Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021

Baroness Sherlock Excerpts

Thursday 11th February 2021 Lords Chamber

Moved by

[Baroness Sherlock]

That this House regrets that the Universal Credit (Transitional Provisions) (Claimants previously entitled to a severe disability premium) Amendment Regulations 2021 (SI 2021/4) will result in claimants in receipt of the Severe Disability Premium in legacy benefits moving on to Universal Credit without ensuring that all will be fully compensated for the loss of the Premium; and calls on Her Majesty’s Government to extend to legacy benefits the same uplift given to Universal Credit in response to the COVID-19 pandemic, and to ensure that claimants are advised before moving from legacy benefits to Universal Credit that they could suffer financially as a consequence.

Relevant document: 42nd Report from the Secondary Legislation Scrutiny Committee

[Baroness Sherlock (Lab) [V]]

My Lords, I am pleased to move this Motion standing in my name. These regulations are the latest twist in a long-running saga that concerns the severe disability premium, or SDP, which provides support for the extra costs of care incurred by severely disabled people living alone without a carer. It is worth about £67 a week and is paid on various means-tested benefits.

The latest government figures I could find suggest that over 500,000 working-age households get SDP. But when the Government created universal credit to replace legacy benefits, they chose not to include an equivalent of the SDP. As a result, although some disabled people are better off, many of the severely disabled people getting this premium will be much worse off on universal credit. That is a wider pattern: some people are better off on universal credit than legacy benefits and some much worse off.

To deal with that, the Government pledged a system of transitional protection, so that, at the point of transfer, no one would lose out in cash terms. But they will apply this only during what they call mass migration, the point when the DWP closes down legacy benefit claims en masse and tells people they have to claim universal credit instead. If someone moves on to UC before that point, which is called natural migration, they get no transitional protection.

Unfortunately, many people have no choice. You cannot make new claims for legacy benefits, and if you are already getting them but your circumstances change—say you lose your job, have a baby or move house—you are forced on to universal credit. Two people getting the SDP found themselves in this position when they moved home. They were forced on to UC and were much worse off. They went to court and in 2018 the High Court ruled that this was unlawful discrimination. So the DWP created something called the SDP gateway to stop those getting the premium naturally migrating to universal credit and losing out. Those who had already crossed over were given compensation for the lost premium, although that was originally set arbitrarily low, so that was challenged in court again, and it is now based on the lost SDP.

These regulations remove that gateway and give some compensation to those who will then be moving over to universal credit. But it is not full compensation; it does not compensate for the loss of the enhanced disability premium, only the severe disability premium. Nothing is paid where the SDP is attached only to housing benefit. And it is a fixed sum, which is reduced when any part of your universal credit rises, even if that is only because your rent has gone up. So claimants will see the support they receive fall in real terms, year on year.

If someone moved on to universal credit during a managed migration, they would have transitional protection based on all their legacy benefits, not just the SDP. That managed migration process has been paused. Can the Minister tell us what the new target date is for completing it? Zacchaeus 2000 points out that Covid-19 has increased rates of redundancy and caused changes in working hours, increasing the number of people on legacy benefits experiencing a change in circumstances. More claims will therefore end up moving on to universal credit with no transitional protection or with just the transitional SDP element.

Some vulnerable people risk losing a lot of money. Marie Curie, in its excellent briefing, points out the impact on people with terminal illnesses or life-limiting conditions. It says that the loss of the two disability premiums could leave new claimants up to £84 a week worse off. Then there is the related issue of the £20 uplift to universal credit. That was not applied to legacy benefits, many recipients of which are disabled people or carers. This is incomprehensible, as well as unfair. Since there is meant to be a pandemic measure, many sick or disabled people have spent the last year shielding at home, with spiralling energy costs and lots of additional costs such as home deliveries, PPE and much more.

Astonishingly, the Secretary of State for Work and Pensions, Thérèse Coffey, suggests that claimants should simply claim universal credit if they want the £20. This is terrible advice. Some people will be worse off on universal credit than they were on legacy benefits, even with that extra £20. Others, who would be better off on universal credit because of the £20 uplift, will be worse off if it is taken away. How will they know? It is really complicated. The DWP says that it cannot advise individual claimants, so why on earth is the Secretary of State for Work and Pensions telling people to switch?

If someone applies for universal credit, there is no going back. Noble Lords may have seen cases of people in the news of people getting tax credits who then applied for universal credit and were rejected because they had savings; UC has a savings threshold, unlike tax credits. But then they were not allowed to go back to tax credits, so they got nothing. We surely cannot have that apply across all kinds of other categories of claimant.

What should be done? First, the Government should urgently address the flaws in their strategy for dealing with people in receipt of severe disability premium who are going to be forced on to universal credit. The House of Lords Economic Affairs Committee said:

“The DWP should introduce an equivalent to the Severe Disability Premium. This should be a self-care element for any disabled person who does not have someone assisting them and claiming the carer element of Universal Credit.”


