19 Accepted

High Universal Credit non-claim rate causes significant income loss for vulnerable households.

Recommendation
Organisations who work with benefit claimants submitted written evidence raising concerns about the non-claim rate and the implications if people did not move to UC. Citizens Advice, for example, said that the non-claim rate was alarmingly high and the resulting loss of income was likely to have a significant impact on the households involved.39 Similarly, the National Association of Welfare Rights Advisers referred to their members’ concerns about the number of Tax Credit claimants who were failing to migrate and highlighted that the average loss of income was around £300 per month.40 The Department told us that the median value of the Tax Credits received by people who had not claimed UC was £3,200 per year.41 The Department’s in-house support for claimants
Government Response Summary
The government agrees with the Committee’s recommendation and states it has been implemented, noting the department currently publishes statistics on claim rates to Universal Credit, by legacy benefit type, on a quarterly basis which will start to include the non-claim rates for wider legacy benefit types. It will also publish the results of the dedicated survey of Tax Credit non-claims and associated learning, by the end of the year.
Government Response
Accepted
HM Government Accepted
3. PAC conclusion: Many vulnerable people risk falling into financial hardship if the proportion of legacy benefit claimants not switching to Universal Credit remains at its current level. 3. PAC recommendation: The Department should publish by the end of August 2024 the Universal Credit non-claim rates by type of legacy benefit, and set out the action it is taking in the event that the non-claim rates are higher than expected. Before the end of the year, the Department should also publish the results of the survey of those Tax Credit claimants who did not apply for Universal Credit alongside a statement of what lessons it would learn. 3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 3.2 The department currently publishes statistics on claim rates to Universal Credit, by legacy benefit type, on a quarterly basis. These statistics will start to include the non-claim rates for wider legacy benefit types (over and above the initial Tax Credits cohort) as these additional cohorts begin to be migrated in sufficient numbers onto Universal Credit. 11 3.3 The amount of data available on non-claim rates by legacy benefit type will still be quite limited for the August 2024 publication (which will include data up to the end of June 2024), due to the migration timescales. 3.4 The non-claim rates will be monitored closely via the Move to Universal Credit Implementation Control Centre, whilst they are close to forecasts presently, should the rates be higher than expected from discovery work, further analysis and investigation will be undertaken. If the insights from this work suggest there are issues to be addressed, the Universal Credit Programme will develop remedial actions based on the insights. The department will be content to share details of these actions with the Committee, should they be required. 3.5 In addition, the department will publish the results of the dedicated survey of Tax Credit non-claims and associated learning, by the end of the year.
Addressee Bodies
HM Treasury
Timeline
Recommendation age 2.1 yrs
Report published 26 Apr 2024