Asked by: Daisy Cooper (Liberal Democrat - St Albans)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how many claimants have received tax credit overpayments since their migration to Universal Credit in St Albans district.
Answered by Jo Churchill - Minister of State (Department for Work and Pensions)
A claim for Universal Credit (UC) closes any tax credit claim with any associated overpayment arising from tax credits passed to DWP for recovery.
The number of individuals in St Alban’s that had received a migration notice by Dec-23 was nil/negligible. We are therefore unable to provide the requested data to prevent releasing potentially disclosive information about individuals.
Asked by: Liz Kendall (Labour - Leicester West)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, with reference to paragraph 4.58 of the Office for Budget Responsibility publication entitled Economic and Fiscal Outlook, published in March 2024, whether he has made an estimate of future trends in the level of fraud in Universal Credit claims.
Answered by Paul Maynard - Parliamentary Under-Secretary (Department for Work and Pensions)
DWP produces forecasts of overpayments in the benefit system as part of its forecasts for benefit expenditure. These are reviewed and agreed by the Office for Budget Responsibility (OBR), which uses them as part of its fiscal forecasting and to evaluate policy costings.
As per our commitment published in the Treasury Minutes, CP 1029 – Treasury Minutes – Government Response to the Committee of Public Accounts on the Eightieth report from Session 2022-23 and the First to the Sixth reports from Session 2023-24 (parliament.uk), we will set out our forecast in the Annual Report and Accounts for financial year 23/24, expected to be published later this year.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how much has been overpaid to (a) Universal Credit and (b) Employment and Support Allowance claimants in each of the last twelve months.
Answered by Paul Maynard - Parliamentary Under-Secretary (Department for Work and Pensions)
DWP measures its overpayments via annual national statistics published each May.
Latest published figures show that 12.8% (£5,540m) of UC and 3.4% (£410m) ESA was overpaid. These figures include fraud, official error and claimant error.
Fraud and error in the benefit system: financial year 2022 to 2023 estimates - GOV.UK (www.gov.uk)
Asked by: Alison McGovern (Labour - Wirral South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what information her Department holds on the median (a) difference between the cost of rent and the Local Housing Allowance (LHA) in households where rent exceeds the LHA and (b) deduction of universal credit claims due to (i) universal credit advances, (ii) universal credit overpayments, (iii) tax credit overpayments and (iv) other reasons for people in the private rented sector for whom the LHA does not fully cover their rent.
Answered by Jo Churchill - Minister of State (Department for Work and Pensions)
Government spends around £30bn annually on housing support. In addition, Local Housing Allowance (LHA) rates will be increased from April 2024 to the 30th percentile of local market rents. This will mean 1.6 million private renters in receipt of Housing Benefit or Universal Credit (UC) will gain on average around £800 a year in additional help towards their rental costs in 2024-25. This is at a cost of £7bn over five years.
The Secretary of State has committed to review LHA rates annually. That review includes consideration of current rents, as well as the broader fiscal context. LHA rates are not intended to meet all rents in all areas: instead, it ensures that claimants in similar circumstances and area are treated the same.
For those who face a shortfall in meeting their housing costs and require additional support Discretionary Housing Payments (DHP) are available from local authorities. Since 2011 the Government has provided nearly £1.7 billion to local authorities for households who need additional support with their housing costs.
The requested information is provided below
Table 1: Median deduction amount for households where Local Housing Allowance does not cover rent in August 2023. | |
Deduction type | Median deduction amount for the selected deduction type |
Advance Repayments | £43 |
DWP non-fraud overpayments | £49 |
Tax Credit overpayments | £42 |
Other (Not in the above) | £25 |
Table 2: Number of households where Local Housing Allowance does not cover rent in August 2023. | |
Deduction type | Number of Households |
Advance Repayments | 270,000 |
DWP non-fraud overpayments | 140,000 |
Tax Credit overpayments | 90,000 |
Households with any combination of: advance repayments, DWP non-fraud overpayments or tax credit overpayments | 380,000 |
I refer the member to the answer provided on 31 January 2024, that shows the median difference between the cost of rent and the Local Housing Allowance (LHA) in households where rent exceeds the LHA, available here: Written questions and answers - Written questions, answers and statements - UK Parliament
Notes:
1. Household numbers have been rounded to the nearest 10,000 and deduction amounts have been rounded to the nearest £1.
2. Deductions include advance repayments, third party deductions and all other deductions, but exclude sanctions and fraud penalties which are reductions of benefit rather than deductions.
3. "Advances" include all four UC advance types: New Claim, Benefit Transfer, Budgeting and Change of Circumstances.
