DWP ‘anticipates’ that coronavirus-related increases in universal credit will not significantly alter proportion of claimants affected by benefit cap

Response to Work and Pensions Committee says its assessment relies in part on many new claimants having a sustained employment record so they avoid the cap due to nine-month ‘grace period’

DWP Ministers have said they 'anticipate' that coronavirus-related increases in universal credit will not significantly alter the proportion of claimants affected by the benefit cap.

In a letter published yesterday (although dated 15 May 2020), DWP Ministers Justin Tomlinson, Will Quince and Mims Davies provide updates on issues including disability and sickness benefits, universal credit and the benefit cap in response to written requests from the Work and Pensions Committee for further information on matters raised in its oral evidence session on the DWP's response to coronavirus.

In relation to the benefit cap, the Ministers explain how the Department has reached the conclusion given in oral evidence that the number of people who will be affected by the benefit cap - and therefore unable to benefit fully from the coronavirus-related increases in benefit and LHA rates - will be ‘very small’, saying that -

‘As of February 2019 (the latest statistics available at that time of the oral evidence session) there were 46,000 capped households receiving universal credit, in contrast to a universal credit caseload of 2.3 million. The cap applied to only 1.7 per cent of the overall universal credit caseload.

The Department will publish characteristics of the new claim cohort as part of its standard statistical release cycle, however, we anticipate interaction with the benefit cap will be broadly consistent with previous trends. We also anticipate that many new claimants will have a sustained employment record, and therefore will be eligible for the nine-month grace period…

… The cap may continue to apply to other claimants but the government has quickly and effectively introduced over £6.5bn of measures that targeted support at those facing the most severe financial disruption.’

NB - the Ministers did not respond to the Committee’s supplemental benefit cap question, that asked for the Department’s view on analysis carried out by St Mungo’s that suggested that single people living in one-bedroomed flats in many areas of London will see their benefits reduced due to the cap.

In relation to other matters raised by the Committee, the Ministers provide updates including that -

• for personal independence payment (PIP) and employment and support allowance, ‘companions’ are able to join telephony assessments to assist the claimant, and there is no policy to delay or suspend payment of new claims;
• easements have been introduced providing more time for individuals to complete and return forms - such as the time required to return a PIP2 form being extended to 3 months;
• for self-employed universal credit claimants who have more than £16,000 capital, the Department will contact them ‘to understand their circumstances and determine eligibility’ if this money is to be used for business purposes;
• the Department is looking carefully at the situation of those who apply for universal credit during the COVID-19 crisis, only to lose their working tax credit, and with it any future entitlement to transitional protection; and
• new guidance has been issued to work coaches in relation to the Flexible Support Fund that includes an email process to confirm upfront childcare costs with providers to avoid delay in these payments through the Fund.

The Ministers' joint response to the Work and Pensions Committee (including the Committee’s letters to each Minister) is available from parliament.uk