Universal Credit

“There is no questions that Universal Credit is the most significant change in over 60 years.” Addressing the Northern Ireland Housing Conference, Tommy O’Reilly, Deputy Secretary at the Department for Communities, spoke on the practicalities of its implementation.

Universal Credit (UC) is intended to replace a series of social welfare benefits including Jobseeker’s Allowance (income-based), Child Tax Credits and Housing Benefit (rental). The new single benefit payment will be available to working aged people (18-64) whose income falls below a certain level and it will be processed twice a month. In exchange, claimants have work-related conditions as part of a commitment that must be signed before receipt of UC. The stated intention is to ensure that being in work is more financially viable than being in receipt of benefits.

In Great Britain, O’Reilly outlines: “Many employers across different sectors are starting to see their staff taking up increased workloads where UC full service is rolled out.” One incentive of UC is the provision of 85 per cent of all childcare costs for working age families.

The Department for Communities is working alongside the Department for Work and Pensions (DWP) in London to synchronise the roll-out in Northern Ireland. UC will be phased in on a geographic basis, starting with Limavady in late September 2017 and concluding with Cookstown, Ballynahinch and Newcastle by September 2018. Once a job centre has been designated a UC office, new claimants living in the postcode areas covered by the office will no longer be able to make a fresh claim for any of the legacy benefits, including housing benefit. The offices are grouped together in clusters and they will be supported by service centres in Foyle, Newry and Belfast.

It is estimated that around 300,000 households will be affected. Analysis provided by the Department for Communities projects that 126,000 households will be an average of £39 worse off per week, 114,000 will experience an average increase of £26 per week, while 72,000 will not encounter any change.

Aside from the four Standard Allowance rates, which are dependent on age and whether an individual is part of a couple, an additional amount known as an ‘element’ may be applicable. For example, the Housing Element is a payment to help cover relevant housing costs and, if an individual is leasing a property, it will be paid directly to the landlord unless a request is made to the contrary.

 “The position of the Northern Ireland Executive is that the payment should be made directly to landlords and therefore should remove many of the concerns expressed by the private sector and social landlords around increased levels of debt and additional costs of rent collections. Northern Ireland has the reverse position to that of Great Britain in that there are only 20 per cent of people who are receiving their housing benefit directly. Where an individual makes a request to receive the housing element directly under UC, it will be for the staff in the UC service centre to make a decision as to whether that will happen based upon a specific criterion,” O’Reilly explains.

Current projections indicate that it will be March 2022 before all the current housing benefit claimants will be migrated to UC. From the experience in Great Britain, O’Reilly suggests: “It is evident that the communication channels with landlords were not working effectively. In Northern Ireland, we will learn from that experience. One of the lessons that has been learned in DWP is the need to try to accelerate the landlord portal demanded by representative groups.”

Furthermore, “Where a claimant’s entitlement to UC is less than the rental liability, the entire UC payment will be paid to the landlord and any remaining shortfall will be the responsibility of the claimant. This was a decision taken by the Executive at the early stages of welfare reform and was intended to protect the tenancy,” O’Reilly notes.

The working assumption within the UC programme in Northern Ireland that the Local Housing Allowance will be legislated for in the coming months and before UC rolls out in September. The Deputy Secretary maintains: “There would be significant operational implications for UC in Northern Ireland if we don’t get the legislation passed in advance as there are no contingency plans currently to either develop a new IT system to make housing benefit type payments in Northern Ireland or to ask DWP to adjust the UC system in order to incorporate housing benefit payments for Northern Ireland.”