Post by nickd on Jun 25, 2012 20:23:13 GMT 1
Universal Credit
......or Universal Chaos?
You get some idea of the chaos likely to be inflicted upon millions when you consider the impact a software malfunction had upon thousands of people trying to access their Nat West bank accounts over the last 6 days; the banking chaos has only lasted a week and it's unclear how many of the Nat West's 7.5 million customers have been affected; but rest assured this will be a drop in the ocean when compared with the launch of the new Universal Credit next year, yes chaos is coming as regulations are now being considered as to how Universal Credit is paid to millions of claimants who can expect difficulty in extracting money from their cash points if their benefit hasn't been paid in on time.
It's a recipe for financial disaster which could affect rent/mortgage payments, direct debits or simply not having enough to live on if a claimant's account hasn't been credited with sufficient funds. One wonders if the switch to monthly payments in arrears isn't just a ploy for government to save money by making claimants wait a bit longer for their cash. Problems are also likely to be encountered by thousands of disabled claimants who will be expected to make claims for Personal Independence Payments using a new on-line process.
Universal Credit will see claims for Income Based Jobseeker's Allowance, Employment & Support Allowance, Housing Benefit, Income Support, Working & Child Tax credits merged into one; the existing Council Tax Benefit will be abolished from April 2013 and left to the mercy of cash starved local councils who will be expected to devise their own localised version; the expectation is that savings of 10% will be made by the implementation of this little known piece of localised legislation. You can read of some of the concerns likely to be caused by implementation here on the Touchstone blog.
Government ministers are doing all they can to promote their far reaching welfare reforms as the best thing since sliced bread, but others like Johnny Void rightly asks the question are the wheels falling off Universal Credit?; yes Johnny they are and spectacularly so. Naturally all the negativity which surrounds these reforms is dismissed as left wing propaganda; heaven forbid anyone who casts scorn on the whole sorry saga due to hit us soon. Actually I would love to see welfare reform work because I see the casualties of it every day, those that have constructed these flagship reforms simply haven't got the first clue as to the devastating effects they are going to have on people's lives. I'm not just talking about benefit claimants either, take a look at what the HMRC is going to inflict upon employer's when it brings in a requirement to supply monthly information about their worker's wages with the introduction of 'Real Time Information'; it's central to Universal Credit that information is collected about people's wages as they are assessed in new assessment phases; heaven help those who are self - employed or who have variable wages or more than one employer.
We've only recently seen the introduction of the draft regulations for the revised Employment and Support Changes, Universal Credit and Personal Independence Payment. For a government committed to 'less legislation' it's simply astounding how this has escalated into such a confusing array of legislation which is bound to be problematic when aligning it to that which is already in place. If you are brave enough to work your way through the draft regulations you can access the links here on Mylegal. The DWP has opened it up to another purported 'listening exercise' - I feel compelled to make my usual response but I ask myself is it really worth the bother when Government shows itself time and time again to be so incredibly hard of hearing. If you want to make a response time is limited; a day or so when I last looked.
But the worst is yet to come, yes it gets worse; once again all that's rotten to the core is kept well and truly quiet. On another relentless internet trawl I happened to stumble across this 'explanatory memorandum' for the Social Security Advisory Committee. Our ministry of justice has us welfare benefit specialists down as mere 'generalist advisers' who just fill in benefit forms; in reality of course we know far more about this than government wants us to pass on to our clients. That's why I thought I'd look for the intended amendments in what are known as the 'Claims & Payments Regulations'. This is the legislation by which a determination is made over how claimants will actually be paid. The explanatory memorandum reveals some truly alarming changes (these require a more in depth analysis) but you'll get the gist of which way this is headed and the potential problems which may arise:
Claimants will receive their payments using a bizarre combination of monthly payments in arrears. Some elements of the individual Universal Credit will be based on a 'four week' month and others will be calculated upon the basis of a 'calender' month. Imagine the chaos as claimants go from weekly or fortnightly to monthly payments?
The vast majority of claims will be made on - line or via the telephone. Personal Independence Payment claims will be made on-line with advice agencies no longer being stocked with paper claim forms; - all very well for those able to make a claim electronically, some claimants will not be able to independent access to help over the completion of their claims as the on-line process will exclude them from taking it along to an agency who could advise upon the contents, other claimants will simply struggle with the technology aspect.
The identities of on-line & telephony claimants will need to be verified by 'secure means' to validate claims; - what will these security measures entail?
Couple claimants will have to agree a joint responsibility commitment before their claim can be made. With one payment being made the couple will have to agree which account the money goes in if they hold separate accounts. There is strong presumption that couples claimants have joint accounts and freely share their financial arrangements; - how practical is this for many couples in conflict or who choose not to share their finances?
