Universal Credit: the wait for a first payment

Work and Pensions Committee Closed Inquiry
Opened: 9 Mar 2020 Closed: 2 Feb 2022 Parliament page
This inquiry looked at the five week wait that faces new Universal Credit claimants before receiving their first benefits payment. It examined the options that the Department for Work and Pensions could consider for reducing or ending the wait and explore other possible solutions. Read the call for evidence to … Read more
40 Recommendations
15 Conclusions
1 Report
6 Oral sessions
7 Letters
6 Events
Activity timeline 15 events
16 Jul
2021
Correspondence
12 Jan
2021
Report published
19 Oct
2020
Report published
24 Sep
2020
Correspondence
11 Sep
2020
Correspondence
11 Sep
2020
Correspondence
11 Sep
2020
Correspondence
2 Sep
2020
Oral evidence
28 Aug
2020
Correspondence
15 Jul
2020
Oral evidence
1 Jul
2020
Oral evidence
24 Jun
2020
Oral evidence
Oral evidence sessions 6 sessions
2 Sep 2020
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Work and Pensions Committee meeting
Gareth Davies · Department for Transport Jonathan Davidson · Financial Conduct Authority Joshua Reddaway · National Audit Office Nisha Arora · Financial Conduct Authority
15 Jul 2020
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Work and Pensions Committee meeting
Neil Couling · Department for Work and Pensions Will Quince MP · Department for Education
1 Jul 2020
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Work and Pensions Committee meeting
Gareth Morgan · Ferret Information Systems Phil Booth · medConfidential Rt Hon Sir Iain Duncan Smith MP · Department for Work and Pensions Stephen Brien · Department for Work and Pensions The Baroness Stroud · Department for Work and Pensions Tom Loosemore · Public Digital
24 Jun 2020
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Work and Pensions Committee meeting
Adam Smith · Kent County Council Hugh Owen · Riverside Housing Group Jacqueline Hickmore · Cornwall Housing Jeremy Hewer · Scottish Federation of Housing Associations Laura Courtney · Community Housing Cymru Muhammed Butt · London Councils Noel Duke · Harrogate Borough Council Sheila McKandie · Highland Council Sue Ramsden · National Housing Federation
17 Jun 2020
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Work and Pensions Committee meeting
Anvar Sarygulov · Bright Blue Ben Fell · Policy in Practice Dr Mandy Cheetham · Teesside University Dr Sophie Wickham · Department of Public Health, Policy & Systems, University of Liverpool Mike Brewer · Resolution Foundation Nicholas Timmins · Institute for Government Patrick Spencer · Centre for Social Justice
10 Jun 2020
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Work and Pensions Committee meeting
Emma Revie · Trussell Trust Gemma Hope · Leonard Cheshire Iain Porter · Joseph Rowntree Foundation Jennifer Harrison · Changing Lives Mark Gale · Young Women's Trust Minesh Patel · Mind Peter Tutton · StepChange Tom Lee · Child Poverty Action Group
Title HC No. Published Items Response
Third Report: Universal Credit: the wait for a first payment HC 204 19 Oct 2020 55 Responded
Recommendations & Conclusions
22 results
Clear
2 Recommendation Rejected
Third Report: Universal Credit: th…
DWP has previously adopted a sceptical attitude towards the evidence linking food bank use with...
DWP has previously adopted a sceptical attitude towards the evidence linking food bank use with Universal Credit. The Minister has now recognised that the Department needs to do more to improve its understanding of the what causes food bank use … Read more
Government Response
The government explicitly rejects the recommendation to publish its analysis of foodbank use drivers, stating that due to resource reallocation for the COVID-19 pandemic, it will not be conducting or commissioning any research.
Department for Work and Pensions
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4 Recommendation Rejected
Third Report: Universal Credit: th…
We also heard evidence which suggests that people on Universal Credit are more likely to...
We also heard evidence which suggests that people on Universal Credit are more likely to have rent arrears than people still claiming legacy benefits. The Department’s own data show that, while some people who come onto Universal Credit have pre-existing … Read more
Government Response
The government rejects the recommendation to investigate the link between Universal Credit and rent arrears, citing resource reallocation due to the pandemic and arguing that attributing arrears solely to UC is simplistic.
