Universal Credit can be applied for by most people who are on particularly low incomes or out of work entirely. Coronavirus forced many people to apply for state benefits, often for the first time, which once again raised the issue of delayed initial payments.
The NAO first analysed just how important the advance payment system is as it affects the majority of new claimants: “A minimum five-week wait for the first payment is an inherent part of Universal Credit’s design. Around 57 percent of households making a new claim take a Universal Credit advance payment (which they need to pay back) to help them manage during this period.
“Advances mean that Universal Credit claimants can get access to money faster than claimants on other benefits.
“Claimants and representative organisations told the NAO that the wait for the first payment contributes to financial hardship and debt, despite the availability of advances.
“Repaying the advance can cause claimants difficulties if they are not able to manage on the resulting reduced monthly payments.”
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Unfortunately, those at most in need of support are more likely to struggle with payments according to the NAO.
One of the key causes of this problem was communication, as the NAO went on to explain: “Disabled claimants and people on low incomes are more likely to claim advances and have other debts to repay from their Universal Credit.
“Some 80 percent of claims by low-income households, 67% of claims including someone who has limited capability for work because of a disability or health condition, and 70 percent of claims including a disabled child had a deduction applied to their first payment to cover advances repayments or other debts.
“This compares to 61 percent of all claims.
“Claimants with more complex needs and circumstances, such as people with learning difficulties, can struggle to engage with the claim process or provide the evidence required, leaving them at greater risk of being paid late.
“The NAO’s work identified communication as an issue. For example, people who struggled to understand or communicate in written English found it more difficult to understand what the DWP was asking of them, or complete their claim form correctly. In some cases, the DWP’s communication with the claimant was unclear.”
Gareth Davies, the head of the NAO, commended the DWP for their efforts in recent months but warned that vulnerable claimants need more attention, especially as coronavirus is expected to still be a continuing issue: “The DWP deserves credit for improving its processes so that nine percent of claimants are now getting their first Universal Credit payment on time.
“However, it is concerning that vulnerable people and those with complex claims may struggle with their Universal Credit claim and face financial difficulties.
“The DWP needs to improve its understanding of vulnerable claimants and how best to support them to ensure that no one is slipping through the net.
“This is only going to become more important as the economic upheaval caused by COVID-19 continues.”