My Lords, I am most grateful to the noble Baroness, Lady Lister, for explaining her amendments, which relate to the operation of the welfare system, including universal
credit, and its impact on victims of domestic abuse. The Department for Work and Pensions is committed to providing a compassionate welfare system which provides the best possible support for all customers, including the most vulnerable in society, such as victims of domestic abuse. In answer to her question, we have regular discussions with the DWP and other government departments on domestic abuse because we see it as a whole-of-government issue and response.
Amendment 34 would place a legal duty on the domestic abuse commissioner to investigate one particular issue—the payment of universal credit separately to members of a couple—and lay a report to Parliament. I will come on to the substance of the concern about universal credit, but it is worth first making an observation about the approach taken in the amendment. My noble friend Lady Chisholm of Owlpen said that, as an independent office holder, it should be for the domestic abuse commissioner to set her own priorities as set out in her strategy plan, as provided for in Clause 13. I submit that we should not be mandating her to produce a report on universal credit or on any other matter, as is consistent with her title of being independent.
Aside from this question of the commissioner’s independence, I share absolutely the noble Baroness’s determination to support and protect victims of domestic abuse through the welfare system. However, on the underlying substance of the amendment, the Government do not believe that introducing split payments of universal credit between couples by default is appropriate. For many legacy benefits, a payment is already made to one member of the household, so the way that universal credit is paid is not a new concept. Additionally, evidence shows that the great majority of couples keep and manage their finances together. Consequently, most couples can and want to manage their finances jointly without state intervention.
We recognise that there are circumstances in which split payments are appropriate. Where a customer discloses that they are a victim of domestic abuse in an ongoing relationship, then, where suitable, the Department for Work and Pensions can make split payments available to provide them with access to independent funds. It is important that we allow the individual experiencing domestic abuse to decide whether split payments will help their individual circumstances. The department will also signpost individuals affected by abuse to specialist support, and work with them to ensure that they are aware of the other support and easements available under universal credit. These include special provisions for temporary accommodation, easements to work conditionality, same day advances and additional support for children conceived during an abusive relationship.
In July 2019, messaging was introduced to the universal credit digital claim system to encourage claimants in joint claims to nominate the bank account of the main carer for payment. We continue our support of payment of universal credit to the main carer through this messaging. This strikes the right balance between encouraging positive behaviour and allowing claimants to choose how to best manage their finances. A move to split payments with all couples would represent a
fundamental change to the principles of universal credit. Operational challenges aside, the proposed change in policy would be inappropriate for some vulnerable people, for example where one partner is a carer for the other, or one partner has addiction issues.
There would also be practical challenges. For example, there are 1.3 million unbanked adults in the UK, and most are on a low income or are unemployed. The Government are working to improve financial inclusion, but it remains that a move to split payments by default could result in unnecessary payment delays for unbanked claimants. A split payment by default model might also reduce financial independence for women in some cases. Analysis suggests that about 60% of joint universal credit payments are made to women.
As I said, the Department for Work and Pensions is committed to providing a safety net welfare system that provides the best possible support for all customers, including the most vulnerable. To answer the noble Baroness, Lady Lister, that is why the department has completed a significant training programme and implemented domestic abuse single points of contact for every jobcentre. These actions will help ensure that jobcentre customer services managers and work coaches have the right capabilities, tools and local relationships to support customers who are experiencing or fleeing domestic abuse. We are proud of the positive cultural change we have been able to achieve in jobcentre sites; and that departmental awareness of, and support for, those who have suffered or are suffering domestic abuse is better than ever.
I understand the intention of Amendment 150 is to ensure that victims of domestic abuse can receive universal credit advances in the form of grants. I note that the amendment affects the conditions only for the payment of budgeting advances. Budgeting advances provide one-off emergency payments for claimants or are related to obtaining or retaining employment, whereas new claim and change of circumstances advances provide claimants with an advance of their UC award. As currently drafted, the amendment will waive only the recoverability and eligibility criteria of budgeting advances for domestic abuse victims.
The Department for Work and Pensions offers new claim advances that allow claimants to access 100% of their estimated universal credit payment up front. We can help claimants, including victims of domestic abuse, to apply for an advance with payment being made within 72 hours or even on the same day, in some circumstances. With a universal credit advance, a claimant’s universal credit award will be phased across 13 payments in a year, rather than 12, and the maximum level of monthly deduction they will face is 30% of their standard allowance. Deferrals are also available for the phasing of new claim advances, meaning that claimants can extend the phasing of their 13 UC payments for up to an additional three months, in exceptional circumstances.
In addition, change of circumstances advances are available to claimants where a change of circumstances, such as the birth of a child, means that their universal credit award will significantly increase in the next payment. The additional payment of a change of circumstances
advance would be used to cover the additional costs incurred by claimants until they receive their increased UC award at the end of their assessment period. These advances are phased across six months.
