a lawful equality impact assessment on its deductions policy.

The availability of waiver

33. The DWP has the discretion to waive the debt in “exceptional circumstances.”[27]  However, the measure is extremely difficult to secure, even for very vulnerable claimants. In calendar years 2021 and 2022, there were only 338 registered applications for a discretionary waiver, of which 32 were fully or partially successful[28]. These numbers are vanishingly small given that 3.6 million households had one or more deduction from March 2021 to February 2023[29]. This is partially caused by limited awareness of such options, even amongst welfare advisors[30].

34. People applying for a waiver are expected to provide comprehensive medical and financial evidence linking their conditions to the application of the deductions. PLP’s client[31], K, had her waiver application refused due to ‘insufficient evidence’ despite providing letters from her GP and her family social worker, and a full breakdown of her income and expenditure. She was only successful after bringing a court case.

35. PLP is aware of a cancer patient who, along with his application for a waiver, provided medical evidence confirming that receiving the letter about upcoming overpayment recovery caused significant stress and anxiety capable of exacerbating his illness. He was told by the DWP that they could not accept such evidence if the deductions were not yet in place – he needed to wait until the first payment was made to see if such effects occurred then.

36. PLP has also been made aware of a claimant who applied for a waiver with a support of his Citizens Advice representative. The supporting evidence included a letter from the Community Mental Health Team, which included a following assessment: “You had a relapse of depression recently, after part of your benefits were stopped. This is an indication of the fragility of your mental health – any change or challenge to the restricted life you lead is likely to cause a relapse of symptoms, which is why you avoid contact with the outside world”. This was not sufficient to grant the waiver, even though the overpayment was caused by official error.

37. PLP has recently assisted a man in his late 90s with a historic overpayment debt of over £40,000. DWP only agreed to waive the debt following pre-action correspondence. However, the lengthy and demanding process caused the client, who had serious health issues, considerable stress and upset.

38. The DWP guidance on waiver includes a list of factors to be considered when making a waiver decision. This includes financial circumstances, the DWP conduct, detrimental reliance on the overpayment, impact on health etc. However, both waiver statistics and testimonies from welfare rights advisors suggest there remains an “unspoken order of priority”[32]; some of the listed factors are in practice given very little weight when considering a waiver request. For example, from April 2021 to August 2022, there were no waivers granted on other than medical grounds[33]. High evidential burden, superficial approach to waiver criteria listed in BORG, and low numbers of waivers granted suggests that the Department pursues the policy of recovery at all cost.

39. PLP recommends that the Department reviews its extremely rigid approach to waiver and considers waiver a default option where vulnerabilities are identified.

How successfully does DWP work with external agencies (such as the NHS) to ensure that important information is shared between organisations? (Question 6)?

40. Problems with information sharing start with the communications within the DWP. For example, bedroom tax exemptions, such as being in receipt of certain disability benefits, are not automatically taken into account when calculating the housing element of Universal Credit. This means that people end up receiving less than they are entitled to because of the lack of the smooth exchange of data between the DWP agencies. PLP is aware that this issue has been flagged to the DWP but have no information on whether it has yet been solved.

41. The DWP routinely recovers debt originating from other institutions, for example historic tax credit overpayments[34] or council tax arrears[35]. Although the recovery is, in theory, coordinated, when claimants seek any information of the specifics of the debt, they need to contact HMRC or local authority separately. This further complicates the already complex network of institutions involved in dealing with deductions, making the process even more stressful.

42. PLP is aware of an 18-year-old tax credit overpayment, which the DWP sought to recover after the individual migrated to Universal Credit in 2021. When HMRC were asked by PLP to provide the individual with further information about how the debt had actually arisen (information not passed to the DWP debt recovery team), HMRC admitted that they were unable to ascertain the precise circumstances from their internal records, agreed to cease recovery and return the money collected.

43. PLP’s position is that historic tax credit overpayments should be written off by default. However, in the meantime, it recommends updating the Memorandum of Understanding between the Departments to ensure that the details of the historic tax credit are known by the DWP’s agents.

CONCLUSION:

44. In its response to the twenty-sixth Public Accounts Committee’s report on its 2019-2020 Accounts, the DWP agreed with the recommendation to “do more to understand the impact that both overpayments and underpayments have on claimants and ensure that vulnerable claimants are treated with care when dealing with error on the claim”[36]. PLP recommends that the DWP delivers on this assurance and extends it to the entirety of its operations.

45. Both sanctions and deductions regimes show that the DWP lacks understanding of the needs of vulnerable claimants. These systems are inflexible, complicated and extremely difficult to challenge. To prevent further harm being inflicted upon vulnerable claimants, the DWP needs to change its ethos from providing reactionary adjustments to proactively seeking to identify and protect people who need their support the most.

October 2023