Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, for what reason claimants of universal credit under the age of 25 receive a lower rate than claimants over the age of 25.
Answered by Will Quince
We have injected over £6.5bn into the welfare system, including increasing Universal Credit and Working Tax Credit by up to £1,040 a year for everyone. This was in addition to the 1.7 per cent inflation increase which was part of the Government’s decision to end the benefits freeze meaning more financial support for millions of people across the UK, including those under 25.
The Universal Credit rate for under 25s reflects the lower wages that younger workers typically receive.
Universal Credit also includes separate elements to provide support for housing costs, children and childcare costs and support for disabled people and carers. These additional amounts are provided to claimants at the same level irrespective of age.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps her Department is taking to provide support to young people between the ages of 18 and 24 who are disproportionately financially affected by the covid-19 outbreak.
Answered by Mims Davies - Shadow Minister for Women and Equalities
We acknowledge that it is important that Jobcentres continue to support young people through the economic recovery post-COVID-19. They have already started to re-engage with new and existing claimants and are signposting them to appropriate support.
Anyone over the age of 18 can claim New Style Employment and Support Allowance and Jobseeker’s Allowance if they have sufficient paid National Insurance contributions. Neither of those benefits is means-tested. Those on low incomes and with limited capital can claim Universal Credit or legacy Jobseeker’s Allowance.
For Universal Credit, New Claims Advances of up to 100% of potential entitlement are available within a few days if a claimant needs support during their first assessment period. Face-to-face checks for Universal Credit advances have been scrapped due to Covid-19, so people get the support they need despite COVID-19 restrictions. We have also increased the Standard Allowance for everyone by over £80 a month on top of the existing 1.7% (CPI) increase already announced. This additional increase means all claimants will be up to £1040 better off.
DWP is also engaging with a number of external stakeholders including the Youth Employment Group (set up by the Prince’s Trust, Youth Employment UK, the Institute for Employment Studies, the Youth Futures Foundation and Impetus) as well as continuing to work across Whitehall to develop appropriate support aimed at young people.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment she has made of the potential merits of increasing universal credit entitlement for people that are (a) single and under 25 years of age and (b) in a couple and under 25 years of age.
Answered by Will Quince
As a result of changes made in April, the Universal Credit standard allowance increased by £20 per week for the next 12 months – equivalent to up to £1,040 a year. This is in addition to the 1.7% inflation increase, announced Nov 2019, as part of the Government’s decision to end the benefits freeze, and means more financial support for millions of people across the UK.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, whether her Department has plans to make people that are self-employed and have pension savings exempt from the rules on capital when applying for universal credit.
Answered by Mims Davies - Shadow Minister for Women and Equalities
Regardless of employment status, any funds held in an occupational or personal pension scheme are disregarded as capital in Universal Credit until the claimant reaches the pension age of the scheme, or withdraws funds from the scheme early.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what plans she has to increase Employment and Support Allowance during the covid-19 outbreak.
Answered by Justin Tomlinson
We currently have no plans to increase Employment and Support Allowance above its current rates.
We have announced a suite of measures that can be quickly and effectively operationalised to benefit those facing the most financial disruption, such as increasing the standard rate in Universal Credit by £86.67 per month (equivalent to £20 per week) on top of the planned annual uprating. This additional increase means claimants will be up to £1040 better off. We estimate 2.5m households on UC will benefit straight away, as well as new claimants who become unemployed or whose earnings or work hours decrease because of the outbreak. The Universal Credit IT system is significantly more flexible than our legacy systems and uses different technology from other DWP systems. The Department is experiencing significant increased demand and the Government has to prioritise the safety and stability of the benefits system overall.
We have also made a number of changes to legacy benefits like Employment and Support Allowance (ESA) in response to the COVID-19 outbreak, including increases in entitlement. These new measures include:
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what the timetable is for the draft regulations for compensatory payments to be arranged for people who have moved to universal credit and lost their legacy benefit severe disability premium payments.
Answered by Justin Tomlinson
The draft Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 were laid in Parliament on 14 January 2019, and will introduce provision for those claimants who were in receipt of the Severe Disability Premium (SDP) and who have already moved on to Universal Credit following a change in their circumstances. These regulations will provide both an on-going monthly payment to eligible claimants who have already lost the SDP as a consequence of moving to Universal Credit and an additional lump sum payment to cover the period since they moved.
These regulations are subject to parliamentary debate and approval before they come in to force. Once introduced we will implement our processes to identify those who are potentially eligible for payments, aiming to make all payments as quickly as possible and within 6 months of the regulations coming into force. This will be a time consuming process, as we have to identify claimants and assess their eligibility, possibly needing to check some information directly with claimants. We aim to finish making payments within 6 months of the regulations coming into force.
