In this webinar Deven Ghelani, CEO and Founder, Policy in Practice, looked at Universal Credit and role work allowances plays in its make up. This webinar covered: Introduction Universal Credit – the policy The policy intent How UC works Changes to UC Impact of those changes How Policy in Practice arrives at the analysis insights Universal Credit – the delivery Rollout Outstanding concerns Questions Next steps For further information contact: Deven Ghelani deven@policyinpractice.co.uk 033 0088 9242 @deven_ghelani hello@policyinpractice.co.uk

1. Policy in Practice
Webinar: Universal
Credit and the Impact
on Work Incentives
Thursday 28 January 2016

2. Housekeeping
• Audio check
• Please ask questions
• Polls and a survey
• Finish by 11:30

3. Janet Harkin
Head of Marketing
Speakers
Deven Ghelani
CEO and Founder of Policy in Practice

4. Agenda
• Introduction
• Universal Credit – the policy
• The policy intent
• How UC works
• Changes to UC
• Impact of those changes
• How Policy in Practice arrives at the analysis insights
• Universal Credit – the delivery
• Rollout
• Outstanding concerns
• Questions
• Next steps

5. We make the welfare system
simple to understand, so that
people can make the decisions
that are right for them

6. www.policyinpractice.co.uk
SOFTWARE
individual impact
CONSULTANC
local impact
POLICY
national impact

7. Policy in Practice
seeks frontline
feedback to help
shape policy
Influence

8. Policy in Practice
analysis and news
coverage
Coverage

9. Provided briefing
note on UC and
work allowances
to Lord Kirkwood
for debate on
Welfare Reform
and Work Bill
(Report stage),
Wed 27 Jan 2016
Influence

10. Leading Lights Network
March 2016
www.policyinpractice.co.uk

11. Over to Deven

12. Leading Lights Network
March 2016
www.policyinpractice.co.uk

13. Today’s webinar
• Focus on Universal Credit
• Understand the impacts of proposed cuts to the work allowances
• Who’s affected?
• By how much?
• What can local organisations do?

14. Universal Credit: the policy
55%
Generous work
allowances
2009
65%
Generous work
allowances
2013
65%
Limited work
allowances
2016

15. How Universal Credit works

16. Changes to Universal Credit
• Summer Budget 2015 announced measures to build a high wage, low tax,
low welfare society
• Cuts to tax credits, to make them less generous, were subsequently
reversed
• Cuts to work allowances within UC to make it less generous for working
families, were not reversed
• Cuts were to be mitigated by higher minimum wage and income tax
allowance
• Changes exclusively affect working households
• Option to increase working hours may be limited

17. Work Allowances under Universal Credit
have been cut significantly
2015 2016 Change
Single person £1,332.00 £0.00 1,332.00-£
Lone parent (with housing support) £3,156.00 £2,304.00 852.00-£
Lone parent (no housing costs) £8,808.00 £4,764.00 4,044.00-£
Couple without children £1,332.00 £0.00 1,332.00-£
Couple with children (with housing support) £2,664.00 £2,304.00 360.00-£
Couple with children (no housing costs) £6,432.00 £4,764.00 1,668.00-£
Disabled people (with housing support) £2,304.00 £2,304.00 -£
Disabled people (no housing costs) £7,764.00 £4,764.00 3,000.00-£
Work allowances in Universal Credit have been cut

18. You have to be in work to lose out
The loss from lower work allowances
depends upon your earnings
Income Loss
on Universal
Credit, below
NI threshold
Income Loss
for NI only
Income Loss at
basic tax rate
Income Loss
individual for
people no
longer on UC
Effective Tax Rate 65.0% 69.2% 76.2% 32.0%
Single person 865.80-£ 921.74-£ 1,014.98-£ 426.24-£
Lone parent (with housing support) 553.80-£ 589.58-£ 649.22-£ 272.64-£
Lone parent (no housing costs) 2,628.60-£ 2,798.45-£ 3,081.53-£ 1,294.08-£
Couple without children 865.80-£ 921.74-£ 1,014.98-£ 426.24-£
Couple with children (with housing support) 234.00-£ 249.12-£ 274.32-£ 115.20-£
Couple with children (no housing costs) 1,084.20-£ 1,154.26-£ 1,271.02-£ 533.76-£
Disabled people (with housing support) -£ -£ -£ -£
Disabled people (no housing costs) 1,950.00-£ 2,076.00-£ 2,286.00-£ 960.00-£
• The amount you stand to lose depends on your earnings, and your effective tax rate
• People on Universal Credit earning below the income tax and NI threshold pay back 65p in every £1 lost through
the work allowance

19. Analysis of the impacts
• Family Resources Survey and Policy in Practice software engine
• Cumulative impact of the changes on individual households
• Includes net impact of higher wages, increase personal allowance on the UC
award
• Comparison of income in 2015 with income in 2016 and income in 2020
• Similar to the Welfare Impact Assessment Analysis we do for local
authorities to help them understand impact of policy changes on individual
households
• This gives a clear picture of income, employment and poverty so they can
proactively target support
• All analysis presented in these slides is preliminary!

