Twice monthly payments
The clear majority thought the draft regulations do meet the policy intent of offering a choice to applicants on having their UC payments made twice monthly.
The most frequently-raised issue concerned the payment of UC being in arrears and the time periods associated with the first payment being made for a new claim.
Another frequently raised issue concerned how the twice monthly split would be applied. The most-frequently made suggestion here was that fortnightly rather than twice monthly payments should be considered.
The importance of making claimants aware of the twice monthly payments option was stressed by a number of respondents
A number of respondents commented on, and sometimes expressed concern about, the apparent absence of any right or route to appeal a decision not to allow twice-monthly payments.
As the consultation paper notes, the changes (on twice monthly payments and payment of rent direct to landlords), are intended to provide more choice and control over Universal Credit ( UC) payments. Neither option will affect the overall amount of UC that is payable and both will be delivered by the Department for Work and Pensions ( DWP) as part of that Department's overall responsibility for delivering UC. These changes will also not replace the DWP system for Alternative Payment Arrangements which will continue to operate for those who fall under the current criteria of requiring this, for example as a result of a vulnerability or rent arrears.
The regulations set out the arrangements by which UC will be assessed on a monthly basis but, in Scotland, applicants will have the option of receiving payments twice monthly in order to help with their household budgeting. The first question asked respondents if they thought the draft regulations meet the Scottish Government's policy intent regarding twice monthly payments.
Question 1: Do the draft regulations meet the policy intent of offering a choice to applicants on having their UC payments made twice monthly?
Responses by respondent type are set out in Table 2 below.
Table 2: Question 1 - Responses by type of respondent
|Type of respondent||Yes||No||TOTAL|
|Campaign Group or Third Sector organisation||10||2||12|
|Registered Social Landlord||19||1||20|
The clear majority of respondents thought the draft regulations do meet the policy intent of offering a choice to applicants on having their UC payments made twice monthly. A total of 12 Local Authority, Campaign Group or Third Sector organisation, Representative Body and Registered Social Landlord respondents disagreed.
Sixty-six respondents went on to make a further comment at Question 1. Of those commenting, 55 had answered 'Yes' at Question 1 and 11 had answered 'No'.
A number of those who agreed went on to make only a short statement of support which often focused on the importance of helping people to budget, and on putting in place measures which help avoid financial hardship.
Otherwise the focus of the comments was similar for those who had agreed or disagreed at Question 1. A single analysis of all these comments is presented on a theme-by-theme basis below. The most frequently-raised issues are presented first and tended to be raised by around 8-10 respondents. The latter part of the chapter covers issues raised by smaller number of respondents (around 4 to 7 respondents unless otherwise stated).
Payment in arrears
The most frequently-raised issue concerned the payment of UC being in arrears and, in particular, the time periods associated with the first payment being made for a new claim. This issue was raised primarily by Local Authority and Registered Social Landlord respondents but also by a Representative Body respondent.
It was seen as important because of the fundamental impact it can have on UC claimants. For example, a Representative Body respondent explained that it can be in excess of 6 weeks before a new claimant will receive their first payment. They were amongst those concerned that the move to twice-monthly payments will not ameliorate this and that, while twice-monthly payments may help in the longer term, they will not address the particular hardship issues associated with the early stages of a claim.
A Registered Social Landlord respondent was one of those to express a specific concern that the twice-monthly payment approach would mean the first payment would be a reduced amount, leaving claimants even less well placed to manage and in particular to address any rent arrears that had built up. With reference to rent arrears, another Registered Social Landlord respondent was amongst those noting that like many other social landlords they charge rent monthly in advance and that this means that by the time the tenant receives their first UC payment they could be a full two months in arrears.
A Representative Body respondent and a Local Authority respondent were amongst those calling on the Scottish Government to introduce a top-up benefit to support claimants over the waiting period before the first UC payment. Failing that, the Representative Body respondent urged the Scottish Government to press for the offer of advance payments to be a default option.
