Debate contribution: Universal Credit: Five-week Wait

Debate contribution by Mr Gordon Lyons on 11 February 2025.

MLA

Mr Gordon Lyons

Party at the time

Democratic Unionist Party

Date

11 February 2025

Type

Debate contribution (made as a minister)

Business

Private Members' Business

Heading

Universal Credit: Five-week Wait

Assembly identifier

Official Report component 4793456

Read the official Assembly record

Text

Thank you very much, Mr Deputy Speaker. I thank all who contributed to the debate this morning. The implementation of universal credit has necessitated that claimants in receipt of the older legacy benefits move across to a new system, and that presents challenges. I am committed to my Department doing what it can to help not only people migrating to universal credit but those who are claiming it for the first time. Universal credit is assessed and paid monthly. That means that new claimants must wait until the end of their first month before they receive their first payment. That is what leads to the five-week wait. The approach of paying benefit in arrears is a common feature of the social security system, including the legacy benefits. However, the change to assessing entitlement monthly, as opposed to weekly or fortnightly, is a new experience for many. Therefore, I acknowledge and share the concerns raised about the five-week wait. I fully understand how any delay in payment can put additional pressure on individuals and families at what is already a difficult time. Members will know that social security operates on the parity principle, and there are a number of UK-wide measures in place to tackle the impacts of the five-week wait. Claimants who are moved to UC from legacy benefits will be entitled to a two-week run-on. That means that they will continue to receive their payments of legacy benefits for two weeks after they move across to universal credit, which helps to alleviate the initial impact of moving to a monthly payment. It is paid automatically, and it does not need to be repaid. New claimants can also apply for an advance of their first payment of universal credit, providing up to 100% of their potential UC entitlement to help ease the transition to the new benefit. This facility is offered to every person claiming UC for the first time as part of the transition from a legacy benefit. The advance payment is in the form of an interest-free loan and is usually repaid over 24 months. A UC advance is also available to claimants who were not previously in receipt of a legacy benefit, where they are experiencing financial difficulty. Under the principle of parity, it is not possible for Northern Ireland to make changes to the UC system without absorbing the associated costs and administrative burdens. However, outside the system itself, my Department does offer other assistance, including some measures that are specific to Northern Ireland that can help to alleviate hardship during the five-week waiting period. First, my Department administers the universal credit contingency fund, which is a non-repayable grant for families and individuals specifically aimed at alleviating financial difficulties while they wait for their first full payment of UC. It was paid to over 11,000 people during 2023-24, providing that necessary support during the waiting period. In total, we have awarded £3·5 million, with an average payment of £313. Overall, approximately 76% of applicants received a payment. As demand for the contingency fund grant increases, so too does the cost. With that in mind, my Department increased the budget allocation for the contingency fund to over £6·1 million in 2024-25. Claimants are not required to take an advance payment of universal credit before accessing the contingency fund grant, and UC staff actively encourage new claimants to avail themselves of the grant as an alternative to the repayable advance payment. Some claimants may choose to avail themselves of both the contingency fund grant and the advance payment facility. Information on the contingency fund is featured prominently in the welcome message of the claimant's journal for those who have made a claim to universal credit, and that includes a link to the nidirect information page for the grant. Applications are available online and can be made 24/7. People who, for any reason, are ineligible are considered for all other provisions available through the discretionary support scheme in order to maximise their potential to receive an award. The Department regularly promotes the contingency fund scheme and most recently ran an advertising campaign for claimants moving from legacy benefits to UC, which included signposting to the fund. A number of channels were used in the campaign to maximise its reach, including national and regional press as well as digital and social media. We also promote the scheme through the advice sector and highlight the contingency fund in universal credit migration notices. Posters were sent to the independent advice sector in spring/summer 2024 for its use in promoting the discretionary support scheme, including the contingency fund. To further assist with accessibility and ensure that the range of support available is clearly explained, the finance support campaign page on nidirect includes a specific page relating to the contingency fund. Secondly, through the adviser discretion fund, my Department can provide a non-repayable grant of up to £1,500 to help a claimant with costs associated with entering employment — for example, having to pay upfront childcare costs or purchase clothing or equipment needed to begin work. Work is the greatest tool that we have to break the cycle of poverty and is the best route to financial independence. This helps benefit claimants get into work. I will turn to the amendments to the motion. On the changes proposed under the first amendment, Members will be aware that the independent report on welfare mitigations recommended that the universal credit contingency fund should be renamed to "universal credit new claims payment". That was one of several recommendations made in relation to providing additional financial support to those waiting on their first full UC payment and promoting the availability of such support. We have engaged with external stakeholders on that issue and invited further suggestions for a new name for the universal credit contingency fund. Plans to change the name are being taken forward. That involves changing notifications and information on nidirect and universal credit journal messages, and it is expected that the changes will have been rolled out by the end of the financial year. The independent report on discretionary support made other recommendations regarding the contingency fund, and these will be considered as part of an overall review of discretionary support. However, any additional costs will have to be assessed in the current financial climate, taking into account other priorities across the Department and the requirement to ensure that budgets remain sustainable over the coming years. The second amendment acknowledges the valuable support available under the two-week run-on and the advance payment facility. As I have noted, those measures provide crucial help to claimants while they wait for their first payment of universal credit. They are statutory provisions that apply to the whole of the UK, and I certainly support their retention. Given the package of support that is already available to alleviate any financial pressures caused by the five-week wait, there is, on balance, help available to meet the needs of claimants, based on their individual circumstances. I hope that no one will be in the position of having to wait for five weeks without receiving any support. I am content, however, to engage further and to consider additional measures or action that Members feel would be beneficial to bolstering the support that is already available or to publicising better the measures that are already in place. I have certainly noted the comments that Members around the Chamber have made today. If anyone has any further comments, we will, of course, take them on board. I hope that the Assembly notes my desire to make sure that we make things as easy as possible for people and provide the necessary help. I will not be found wanting when it comes to engaging with others and working with officials to make sure that we do everything in our power to help those in need.

1,309 words. Text as published by the Northern Ireland Assembly.

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