Department for Work and Pensions
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5 Recommendation Rejected
Third Report: Universal Credit: th…
There is also research which found evidence of an increased prevalence of psychological distress, following...
There is also research which found evidence of an increased prevalence of psychological distress, following the introduction of Universal Credit, among people affected by the policy. The research was not able to delineate whether a change of benefit system in … Read more
Government Response
The government rejects the implicit recommendation to conduct further research and evaluation to understand the drivers and clinical impact of psychological distress linked to Universal Credit, citing resource reallocation due to the COVID-19 pandemic and outlining other support measures.
Department for Work and Pensions
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6 Recommendation Rejected
Third Report: Universal Credit: th…
DWP should conduct or commission research, before the end of this financial year, to develop...
DWP should conduct or commission research, before the end of this financial year, to develop its understanding of the impact of Universal Credit, particularly the wait for the first payment, on the rising use of food banks; on claimants’ levels … Read more
Government Response
The government rejects the recommendation to conduct or commission research on the impact of Universal Credit and the five-week wait on food bank use, rent arrears, and mental health, citing resource reallocation due to the COVID-19 pandemic and highlighting other support measures.
Department for Work and Pensions
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7 Recommendation Rejected
Third Report: Universal Credit: th…
DWP should publish details of the meetings that it holds with stakeholders, like the Trussell...
DWP should publish details of the meetings that it holds with stakeholders, like the Trussell Trust, to ensure that the public and Parliament know that important and well-regarded research, such as that produced by the Trussell Trust, is considered when … Read more
Government Response
The government states that Ministerial meetings with stakeholders are already published quarterly on GOV.UK but rejects publishing details of every engagement, including topics discussed and actions taken, citing the need to maintain trust and partnership with stakeholders.
Department for Work and Pensions
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10 Recommendation Rejected
Third Report: Universal Credit: th…
We recommend that DWP should eliminate the five week wait for all claimants moving to...
We recommend that DWP should eliminate the five week wait for all claimants moving to Universal Credit through managed migration, including for claimants moving from tax credits. Those claimants should continue to receive their existing benefits during their first monthly … Read more
Government Response
The government rejects eliminating the five-week wait by continuing legacy benefits, citing existing advance payments and run-ons. It also rejects offering fortnightly payments by default, stating that monthly payments prepare claimants for work and Alternative Payment Arrangements are available case-by-case.
Department for Work and Pensions
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12 Recommendation Rejected
Third Report: Universal Credit: th…
The evidence we received was overwhelmingly in favour of some form of initial, non-repayable payment...
The evidence we received was overwhelmingly in favour of some form of initial, non-repayable payment for new Universal Credit claimants. That would give new claimants the money they need for basic living essentials like food and heating, without requiring them … Read more
Government Response
The government discusses existing repayable Advances for financial support, the Breathing Space scheme, and increased funding for debt advice, but does not commit to the recommended non-repayable 'starter payment'.
Department for Work and Pensions
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13 Conclusion Rejected
Third Report: Universal Credit: th…
We have considered the various options carefully.
We have considered the various options carefully. In recommending a course of action, we have chosen an approach which offers simplicity: a simple amount of money, so it is clear to claimants what they can expect, and a simple process, … Read more
Government Response
The government rejects the need for a starter payment, stating that New Claim Advances are already available, and introducing non-repayable advances would increase fraud risk and administrative burden.
Department for Work and Pensions
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14 Recommendation Rejected
Third Report: Universal Credit: th…
We recommend that the Department pay all first time claimants of Universal Credit a “starter...
We recommend that the Department pay all first time claimants of Universal Credit a “starter payment” equivalent to three weeks of the Standard Allowance of Universal Credit. This payment should be made two weeks after the initial claim, and only … Read more
Government Response
The government rejects the recommendation to pay all first-time Universal Credit claimants a 'starter payment,' stating that New Claim Advances are already available and that non-repayable advances would increase fraud risk, administrative burden, and could lead to inappropriate gains.
Department for Work and Pensions
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16 Recommendation Rejected
Third Report: Universal Credit: th…
The starter payments we have recommended would also be available to people making claims under...
