Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps his Department has taken to improve the accuracy of income data used in calculating awards of universal credit; and what estimate he has made of the improvement obtained by those steps.

The Real Time Information (RTI) system ensures that we get Universal Credit claims right by providing us with accurate and timely details of earnings from Her Majesty’s Revenue and Customs. The HMRC database holding the PAYE data reported in real time receives the data from employers, holds it and passes on relevant data for Universal Credit claimants to DWP. The system is working well with over 99% of individual employment records now being reported in real time. A number of processes are in place to deal with inaccurate data from employers. DWP and HMRC analysts monitor the RTI data received, looking for trends, patterns and causes. Both Departments then work together with employers and partners such as software developers and payroll bureaux to improve the quality of the data. This work supplements the BACS payment validation process.

Universal Credit claimants are required to report all unearned income to DWP and provide the evidence to verify that income where necessary. In replacing existing income replacement benefits and tax credits, Universal Credit has simplified the treatment of unearned income. There are no partial disregards and all unearned income that will be taken into account in the Universal Credit assessment is prescribed in the regulations. Once rolled out, DWP expects the high-level design of Universal Credit to lead to around £1bn in Annually Managed Expenditure savings each year from reduced fraud and error, compared to the benefits and Tax Credits that Universal Credit will replace.