Written evidence from Ken County Council [UCW0007]

To what extent have the mitigations the Govt has introduced so far (eg advance payments) helped to reduce the negative impact of the 5 week wait for UC claimants?

The 5-week wait for payments causes untold problems for our client group (care leavers). Up to their 18th birthday they remain the responsibility of KCC to pay for their maintenance and housing. This is done by providing them with a fortnightly payment (called Essential Living Allowance) for their maintenance and paying the landlord for their housing costs. On their 18th birthday a claim is submitted but the young person will still have to wait a further 5 weeks for payment. During this time we may make further payments of ELA to ensure the young person does not have to take out an advance payment of UC. An advance payment is a loan and is recovered from their next few payments of UC.  We have countless examples of young people who have applied for an advance payment who then struggle to meet other debts when it is recovered from their next few months. This will often lead them to neglecting to pay other bills, for example council tax.

What is the best way of offsetting the impact of the 5 week wait?

Scrapping the 5-week wait for all claimants – reducing the waiting period to 2 weeks would greatly benefit our client group as well as our budget. At the moment we may pay for 4 weeks of ELA costing KCC £231.60 per young person. As we have about 1600 care leavers (most of whom would be eligible for UC) reducing the waiting period to 2 weeks would greatly benefit our financial responsibility.

Offering non-repayable advances to some claimants – a young person starting their adult lives in debt to the DWP can result in a rapidly spiralling of financial problems. Our young people often lack budgeting skills necessary. A reduction in their monthly payment of £251 can lead them to seek alternative methods of income generation eg payday loan companies, criminality. We have numerous examples of young people getting into financial problems as their UC payments are reduced. A non-repayable advance to care leavers would help alleviate this problem.

More flexibility on backdating – this shouldn’t affect our young people as KCC Personal Advisors help our young people with their claims for UC. This is normally done at the appropriate time ie from their 18th birthday.

Extending run-on to cover legacy benefits – again this is not an issue with most of our young people as they are not in receipt of legacy benefits.

Reducing rate at which advance payments are paid back – this would help our young people. At the moment repayments can be made over 12 months, extending this to 24 months would allow the young person to keep more of their UC payments thus releasing extra funds to pay other bills. It does not affect the fact that the young person will still be starting adult life in debt.

Paying 2-weekly – we understand that the reason for the introduction of monthly payments was to mirror the world of work where many employers pay on a monthly basis. However, many of our young people work for employers who pay on a weekly basis. Some of our young people have limited budgeting skills and monthly payments is encouraging them to spend their money as soon as it is received. Twice monthly payments will minimise this problem. It is my belief that this should be the default option. Our young people are one of the vulnerable groups who can already apply for alternative payment arrangements

Are different mitigating options needed for different claimants?

For our young people we would recommend scrapping the 5-week wait and making twice-monthly payments. This will mean the young person is not in debt at the start of their adult life. Twice-monthly payments should encourage better financial planning.

We also have other problems with the administration of the UC benefit and its impact on our young people. Jobcentre staff are often unaware that our young people are care leavers. This is because there is no question on the claim. This means that our young people do not benefit from eg exemption from the shared-accommodation rate.  Recommendation: a question on the online claim form asking about being a care leaver. Also, the default position is that housing costs go direct to the claimant. Our care leavers are in tier 1 high likely need and the landlord can apply for direct payments without being in rent arrears. However, we often find that the first payment still goes to the young person. This can cause disagreement between the young person and their landlord. Recommendation: default position is that housing costs go direct to landlord for care leavers.

March 2020