Another frequently raised issue concerned how the twice monthly split would be applied, and in particular:
- How it would relate to 2-week periods.
- How the regulations would be adjusted to a 5-week month.
The most-frequently made suggestion here was that fortnightly rather than twice monthly payments should be considered. A Campaign Group or Third Sector organisation respondent suggested that this would not only allow the amount of the payment to remain the same but also would be easier for the claimant. This respondent went on to request that, if the fortnightly option is not possible, then there could be set dates that would be applicable from month to month and which would assist the claimant with budgeting. However, they also requested that there was no postcode attachment (or similar pattern) used to apply payment dates since others knowing when they will receive a payment can create problems for vulnerable claimants. Other suggestions included offering weekly payments.
Other points made about the frequency of payments focused on the how the payment frequency for UC will relate to the timescales for making payments direct to landlords. One of the Local Authority respondents raising this issue noted that the draft regulations do not clarify if, as a consequence of having UC payments made twice monthly, the claimant's landlord will automatically be paid the UC housing element direct, with the remaining UC paid as appropriate as is the existing Alternative Payment Arrangement.
Finally, a Local Authority respondent noted that the Regulations will cover any future changes to frequency of payments and that it would be helpful to clarify under what circumstances such changes might be made.
The importance of making claimants aware of the twice monthly payments option was stressed by a number of respondents, with a Registered Social Landlord respondent suggesting that current options, such as a 'Benefit Advance', have not been adequately promoted. A Representative Body respondent suggested that it is not clear whose duty it is to advise claimants of their right to request twice-monthly payments or have their UC housing element paid directly to the landlord. A Local Authority respondent suggested that the regulations should specify that the Secretary of State is responsible for making Scottish claimants aware of their rights. A Campaign Group or Third Sector organisation respondent also suggested that further clarity is required as to who will make information available, how the information will be communicated and at what point in the claim process.
For the legislation to be effective, a Health respondent highlighted that claimants will need to be made aware that these flexibilities exist, in a consistent way, regardless of how they access UC. A Campaign Group or Third Sector organisation respondent suggested that claimants should be informed of their right to request twice-monthly payments at the start of their claim but also intermittently throughout the period of their claim. Asking questions in the application and having simple ways to make requests on online accounts was suggested by a Registered Social Landlord respondent.
Right to appeal
A number of respondents commented on, and sometimes expressed concern about, the apparent absence of any right or route to appeal a decision not to allow twice-monthly payments. The general concern was that while the draft Regulations require the Secretary of State to provide reasons for denying a request for twice-monthly payments, there is nothing which would allow the claimant to request a review of or appeal against the decision. A Campaign Group or Third Sector organisation respondent suggested that this could be seen as contrary to the principles of natural justice, and to the Scottish Government's wider stated aims of ensuring that the Scottish social security system is based on the principles of dignity and respect.
A Local Authority respondent suggested that it should be explicit within the regulations that Scottish claimants have the right to request a review of the Secretary of State's decision.
Circumstances for refusal
On a connected point, some respondents commented that there is no indication of the test which will be applied by the DWP when considering this request and nothing in the draft regulations to clarify the circumstances under which a request is likely to be granted or denied. A number of respondents felt that, if there are to be circumstances when a claimant may not receive twice-monthly payments, then these should be set out.
A Campaign Group or Third Sector organisation respondent and a Local Authority respondent suggested that, as currently drafted, the Regulations imply that a claimants' request can be refused for any reason, as long as that reason is communicated. Another Campaign Group or Third Sector organisation respondent felt it should be clear that there could be refusal based on individual circumstances. Other respondents also noted or appeared to assume that any refusal would be based on the circumstances of the claimant. The types of circumstances put forward as possibly applying included:
- If twice-monthly payment would not be in the interests of the claimant or a member of their household.
- Where there is dispute within the relevant household as to whether UC payments should be paid monthly or twice monthly.
There were comments about the implementation of the twice-monthly payment regulations. These were varied but included that:
- It is not clear to whom a request for twice-monthly payments is made, nor how it can be made.