The starter payments we have recommended would also be available to people making claims under the Special Rules for Terminal Illness. We recommend that the Department consider what further support it could offer to people making claims for Universal Credit … Read more
Government Response
The government rejects the recommendation for further support, including starter payments or enhanced backdating, for terminally ill claimants, stating that existing New Claim Advances negate the need for a starter payment and that UC already has an established fast-track process for these claimants.
Department for Work and Pensions
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19 Conclusion Rejected
Third Report: Universal Credit: th…
The Department continues to claim that Advances are not loans, but we find that argument...
The Department continues to claim that Advances are not loans, but we find that argument impossible to accept. Advances must be repaid at a set rate, over a set period. The Department risks misleading claimants, and damaging its own credibility, … Read more
Government Response
The government explicitly rejects the committee's finding, reiterating that a new claim Advance is not a loan but rather a spreading of UC entitlement. It explains that advances are limited to estimated awards, with support available for budgeting and repayment deferrals for hardship cases.
Department for Work and Pensions
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24 Recommendation Rejected
Third Report: Universal Credit: th…
The Department says that claimants who are struggling can already defer repayments of their Advance...
The Department says that claimants who are struggling can already defer repayments of their Advance for three months. But the evidence we have heard from charities who work with claimants is that this option is not effectively communicated. Without reliable … Read more
Government Response
The government rejects publishing additional specific data on advance repayment deferrals, stating no plans to do so at this point, though it will include general information on advances in its annual report. It does not address the recommendation for work coaches to proactively inform claimants of the deferral option.
Department for Work and Pensions
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26 Recommendation Rejected
Third Report: Universal Credit: th…
Some people in financial distress during the wait for their first payment can face a...
Some people in financial distress during the wait for their first payment can face a difficult choice between using their Advance to pay their housing costs, or to cover other essential costs, such as food or heating. No one should … Read more
Government Response
The government rejects the recommendation to offer direct payment of the housing element of an Advance to landlords. It states that existing Managed Payments to Landlords are already available and cautions against the potential for landlord pressure if this option were introduced for advances.
Department for Work and Pensions
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30 Recommendation Rejected
Third Report: Universal Credit: th…
We recommend that the Department invests in expanding and developing Help to Claim so that...
We recommend that the Department invests in expanding and developing Help to Claim so that the service can provide support to people beyond the application process. This should include debt advice, support for people who are struggling with Advance repayments, … Read more
Government Response
The government rejects expanding Help to Claim to directly provide ongoing support like debt advice and digital skills. It states that Help to Claim already signposts claimants to other support services for these needs and defends the current scope of the service.
Department for Work and Pensions
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37 Recommendation Rejected
Third Report: Universal Credit: th…
The Universal Credit application process requires claimants to provide a great deal of information about...
The Universal Credit application process requires claimants to provide a great deal of information about their circumstances, to enable the Department to assess their claim. When they have done this, Universal Credit claimants rightly expect that they should be paid … Read more
Government Response
The government rejects the recommendations, stating payment timeliness must be balanced with fraud reduction, and defending the existing WCA process which includes backdating awards if a delay occurs. They do not agree to pay claimants at the highest rate during WCA delays or limit repayments to only deliberate fraud.
Department for Work and Pensions
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39 Recommendation Rejected
Third Report: Universal Credit: th…
The recovery of Tax Credit debt from claimants’ Universal Credit awards clearly presents problems.
The recovery of Tax Credit debt from claimants’ Universal Credit awards clearly presents problems. However, the option of returning responsibility to HMRC now would be too challenging to deliver in practice. Instead, we recommend that DWP should continue to collect … Read more
Government Response
The government rejects the recommendation for a 10% cap on debt repayments, stating its 30% cap balances claimant needs with responsible fund administration. It does not address recommendations to delay debt recovery until advances are repaid, write off debts over 6 years, or extend the FCA's approach to public sector debts.
Department for Work and Pensions
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41 Recommendation Rejected
Third Report: Universal Credit: th…
Many claimants are simply unaware that they can ask for their claim to be backdated...
Many claimants are simply unaware that they can ask for their claim to be backdated by a month. Even when they do ask for backdating, they sometimes face an intrusive and bureaucratic process. We recommend that the Department review the … Read more
Government Response
The government rejects the recommendation, stating that UC is designed for quick claims at the point of need, and that extending backdating beyond one month could disincentivize this. They do not commit to reviewing evidence use for backdating, publishing work coach information, or increasing awareness.