4. The tables include the number of distinct Universal Credit households subject to a deduction in August 2023.
5. Households could have more than one deduction type so adding claims by deduction type may not sum to the total.
6. The 'other' category in table 1 includes households with a deduction, where the deduction type is not the following: universal credit advances, DWP non-fraud overpayments, tax credit overpayments. The median given is of the sum of all 'other' deductions for each household.
7. It is not possible to separate UC overpayments from other DWP non-fraud overpayments.
8. Figures are provisional and are subject to retrospective change as later data becomes available.
Asked by: Alison McGovern (Labour - Wirral South)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how many universal credit claims for which the local housing allowance did not cover rent were subject to deductions for (a) universal credit advances, (b) universal credit overpayments, (c) tax credit overpayments and (d) any combination thereof.
Answered by Jo Churchill - Minister of State (Department for Work and Pensions)
Government spends around £30bn annually on housing support. In addition, Local Housing Allowance (LHA) rates will be increased from April 2024 to the 30th percentile of local market rents. This will mean 1.6 million private renters in receipt of Housing Benefit or Universal Credit (UC) will gain on average around £800 a year in additional help towards their rental costs in 2024-25. This is at a cost of £7bn over five years.
The Secretary of State has committed to review LHA rates annually. That review includes consideration of current rents, as well as the broader fiscal context. LHA rates are not intended to meet all rents in all areas: instead, it ensures that claimants in similar circumstances and area are treated the same.
For those who face a shortfall in meeting their housing costs and require additional support Discretionary Housing Payments (DHP) are available from local authorities. Since 2011 the Government has provided nearly £1.7 billion to local authorities for households who need additional support with their housing costs.
The requested information is provided below
Table 1: Median deduction amount for households where Local Housing Allowance does not cover rent in August 2023. | |
Deduction type | Median deduction amount for the selected deduction type |
Advance Repayments | £43 |
DWP non-fraud overpayments | £49 |
Tax Credit overpayments | £42 |
Other (Not in the above) | £25 |
Table 2: Number of households where Local Housing Allowance does not cover rent in August 2023. | |
Deduction type | Number of Households |
Advance Repayments | 270,000 |
DWP non-fraud overpayments | 140,000 |
Tax Credit overpayments | 90,000 |
Households with any combination of: advance repayments, DWP non-fraud overpayments or tax credit overpayments | 380,000 |
I refer the member to the answer provided on 31 January 2024, that shows the median difference between the cost of rent and the Local Housing Allowance (LHA) in households where rent exceeds the LHA, available here: Written questions and answers - Written questions, answers and statements - UK Parliament
Notes:
1. Household numbers have been rounded to the nearest 10,000 and deduction amounts have been rounded to the nearest £1.
2. Deductions include advance repayments, third party deductions and all other deductions, but exclude sanctions and fraud penalties which are reductions of benefit rather than deductions.
3. "Advances" include all four UC advance types: New Claim, Benefit Transfer, Budgeting and Change of Circumstances.
4. The tables include the number of distinct Universal Credit households subject to a deduction in August 2023.
5. Households could have more than one deduction type so adding claims by deduction type may not sum to the total.
6. The 'other' category in table 1 includes households with a deduction, where the deduction type is not the following: universal credit advances, DWP non-fraud overpayments, tax credit overpayments. The median given is of the sum of all 'other' deductions for each household.
7. It is not possible to separate UC overpayments from other DWP non-fraud overpayments.
8. Figures are provisional and are subject to retrospective change as later data becomes available.
Asked by: Wendy Chamberlain (Liberal Democrat - North East Fife)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps his Department is taking to protect vulnerable tax credit claimants who have accrued overpayment debt through no fault of their own.
Answered by Nigel Huddleston - Financial Secretary (HM Treasury)
The Government takes a considered and balanced approach to the recovery of benefit debt and HMRC has strong processes in place to support those that may be struggling to pay back tax credits overpayments with manageable recovery plans.
HMRC calculates tax credit awards across the financial year to ensure customers receive regular and consistent financial support. Customers are required to tell us of any change in circumstances and when they do, awards are recalculated and balanced across the remainder of the period. Customers are made aware of any overpayment that is generated as a result and the process to challenge the overpayment if they do not agree it is correct.
HMRC has a well-established approach to help tax credit customers who are having difficulty repaying a debt and require extra support, including offering its customers debt advice referral to the Money and Pensions Service Money Adviser Network for a free bespoke independent debt service.
HMRC will work with customers and can agree a temporary reduction in the rate of repayment based on their financial circumstances. In some cases, recovery of the debt can be paused. When customers and their tax credit debt move to Universal Credit, they can continue to access support through DWP.
Asked by: Stephen Timms (Labour - East Ham)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what estimate he has made of the number of claimants who would be within the scope of Clause 128 and Schedule 11 of the Data Protection and Digital Information Bill; and how many receive (a) the state pension, (b) Personal Independence Payment and (c) child benefit as the only relevant benefit.
