Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, with reference to oral evidence given by the Minister for Welfare Delivery on 9 March 2021 to the Work and Pensions Committee and the House of Lords Economic Affairs Committee, how her Department reached the conclusion that introducing a non-repayable grant for new universal credit claimants would cost about £2 billion to £2.5 billion per annum; and if she will publish the details of those costings.

This estimate was derived from the Spring 2020 forecasts, which are based on the Department’s inflow forecasts, with an assumed take-up rate of 100%. There are no plans to introduce a non-repayable grant.

New Claims Advances are the claimant’s benefit paid early, allowing claimants to access 100% of their estimated Universal Credit (UC) payment upfront. With a UC Advance, claimants receive an additional UC payment, resulting in 13 payments in a year rather than 12. From 12 April 2021, claimants have the option to spread twenty-five UC payments over twenty-four months, giving them more flexibility over the payments of their UC award. This will also allow claimants to retain more of their award, giving additional financial security.

The Department’s deductions policy strikes a fair balance between a claimant’s need to meet their financial obligations and their ability to ensure they can meet their day-to-day needs. Since October 2019, UC deductions are a maximum of 30% of a claimant’s standard allowance down from 40% previously. We also recognise the importance of safeguarding the welfare of claimants who have incurred debt, so last resort deductions over the 30% cap can be applied to protect vulnerable claimants from eviction and/or having their fuel supply disconnected, by providing a repayment method for arrears of these essential services.

The main aim of the deductions policy in Universal Credit is to safeguard the welfare of claimants who have incurred debt in a cost effective and efficient way. It provides protection for claimants from the consequences of homelessness, imprisonment or having vital utilities disconnected. Regulations protect claimants from excessive deductions and there are no plans to suspend them.