Many charities agree. What is the Government’s response to this?

Secondly, the DWP should address the process of claimants moving from legacy benefits on to universal credit. We need an urgent update on managed migration. We need mass communication, and we need personalised advice for anyone thinking of moving so that they know the consequences before they make that jump.

Thirdly, the Government should extend the £20 uplift to legacy benefits. They should do the right thing and make that uplift permanent. The Economic Affairs Committee put the case simply:

“We believe that the increase shows the original rate was not adequate … The Government should commit to making the increase in the standard allowance permanent.”


That original rate is not adequate as a result of years of benefit cuts and freezes. The House of Commons Library figures show that, excluding Covid-related increases, most working-age benefits were between 9% and 17% lower last year than they would have been if the Government had simply uprated them by inflation since 2010. The OBR estimated that the 2015 Budget would cut over £9 billion from social security spending by the end of this financial year. No wonder that before that £20 uplift, unemployment support was at its lowest level in real terms since 1992.

We need action. Temporarily extending the uplift will simply temporarily extend the confusion and uncertainty. The Government should do the right thing, address the problem with SDP, extend the uplift to legacy benefits, make it permanent and announce it as soon as possible, so that people have certainty and can judge for themselves whether they will be better off on universal credit or legacy benefits. The case for taking action on this matter could not be clearer. I hope I do not have to press the Motion to a vote, because I hope the Government will realise what is at stake and do the right thing.

[The Deputy Speaker (Baroness Watkins of Tavistock) (CB)]

As the noble Baroness, Lady Bowles, has withdrawn, I call the next speaker: the noble Baroness, Lady Altmann.

--- Later in debate ---

[Baroness Sherlock (Lab) [V]]

My Lords, I am grateful to all noble Lords who have spoken and I thank the noble Baroness, Lady Janke, for her support in helping to make the case for this Motion. Likewise, I thank the noble Baroness, Lady Bennett, for supporting the Motion and for reminding us of the human face of suffering in that terrible picture of people queuing in the snow to access a food bank.

My noble friend Lady Drake described compellingly the damage these changes can do and why they sit poorly alongside the Government’s moves to support people in the pandemic. I know that the sums may not sound life-changing to some, but they really are. My noble friend Lady Primarolo reminded us of the poverty facing so many severely disabled people, which is being aggravated by the pandemic. She pointed out the severe losses that many will now face. As the noble Baroness, Lady Thomas, said, being disabled is extremely expensive. It is wonderful to see her taking part in this debate and I am grateful for her support and for sharing her experiences and expertise.

I am grateful too to the noble Baroness, Lady Browning, who has long been a champion for disabled people. I thank her for her support and for reminding us of the additional challenges facing so many people with complex disabilities as they contemplate a move to universal credit. I do not think that just going to GOV.UK and testing it out for themselves is the answer. I also note her celebration of the wisdom of women in this regard. That makes me thank in particular our sole male speaker, my noble friend Lord Chandos, for his well-informed reflections and for the work that he and his colleagues on the Economic Affairs Committee have done so well to take apart many issues around universal credit and to flag up the challenges that need to be addressed. The noble Baroness, Lady Ritchie, has once again given her strong support for the Motion and analysed the real problems that this move will pose to severely disabled people and those with life-limiting conditions. I am grateful to her for that.

The noble Baroness, Lady Fookes, spoke up for universal credit, but highlighted the problems caused by underfunding it. I am grateful to her for speaking out so strongly for the £20 uplift. The noble Baroness, Lady Altmann, does not want the £20 uplift to be extended to legacy benefits or made permanent and has argued that getting people into work is the answer. But, as I am sure she knows, universal credit is paid to people who are both in and out of work. Moving someone into work does not solve the problem at all; it simply relocates it.

This debate has highlighted the vital role played by the severe disability premium in enabling sick and disabled people to get critical care. As my noble friend Lady Donaghy pointed out, disability premiums are not a luxury; rather, they help cover the extra costs that disabled people face. The Minister said that if claimants can hold out until managed migration, they will get full transitional protection—but she could offer no information on when even the pilot would restart, never mind when the managed migration programme would be finished. She also said that some people will be better off. I acknowledge that, but the fact that some people will gain is not much help to those who will be much worse off.

I had hoped that the many powerful speeches today would have persuaded the Minister of the case for the changes set out in my Motion. Perhaps they did, really, but she is not in a position to concede them. I hope that, if the House were to endorse this Motion, it might add strength to her arm when she goes back to the Secretary of State and tries to persuade the Government to do the right thing. Again, I am grateful to everyone who has spoken but, to that end, I wish to test the opinion of the House.