Answered by Paul Maynard - Parliamentary Under-Secretary (Department for Work and Pensions)
Fraud is a growing problem across the economy, accounting for over 40% of all crime in 2022. This problem exists in the welfare system too, with fraud becoming increasingly sophisticated and on a scale not seen in the past. The introduction of the third party data measure is key to helping DWP tackle and reduce fraud and error which amounted to £8.3bn last year (2022-23).
The legislation is clear that the proposed power can only be used to help establish eligibility for DWP benefits that are being paid to individuals. This power requires third parties to look within their own data and provide relevant information to DWP that may signal where DWP claimants do not meet the eligibility criteria for the benefit they are receiving. This data may signal fraud or error and require a further review by DWP – through business-as-usual processes - to determine whether wrongful payments are being made. Only minimal information will ever be shared by designated third parties with DWP where there is a three-way relationship - between DWP, the claimant and the third party - to enable us to make further enquiries. No personal information will be shared by DWP with third parties.
DWP cannot exercise this power in relation to Child Benefit, because Child Benefit is not a DWP payment as the legislation sets out. Last year, DWP administered payments of £230.5 billion through the welfare system and we know the vast majority of these claims are paid correctly and accurately. Our measure will only impact a minority of people who are potentially receiving more money than they are eligible to receive.
As the Regulatory Impact Assessment sets out, the initial use of this power will be focused on identification of potential capital and abroad fraud and error in Universal Credit, Employment and Support Allowance, Pension Credit and Housing Benefit (passported from Pension Credit) cases. Failure to declare or under-declaring capital is consistently in the top causes of Fraud and Error and cost £894m million in Universal Credit overpayments, £138m in Pension Credit and £167m in ESA in 2022-23. The current powers DWP has are limited and leave the Department unable to address this challenge at scale. The third-party data gathering measure will enable DWP to better access relevant data which will help identify fraud and error in the system.
As trends in fraud and error change, it is right we have the ability, in the future, to exercise this power across all benefits and payments that are administered by DWP.
Affirmative regulations, and a statutory Code of Practice, will need to be brought forward before the Department can use these powers to define the specific data holder in scope and to outline other elements relating to the use of the power.
Asked by: Chi Onwurah (Labour - Newcastle upon Tyne Central)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, for what reasons is there an average 5-week wait for claimants to receive a first payment of Universal Credit; and whether he has made an assessment of the potential impact of this wait on levels of poverty in the north east of England.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The Universal Credit assessment period and payment structure are fundamental parts of its design as agreed by parliament. Universal Credit reflects payment patterns in the world of work, where the majority of people are paid monthly or four-weekly. Ensuring similarities between paid employment and being on benefits eliminates an important barrier which could prevent claimants from adjusting to paid employment.
Universal Credit is determined by the date of entitlement, the first payment is usually made around five weeks after the claim is made. The first calendar month is the initial assessment period. At the end of that period, entitlement for that month is calculated and paid 7 days later. Payments thereafter are made monthly in arrears. It is not possible to award a Universal Credit payment as soon as a claim is made as the assessment period must run its course before the award of Universal Credit can be calculated. It is not possible to accurately determine what a claimant’s entitlement will be in the month ahead. This process ensures claimants are paid their correct entitlement, based on verified information (such as actual housing costs verified from the rental agreement) and actual earnings, and prevents significant overpayments from occurring.
No assessment has been made.
Asked by: Kirsten Oswald (Scottish National Party - East Renfrewshire)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, whether it is his Department’s policy to remove sanctions from Universal Credit claimants who were wrongly awarded a benefit due to an administration error.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
The DWP has taken significant steps to ensure the accuracy of benefit payments and the vast majority of benefit expenditure is paid correctly.
The question is difficult to answer without the specifics of any individual case but the broad policy is as follows:
Where overpayments do occur, Section 105 of The Welfare Reform Act 2012, amending the Social Security Act 1992 (Section 71ZB), states that any overpayment of Universal Credit, new style JSA or ESA in excess of entitlement, is recoverable.
If the claim is subsequently found to be invalid due to administrative error, then the entirety of the claim is removed, and any sanction imposed would be removed.
A sanction can only be applied if entitlement to benefit has been established and if the claimant has failed to meet their agreed requirements or failed to take up or stay in employment without good reason.
Asked by: Deidre Brock (Scottish National Party - Edinburgh North and Leith)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how existing overpayments will be handled in the managed migration from Working Tax Credits to Universal Credit.
Answered by Guy Opperman - Parliamentary Under-Secretary (Department for Transport)
When a claimant’s tax credit claim is closed, for whatever reason, including a move to Universal Credit, the debt is transferred to the Department’s Debt Management team.
Once Universal Credit is in payment, the overpayment will be recovered in line with the Universal Credit regulations.