20. Number of households worse off

21. The productivity challenge

22. The chancellors deficit target is met only
through the accelerated rollout of
Universal Credit.
The chancellor is prioritising the public
finances over the personal finances of
low income households in work.
They should be the party of low effective
taxes, as well as low taxes and reward
work for all.
By the time of the general election, more
and more people in work will be on
Universal Credit, and their circumstances
will change, and they will be worse off.
Savings come from cuts to UC

23. What our Chair Baby thinks of UC cuts

24. 242424
Poll: Do you know what impact
welfare reforms will have on each of
your households?

25. www.policyinpractice.co.uk
www.policyinpractice.co.uk
www.policyinpractice.co.uk
“We wanted to ensure a proactive approach to this next
round of welfare reforms. This meant having a strong
analysis of the impact and scale of impact of these
reforms on our residents, in order to target activity
effectively. The Policy in Practice analysis has provided
us with this and given us a strong basis on which to plan
our partnership and Council activity.”
Ian Duke, LB Hounslow
Policy in Practice’s approach
Your Housing Benefit
data
Our Universal Benefit
Calculator
A detailed impact
assessment - who is
impacted and how?
1. Use local data and
insights to inform better
decision making
2. See the impact of specific
and cumulative reforms at an
aggregate and household
level
3. Inform targeted and
tailored local welfare support

26. From national to household level
UK (Ben Cap) UK (Cumulative) Ward
Neighbourhood Street

27. Policy in Practice’s software engine
Demo >

28. LB Hounslow testimonial

29. Universal Credit: the delivery
• UC first introduced for small subset of new claimants, in some areas, in
2013
• DWP targeted claimant groups who were comparatively simple to
manage, eg single, childless, out of work adults
• Rollout now to be expanded to more areas and more complex caseloads
• Rollout substantially delayed at least 3 times in past 3 years
• But is UC's digital delivery now back on track?

30. UC rollout assumption

31. 313131
Poll: Is UC rollout now on track and
ready to accelerate?

32. Leading Lights Network
March 2016
www.policyinpractice.co.uk

33. Outstanding concerns with Universal Credit
• Housing costs – payment mechanism and vulnerable residents
• The assessment period – timing issues and RTI
• In work conditionality – JCP and progression
• Passported benefits – Free school meals for al children on UC
• The local role – USDL focus narrow on making a UC claim, or broad on
holistic support and joined up services?

34. Questions from our last UC webinar,
answered

35. Questions from the audience
• Q1: Does the calculator spot exemptions from the 7 day waiting period?
• Q2:Does the calculator allow non-specialist advisers to spot exemptions and
extra benefit from e.g. disability benefits and support group eligibility?
• Q3:The claimant analysis shows projected future changes, but do you then
go back to claimant advised to tell them of new changes?
• Q4:I understand that many people will be worse off in work under UC than
the current system. However once people are in UC, are they almost always
better off in work than not in work, or in more work than little work?

36. Questions from the audience
• Q5: Have you done any assessments on the impact of change of
circumstances and awards of UC changing from the beginning of the
assessment period, in particular the impact this will have on rent arrears?
Housing costs have been removed from the beginning of the assessment
period regardless of the fact that the claimant had liability for the majority of
the assessment period.
• Q6: Would you examine if there was entitlement to PIP, Carers Allowance,
Incapable of work to increase UC + get access to a work allowance?

37. 37
Questions?

38. Leading Lights Network
March 2016
www.policyinpractice.co.uk

39. Next steps
Complete the very short survey immediately after this webinar to:
1. Give us some feedback
2. Ask for clarity on any areas of this presentation
3. Request a call to discuss how we could structure a Welfare Reform Impact
Analysis for your area
4. Request a sample Welfare Reform Impact Analysis report
5. Request our Customer Testimonials eBook

40. www.policyinpractice.co.uk
Thank you
Deven Ghelani
deven@policyinpractice.co.uk
033 0088 9242
@deven_ghelani
hello@policyinpractice.co.uk