Department for Work and Pensions
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42 Recommendation Rejected
Third Report: Universal Credit: th…
Currently, backdating is only permitted up to a month before the claim was submitted.
Currently, backdating is only permitted up to a month before the claim was submitted. Given the seriousness of the life events which might allow the backdating of a claim—bereavement, serious illness, relationship breakdown—this period seems astonishingly short. We recommend that, … Read more
Government Response
The government rejects extending the backdating period beyond one month, arguing that it could disincentivize claimants from making their UC claims at the point of need. They reiterate that existing limited provisions and support are available for vulnerable claimants.
Department for Work and Pensions
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47 Recommendation Rejected
Third Report: Universal Credit: th…
Universal Credit works best when it mirrors people’s daily lives.
Universal Credit works best when it mirrors people’s daily lives. Payments which align with people’s rent schedules could make it easier for claimants to budget and plan. We recommend that the Department explain in response to our report whether it … Read more
Government Response
The government rejects the recommendation to align Universal Credit payments with rent schedules, stating it is not appropriate due to potential difficulties if claimants change address, and highlights an existing payment alignment feature for social landlords.
Department for Work and Pensions
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51 Conclusion Rejected
Third Report: Universal Credit: th…
It is disappointing that suggestions to improve Universal Credit have apparently been thwarted by an...
It is disappointing that suggestions to improve Universal Credit have apparently been thwarted by an IT system which was supposed to be developed in an agile fashion, yet seems to be anything but. It is unfortunate that such a rigid, … Read more
Government Response
The government rejects the committee's characterisation of the Universal Credit IT system as rigid and clunky, instead asserting its agility and strong performance in supporting claimants throughout the pandemic, maintaining high payment timeliness.
Department for Work and Pensions
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52 Recommendation Rejected
Third Report: Universal Credit: th…
The monthly assessment is a core part of design of Universal Credit for the Department...
The monthly assessment is a core part of design of Universal Credit for the Department and is the guiding reason behind the five-week wait and payment in arrears. Although the Department says that most people in the wider economy are … Read more
Government Response
The government rejects the recommendation to consider more flexible assessment systems, stating that such a system is not easily operationalised due to complexities with fluctuating earnings and multiple income sources, which would cause financial uncertainty and poor customer service.
Department for Work and Pensions
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53 Recommendation Rejected
Third Report: Universal Credit: th…
We recommend that the Department assesses a model in which it estimates people’s daily pay...
We recommend that the Department assesses a model in which it estimates people’s daily pay rate from data it already receives from HMRC, as suggested by Ferret Information Systems, and in which it would make payments from day one of … Read more
Government Response
The government rejects the proposed model for daily pay rate estimation and day-one payments, explaining it cannot be easily operationalised for claimants with fluctuating or multiple earnings due to reconciliation challenges and potential over/underpayments, but it does detail the data received from HMRC.
Department for Work and Pensions
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Government Response AI assessment · 55 of 40 classified
Accepted 6
Accepted in Part 5
Acknowledged 8
Deferred 2
Not Addressed 12
Rejected 22
Total 40 recs + 15 conclusions
Correspondence 7 letters
16 Jul 2021 Correspondence with Minister for Welfare Delivery - joint meeting with House of Lords Economic Affairs Committee follow up
Parliament page
24 Sep 2020 Correspondence from NAO about net recovery rate of fraud and error on Universal Credit
Parliament page
11 Sep 2020 Correspondence with Minister for Welfare Delivery on Universal Credit: the wait for a first payment – follow up to 15.7 evidence session
Parliament page
11 Sep 2020 Correspondence with Financial Secretary to the Treasury on the impact of tax credits debt repayments on Universal Credit claimants
Parliament page
11 Sep 2020 Correspondence with the National Audit Office (NAO) on analysis of rent arrears of Universal Credit claimants
Parliament page
28 Aug 2020 Correspondence with the Financial Conduct Authority about best practice in the consumer lending
Parliament page
27 Apr 2020 Correspondence with the Minister for Welfare Delivery about first payments of Universal Credit
Parliament page