We have also introduced the Severe Disability Premium Gateway which prevents claimants who are receiving the SDP, or have done so within the past month and remain entitled to it, from moving onto Universal Credit from legacy benefits, even if they experience a change in their circumstances. These claimants will continue to receive legacy benefits including their SDP until they are moved onto Universal Credit by the Department.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps her Department is taking to support low earners to save for retirement.
Answered by Guy Opperman
Automatic enrolment has reversed the decline in workplace pension saving. Latest figures show that over 10 million workers have now been automatically enrolled into workplace pension by more than 1.4 million employers. By 2019/20 an estimated extra £18.4 billion a year is estimated to go into workplace pensions as a result of Automatic Enrolment.
Automatic Enrolment has been particularly successful for those groups who were once poorly served or excluded from workplace pension saving, including lower earners. The largest increase amongst income groups in workplace pension participation (an increase from 20% to 72%) between 2012 and 2017, being amongst eligible private sector workers earning between £10,000 and £19,999.
The Government is committed to building on the success of Automatic Enrolment. The 2017 review sets out our ambition for the mid-2020s, with proposals to strengthen financial resilience for young people and lower earners, including those who have multiple part-time jobs. However, we will not force the pace of change in Automatic Enrolment and want to understand properly the impact of the 2018 and 2019 increases in minimum contribution rates, and work with stakeholders to build the consensus on which the success of Automatic Enrolment has been based, before committing to a timetable for the proposed changes.
In addition, low earners benefit from the rise in the living wage, the increase in the tax threshold and free 15-30 hours childcare support.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps her Department is taking to support people working in the gig-economy to save for retirement.
Answered by Guy Opperman
As set out in the 2017 Review of Automatic Enrolment, a large proportion of those working in the gig economy potentially already come within the scope of the Automatic Enrolment framework, if they meet the relevant eligibility rules including age and earnings criteria. The Pensions Regulator has a statutory objective to maximise employer compliance with the automatic enrolment obligations.
In addition, the Government set out its vision for the future of the labour market and ambitious plans for implementing the recommendations arising from the 2017 Taylor Review of Modern Working Practices. In its December 2018 Good Work plan the Government committed to legislate to improve the clarity of the employment status tests, reflecting the reality of modern working relationships.
We will ensure any changes are also considered in relation to Automatic Enrolment so that there is coherence and clarity for individuals and businesses about who is eligible for automatic enrolment, meaning as many eligible workers as possible can save for retirement.
The self-employed are able to opt in to Automatic Enrolment through the NEST Corporation, who have a Public Service Obligation to accept self-employed savers (since March 2018), and a significant number do so.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps her Department is taking to support self-employed people to save for retirement.
Answered by Guy Opperman
The UK self-employed population is a highly diverse group encompassing an estimate 4.75 million people. Finding effective, durable retirement saving solutions for self-employed individuals is a long-term challenge for our generation. As part of its 2017 Review of Automatic Enrolment, the Government committed to test targeted interventions aimed at establishing what works to increase retirement saving amongst the self-employed.
Our December 2108 report, ‘Enabling retirement savings for the self-employed: pensions and long-term savings trials’, provided a research and trialling programme, working with partners, to deliver a range of trialling activities from 2019/20. The initial trials will focus on testing whether or not certain types of messaging or marketing interventions can increase the propensity of the self-employed to save in a pension. Later trials will build on the findings and test the scope to make it easier to prompt and/or facilitates contributions through existing systems which many self-employed people use, such as invoicing services or accounting software.
Our objective is to use these trialling activities to inform and develop the evidence base, in order to identify effective policy interventions which can then be tested at scale in future.
In addition, low earners benefit from the rise in the living wage, the increase in the tax threshold and free 15-30 hours childcare support.
Asked by: Mhairi Black (Scottish National Party - Paisley and Renfrewshire South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what steps his Department is taking to encourage young people to save for a pension; and if he will make a statement.
Answered by Guy Opperman
Automatic enrolment into workplace pensions was introduced to enable more people to save for their retirement. So far over 8 million people have been automatically enrolled into a workplace pension, reversing the decline in private pension saving, including amongst younger workers, seen in the decade before the reforms were introduced in 2012.
In March this year, the Office for National Statistics published an estimate that around 160,000 employees aged 16-21 and 2.7 million employees aged 22-29 were contributing to a workplace pension in 2016
We are looking at how we can build on this success over the longer term. Our current review of automatic enrolment is looking at the existing coverage of the policy and the needs of those not currently benefiting; strengthening the evidence base concerning future contributions; and how we can encourage greater personal ownership of work place pension saving, including by young people. The Review will report at the end of 2017.