This amendment also seeks to make budgeting advances non-recoverable for victims of domestic abuse, alongside removing eligibility criteria. Budgeting advances are available to purchase one-off emergency items or for obtaining or retaining employment. To be eligible, claimants must have been in receipt of benefits for six months, have repaid any existing budgeting advance amount and earned less than £2,600 in the previous six months, if a single claimant. For claimants who receive a budgeting advance to obtain or retain employment, the six-month benefit criteria are waived and the required earnings threshold recalculated. This one-off payment of a budgeting advance is recovered over 12 months, although this can be extended to 18 months in exceptional circumstances.
If the Government were to issue universal credit advances as grant payments for victims of domestic abuse, as suggested by the noble Baroness’s amendment, this would raise equality concerns and inevitably lead to calls for the measure’s extension to other groups. Moreover, to mitigate the potential of increased fraud that universal credit grants could cause, we would have to introduce an additional manual assessment to verify the claimant’s circumstances ahead of payment. This could delay payment to claimants, when our first priority should be to urgently give individuals support.
Moving on to the other feature of the amendment, the Government do not feel that we should waive the eligibility criteria for budgeting advances. These eligibility criteria include a low-income threshold because we believe that, in the majority of situations, a claimant’s universal credit award will be able to cover the costs of emergency items. However, to support those in particular hardship, budgeting advances provide one-off payments for claimants who may not be able to afford these emergency items without additional support.
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The condition of being able to claim only one budgeting advance at a time is to protect our claimants and prevent additional fraud in universal credit. If claimants were to take out multiple budgeting advances, they would face recovery payments taken from their universal credit awards for a potentially longer period. We would also see increased efforts to obtain budgeting advances fraudulently if individuals could claim several at a time.
It is important to note the changes that the Government will make to the advances policy to smooth the universal credit journey for all claimants. From October this year, we will give claimants the option to phase their universal credit payments across a longer time. Claimants will be able to phase their universal credit payments over 24 months rather than 12, giving them more flexibility over the allocation of their UC award. Moreover, to support those on universal credit to repay debts in a more sustainable way, the normal maximum level of deductions that can be taken from a household’s universal credit award will be further reduced to 25% of a claimant’s standard allowance from October.
Amendment 152 seeks to provide for survivors of domestic abuse to be exempt from the application of the benefit cap for 12 months when a universal credit claim is being considered. The benefit cap seeks to restore fairness between those receiving benefits and taxpayers. It provides an incentive to move into work where possible. There is clear evidence that work, particularly full-time work, substantially reduces the likelihood of being in poverty; children in workless families are around three times more likely to be in poverty, compared to families where at least one adult works. As the noble Baroness is aware, the likelihood of a survivor having the benefit cap applied is already reduced, because of the exemptions in place to provide breathing space while people stabilise their situation. For example, where housing benefit is paid in respect of a person in a refuge, it is excluded from the calculation of the benefit cap.
Claimants who need additional support to meet rental costs can approach their local authority for a discretionary housing payment, as outlined by the noble Baroness, Lady Primarolo. Over £1 billion in discretionary housing payments has been provided to local authorities since 2011; £180 million in discretionary housing payments is available for local authorities to distribute in 2020-21; and £140 million will be made available through discretionary housing payments for the next financial year, 2021-22, the same as in 2019-20. The Department for Work and Pensions produces guidance to help local authorities administer the discretionary housing payment scheme. This guidance suggests that DHP support should be prioritised for the most vulnerable; it specifically cites households with young children and those fleeing domestic abuse.
Finally, Amendment 153 would require the Department for Work and Pensions to assess the impact of welfare reforms on victims of domestic abuse. This amendment is also in the name of the noble Lord, Lord Rosser. The DWP is already obliged to consider the impacts of its policies through equality assessments, in accordance with the public sector equality duty. Changes to welfare regulations will involve consideration of the likely impact of those changes. Furthermore, the department consistently reviews and is striving to improve services.
If I may, I will write to the noble Baroness, Lady Bennett, on her point about child benefit. On the question from the noble Baroness, Lady Lister, about the sanctuary scheme as related to the spare-room subsidy, the Government recognise the important role that this scheme can play in a victim’s long-term safety and well-being. Work is under way to establish what steps are necessary to support claimants who live in a sanctuary scheme property and are affected by the removal of the spare-room subsidy. Discretionary housing payments continue to be available, at the discretion of local authorities, for claimants who need additional financial support towards housing costs. We have provided guidance for local authorities to recommend that, where a claimant lives in a sanctuary scheme, that is considered when deciding whether to award a DHP.
In conclusion, the Department for Work and Pensions is committed to providing a welfare system that provides the best possible support for all customers. That includes universal credit claimants and the most vulnerable in society.