Claimants will be expected to 'budget' their money and rent payments will not be made directly to landlords (unless there are exceptional circumstances - in which case claimants will be 'screened' over their financial capability). Problems may be experienced if a payment lands on a due date over a weekend or on a bank holiday - with potential chaos if direct debits are not met in aligning payments.
The expectation is all claimants will have bank accounts, this isn't always possible where people are in debt and find it impossible to set up an account if they are in an insolvency situation.
'Posthumous' payments will no longer be made; affecting the bereaved.
Polygamous marriages will no longer be recognised.
A potential misalignment situation arises where claimants have separate reporting duties to a Local Council over their Council Tax benefit and their separately administered Universal Credit claim. What if the Council uses a different weekly earnings figure to that used in the calculation of Universal Credit?
What about appeal situations, how will claimants have their Universal Credit calculated whilst waiting for their appeals and then credited with retrospective awards if they are successful?
Does the use of assessment periods mean that claimants are unable to appeal the amounts used on the basis that the award is only 'provisional' until their award has been finalised? - this could potentially mean claimants are underpaid until their award is reconciled following the assessment period. Clarification is needed over rights of appeal during the process of assessment and what rights claimants will have to dispute amounts said to be recoverable in overpayment cases.
What will happen in cases where claimants are on the contributory elements of Employment & Support or Jobseeker's Allowance and thus sit 'outside' of the Universal Credit but who may become entitled to the income based variant upon expiry of their contributory period or who have an underlying entitlement with the inclusion of housing costs (mortgage) after any waiting period expires - how will they be identified?
In cases where an employer fails to supply accurate monthly wage information via the HMRC Real Time Information portal and an overpayment is subsequently incurred will the employer become liable for the overpayment on the grounds that they contributed to the mistake and the claimant has no reasonable prospect of knowing an overpayment has occurred?
Curiously page 13 mentions that some cases will be referred to a 'human decision - maker', is there a new breed of decision - maker which is not human?
Deductions of up to 40% can be made from a Universal Credit claimant's standard allowance; - there seems to be no provision for ensuring that this has not been checked against a direct deduction from an employee's wages with potential risk of 'double recovery'.
Reactions anyone?...
Maybe Ken Clarke could give us an answer?
......or Universal Chaos?
You get some idea of the chaos likely to be inflicted upon millions when you consider the impact a software malfunction had upon thousands of people trying to access their Nat West bank accounts over the last 6 days; the banking chaos has only lasted a week and it's unclear how many of the Nat West's 7.5 million customers have been affected; but rest assured this will be a drop in the ocean when compared with the launch of the new Universal Credit next year, yes chaos is coming as regulations are now being considered as to how Universal Credit is paid to millions of claimants who can expect difficulty in extracting money from their cash points if their benefit hasn't been paid in on time.
It's a recipe for financial disaster which could affect rent/mortgage payments, direct debits or simply not having enough to live on if a claimant's account hasn't been credited with sufficient funds. One wonders if the switch to monthly payments in arrears isn't just a ploy for government to save money by making claimants wait a bit longer for their cash. Problems are also likely to be encountered by thousands of disabled claimants who will be expected to make claims for Personal Independence Payments using a new on-line process.
Universal Credit will see claims for Income Based Jobseeker's Allowance, Employment & Support Allowance, Housing Benefit, Income Support, Working & Child Tax credits merged into one; the existing Council Tax Benefit will be abolished from April 2013 and left to the mercy of cash starved local councils who will be expected to devise their own localised version; the expectation is that savings of 10% will be made by the implementation of this little known piece of localised legislation. You can read of some of the concerns likely to be caused by implementation here on the Touchstone blog.
Government ministers are doing all they can to promote their far reaching welfare reforms as the best thing since sliced bread, but others like Johnny Void rightly asks the question are the wheels falling off Universal Credit?; yes Johnny they are and spectacularly so. Naturally all the negativity which surrounds these reforms is dismissed as left wing propaganda; heaven forbid anyone who casts scorn on the whole sorry saga due to hit us soon. Actually I would love to see welfare reform work because I see the casualties of it every day, those that have constructed these flagship reforms simply haven't got the first clue as to the devastating effects they are going to have on people's lives. I'm not just talking about benefit claimants either, take a look at what the HMRC is going to inflict upon employer's when it brings in a requirement to supply monthly information about their worker's wages with the introduction of 'Real Time Information'; it's central to Universal Credit that information is collected about people's wages as they are assessed in new assessment phases; heaven help those who are self - employed or who have variable wages or more than one employer.
