Ministerial Correspondence Caxton House Tothill Street LONDON SW1H 9DA

Our Ref: TO/13/19581
9 July 2013

Dear Mr Brooking Thank you for your recent correspondence, raising issues about Universal Credit which are the responsibility of this Department. Government Ministers receive a large volume of correspondence and they are unable to reply personally on every occasion. I have been asked to respond. Universal Credit provides support to claimants who are ‘in work’ as well as to those who are ‘out of work’. So the need to claim different benefits when working 16 hours or more disappears. This reduces the risks associated with moves to employment that exist in the current system of benefits and tax credits. Universal Credit allows people who work to keep some of the money that they earn before it has any impact on the amount of Universal Credit they receive. This amount is called a Work Allowance. In Universal Credit different work allowances apply to different types of household in order to reflect their different needs. The work allowances are generally more generous than the amounts disregarded in the current system, in particular for families with children and disabled people. Once a person is earning more than their work allowance, we begin reducing the amount of their Universal Credit. Universal Credit has a single taper rate of 65 per cent. We want people to see their income increase when they start working or earn more, so we reduce the Universal Credit award by less than they are earning. Although their Universal Credit award reduces, their income will still increase. For people who are working, financial support is reduced at a consistent and predictable rate and they generally keep a higher proportion of their earnings.

It will be much easier for people who are working or who are considering a job to see clearly how much financial support they will receive and to understand the advantages of work. Universal Credit will significantly improve the take-up of unclaimed entitlements, because all elements of support are applied for through a single process. It will be easier for people to understand the level of benefit to which they are entitled. About claiming, Universal Credit provides a real opportunity to tackle digital exclusion. Research suggests that 92 per cent of advertised vacancies require applicants to have basic IT skills, and therefore those without such skills are considerably limited in their employment prospects. Furthermore, we want to give claimants greater control over managing their account. To achieve this, the main route to access Universal Credit is through digital channels. This will free up more adviser time to deliver valuable face-to-face support for those who need it and help to get people into work. This does not, however, mean that the Government are removing other channels for claiming benefits. As noted in Government’s statement on assisted digital services in December 2012, people continue to be supported in interacting with the Government even if they are unable to access services online. We offer claimants the option to claim via telephone or in person, which includes the provision of assisted or one-to-one support. We are installing Internet Access Devices (IADs) in our Jobcentres to help support those who do not have home access to the internet. At present, 706 sites have had IADs installed. In total this will provide 2167 new IADs for our customers. Jobcentre staff are available to provide claimants with any assistance required in using these devices. We are also exploring the idea of providing WiFi access in Jobcentres, as well as having tablets and laptops available for claimant use. Our target is that 50 per cent of claims that can be online will be made online, in October 2013 when Universal Credit is launched nationally. In addition to that, we initially envisage around 45 per cent of claims to be made via telephone, and 5 per cent face-to-face, with a home visit where necessary. The Government believes this target is achievable as a survey of existing benefits and tax credit recipients found that 78 per cent already use the internet and, of these, 41 per cent carry out online banking, a transaction considered similar to claiming Universal Credit. Indeed, our latest figures show that more than 51 per cent of Jobseeker's Allowance (JSA) claims received by the Department are now made online. We expect the proportion of online claims to build up as people are supported to use the new system and as we gradually build up the functions and applications that people can access online.

Our target is that 70 to 80 per cent of claims that can be on-line will be made on-line by the end of 2017 and a plan is being developed to support this channel shift. This is based on insight into current claimant attitudes and behaviour regarding the use of online services. We are also learning from the experience of increasing JSA online take up and the outputs from six JSA online Trail Blazer pilots currently underway, these continue to assess the most effective approach to encouraging claimants to go online. We are also working across Government to assess initiatives that have the potential to support the increase in take up of online services. This plan is being designed alongside migration planning to enable design and development of the right support at the right time. On 11 February the Department published the Universal Credit Local Support Services Framework, which sets out arrangements for ensuring that adequate support will be in place from October 2013. The Framework provides a structure for planning integrated localised claimant support for people who need extra help to make or maintain a claim for Universal Credit. This support includes assisting claimants to claim Universal Credit and manage their account online. The objective is to move claimants to a position where they can independently use the standard Universal Credit service, whilst ensuring that we have adequate services in place to support the minority of claimants who may need extended support. The overall aim is to move towards a reduction in claimant volumes, and the demand for local support, over time. We are using learning from the Pathfinder, and from other pilot and testing activities to revise the framework and will issue a more comprehensive version of the framework by October 2013, in time to inform LA budget planning for the 2014-15 financial year.
Yours sincerely

Goff Daft Head of the Correspondence Team

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