- For online claims, changes to any online forms may be required.
- Given the likely negative impact on claimants, delays in processing the request for twice monthly payments must be avoided.
Wider issues relating to implementation of both the changes are discussed further at Question 2 below.
Relationship to Alternative Payment Arrangements
A small number of respondents commented on the relationship between the UC provisions and the existing Alternative Payment Arrangement provisions. In particular, clarity was sought as to whether claimants who are currently in receipt of an Alternative Payment Arrangement would not be permitted a choice over how frequently they receive UC payments.
A Campaign Group or Third Sector organisation respondent sought clarification as to how the two separate systems of accessing twice monthly payments will operate together in practice. They particularly called for there to be a clear process in place for new claimants who wish to access twice-monthly payments.
Finally, a Representative Body respondent welcomed the requirement for UC claimants to be informed about the implications of a request for more frequent payments. They felt that it is not clear why this information would not be given to claimants who already have an Alternative Payment Arrangement in place, especially since under the current UC system, all Alternative Payment Arrangements are intended to be temporary.
Right to request only
A fundamental concern for a small number of respondents was that, as currently drafted, the Regulations only state that a Scottish claimant has the right to request twice-monthly payments. It was noted that there is no right to receive twice-monthly payments. The final decision remains with the Sectary of State and it was suggested that this is no different to the current regulations covering the UK and adds no additional rights for Scottish residents.
Alternative proposals were that twice-monthly payments should be offered as standard to everyone or that the ability to request twice-monthly payments is framed as a right. A specific suggestion was that at draft regulation 3(1), the term "may request" could be replaced with "elect to receive".
A small number of respondents posed questions about what is meant by a "Scottish Claimant" and how this definition would be applied in practice. A Campaign Group and Third Sector organisation respondent suggested the Regulations should define the term "lives in Scotland" or that, if this is not possible, then guidance should be developed that provides more information about when someone will be considered to be a Scottish claimant. It was suggested that work should be done with HMRC, which has implemented the definition of a Scottish taxpayer for tax purposes. It was also suggested that claimants should receive written notification when they move to an address that takes them out of the Scottish UC claimant definition so that they fully understand what changes will happen.
A small number of other issues about how the Regulations will be applied were raised including:
- With reference to eligible claimants, three respondents noted their concern that the proposed changes do not apply where the award is not administered by the UC Digital (full) system. This was seen as breaching the principles of fairness.
- On reverting to monthly payments, two respondents made points about the circumstances under which a claim would revert to being paid monthly. A Campaign Group or Third Sector organisation respondent suggested that a change to twice monthly payments should not be for short periods, unless this was specifically requested by the claimant.
- A Local Authority respondent felt that, if the intention is that either party in a claim is able to make the request for twice-monthly payment, this has not been made clear.
- A Registered Social Landlord respondent suggested that, as these Regulations refer to claims and payment in Scotland it would perhaps be appropriate to reference what would happen to the payments to either a Scottish Claimant or the landlord should a Rent Penalty Notice be served under Section 94 of the Anti-Social Behaviour etc. (Scotland) Act 2004.
Finally, a Campaign Group or Third Sector organisation respondent highlighted how the provision could affect "mixed-age couples" households in which one partner has achieved Pension Credit age and the other has not. They noted that there are different payment cycles for UC and the State Pension but that the income of the whole household per month is used to determine entitlement to UC in that month. However, because the State Pension is paid four-weekly in arrears, in some months the pensioner partner will receive two State Pension payments in the same month. This will mean that in such months the DWP will consider the household to have more income than usual, and so be entitled to less (or no) UC, including the housing cost element. They suggested that the payment and assessment cycles could be aligned to prevent this issue arising and urged the Scottish Government to work with the UK Government and DWP to find a solution.
Email: Trish Brady-Campbell, firstname.lastname@example.org
Phone: 0300 244 4000 – Central Enquiry Unit
The Scottish Government
St Andrew's House