We've only recently seen the introduction of the draft regulations for the revised Employment and Support Changes, Universal Credit and Personal Independence Payment. For a government committed to 'less legislation' it's simply astounding how this has escalated into such a confusing array of legislation which is bound to be problematic when aligning it to that which is already in place. If you are brave enough to work your way through the draft regulations you can access the links here on Mylegal. The DWP has opened it up to another purported 'listening exercise' - I feel compelled to make my usual response but I ask myself is it really worth the bother when Government shows itself time and time again to be so incredibly hard of hearing. If you want to make a response time is limited; a day or so when I last looked.
But the worst is yet to come, yes it gets worse; once again all that's rotten to the core is kept well and truly quiet. On another relentless internet trawl I happened to stumble across this 'explanatory memorandum' for the Social Security Advisory Committee. Our ministry of justice has us welfare benefit specialists down as mere 'generalist advisers' who just fill in benefit forms; in reality of course we know far more about this than government wants us to pass on to our clients. That's why I thought I'd look for the intended amendments in what are known as the 'Claims & Payments Regulations'. This is the legislation by which a determination is made over how claimants will actually be paid. The explanatory memorandum reveals some truly alarming changes (these require a more in depth analysis) but you'll get the gist of which way this is headed and the potential problems which may arise:
Claimants will receive their payments using a bizarre combination of monthly payments in arrears. Some elements of the individual Universal Credit will be based on a 'four week' month and others will be calculated upon the basis of a 'calender' month. Imagine the chaos as claimants go from weekly or fortnightly to monthly payments?
The vast majority of claims will be made on - line or via the telephone. Personal Independence Payment claims will be made on-line with advice agencies no longer being stocked with paper claim forms; - all very well for those able to make a claim electronically, some claimants will not be able to independent access to help over the completion of their claims as the on-line process will exclude them from taking it along to an agency who could advise upon the contents, other claimants will simply struggle with the technology aspect.
The identities of on-line & telephony claimants will need to be verified by 'secure means' to validate claims; - what will these security measures entail?
Couple claimants will have to agree a joint responsibility commitment before their claim can be made. With one payment being made the couple will have to agree which account the money goes in if they hold separate accounts. There is strong presumption that couples claimants have joint accounts and freely share their financial arrangements; - how practical is this for many couples in conflict or who choose not to share their finances?
Claimants will be expected to 'budget' their money and rent payments will not be made directly to landlords (unless there are exceptional circumstances - in which case claimants will be 'screened' over their financial capability). Problems may be experienced if a payment lands on a due date over a weekend or on a bank holiday - with potential chaos if direct debits are not met in aligning payments.
The expectation is all claimants will have bank accounts, this isn't always possible where people are in debt and find it impossible to set up an account if they are in an insolvency situation.
'Posthumous' payments will no longer be made; affecting the bereaved.
Polygamous marriages will no longer be recognised.
A potential misalignment situation arises where claimants have separate reporting duties to a Local Council over their Council Tax benefit and their separately administered Universal Credit claim. What if the Council uses a different weekly earnings figure to that used in the calculation of Universal Credit?
What about appeal situations, how will claimants have their Universal Credit calculated whilst waiting for their appeals and then credited with retrospective awards if they are successful?
Does the use of assessment periods mean that claimants are unable to appeal the amounts used on the basis that the award is only 'provisional' until their award has been finalised? - this could potentially mean claimants are underpaid until their award is reconciled following the assessment period. Clarification is needed over rights of appeal during the process of assessment and what rights claimants will have to dispute amounts said to be recoverable in overpayment cases.
What will happen in cases where claimants are on the contributory elements of Employment & Support or Jobseeker's Allowance and thus sit 'outside' of the Universal Credit but who may become entitled to the income based variant upon expiry of their contributory period or who have an underlying entitlement with the inclusion of housing costs (mortgage) after any waiting period expires - how will they be identified?
In cases where an employer fails to supply accurate monthly wage information via the HMRC Real Time Information portal and an overpayment is subsequently incurred will the employer become liable for the overpayment on the grounds that they contributed to the mistake and the claimant has no reasonable prospect of knowing an overpayment has occurred?
Curiously page 13 mentions that some cases will be referred to a 'human decision - maker', is there a new breed of decision - maker which is not human?
Deductions of up to 40% can be made from a Universal Credit claimant's standard allowance; - there seems to be no provision for ensuring that this has not been checked against a direct deduction from an employee's wages with potential risk of 'double recovery'.
Reactions anyone?...
Maybe Ken Clarke could give us an answer?