Universal Credit: Fear and Loathing for 2.9 million in the Poverty Trap

The government’s Universal Credit logo – the slogan is makes work pay. Pic Credit: gov.uk

Today the National Audit Office produces a timely report on the operation of Universal Credit and the impact on claimants of having to wait five weeks to get paid.

It comes when the numbers claiming the benefit has jumped from 2.9m to 6.1 million because of Covid 19.

The report investigates the plight of those needing to claim before Covid 19 struck and it paints a particularly bleak picture.

It is also relevant to the group of 1950s born women whose pension has been delayed from 60 to 66. As the Independent reported separately recently the rise of women making claims for such benefits – soared from 7,578 to 36,527 between 2013 and 2019 – and was almost three times more than men who are aged 60 and over.

Fear factor

What is alarming about the findings – which are an analysis by the NAO of the Department for Work and Pensions own figures – is that many of the people were too frightened to claim and delayed claiming for up to three months after they lost their job.

This damning point is raised in the report. It says:

“Our consultation with claimants and support organisations indicated
that a “fear factor” about Universal Credit is also likely to play a part in some people delaying a claim, or not claiming at all. This may result from people hearing about bad experiences from friends, family or the media, for example.
Some respondents told us they were worried about whether they would be able to cope during the wait.”

As a result the report says the DWP’s analysis of earning data ” found that almost half(49%) of households who claimed Universal Credit in the four years to mid-2018 had no earnings in the three months before they claimed the benefit.

Taking this into account and the additional five week wait to get the benefit this meant that many had to apply for advance payments to tide them over or go to food banks simply to get food to live which then had to be paid back by deducting it from the meagre universal credit they have to live on.

DWP headquarters in Westminster,London.

A particularly revealing table in the report puts together this bleak picture. It shows that an astonishing 80 per cent of all low income people starting to claim the benefit were in serious debt. Some 77 per cent had to rely on advance repayable payments. Another 34 per cent owed money to other government departments – often historic debts. And six per cent had third party debts,like unpaid council tax, child maintenance, rent and water arrears.

Nearly as badly off were claimants with a disabled child, disabled people and carers. Some 65 and 70 per cent had serious debts.

Now as the report shows this is against a dramatic improvement of paying the benefit on time from 55% in January 2017 to 90% in February 2020.

However, as the number of people claiming Universal Credit has grown, the number of people paid late has also increased from 113,000 in 2017 to 312,000 in 2019. In 2019 those new claimants who were paid late faced average delays of three weeks in addition to the five-week wait. Some 6% of households (105,000 new claims) waited around 11 weeks or more for full payment.

Universal Credit expansion delayed

The government has also limited the expansion of universal credit – delaying the final date of switching from other benefits from March 2023 to September 2024 at an extra cost of £1.4 billion to £4.6 billion.

Yet despite spending £39m to try and explain the new benefit to wary claimants the National Audit Office concludes the ministry has a communications problem.

Meg Hillier, chair of the Commons public accounts committee, said: ” too often the most vulnerable claimants still aren’t receiving the money they are entitled to when they need it most.”  

Stephen Timms, chair of the Commons work and pensions committee. Pic credit: Twitter

Stephen Timms, chair of the Commons work and pensions committee said:

“This hard-hitting report on Universal Credit from the National Audit Office confirms the Select Committee’s concern that that the five week wait for the first payment causes ‘financial hardship and debt’.

” It provides further evidence that the initial planning assumptions for Universal Credit were naive. We now know UC will cost an extra £1.4bn to the public purse.  It will take more than twice as long to roll out as originally planned.  Far from reducing fraud and error, Universal Credit is driving historic record high levels – more than £1 in every £10 paid through UC is incorrect”

Neil Couling director general Universal Credit

There is one man who has done rather well out of all this. He is “Mr Universal Credit” Neil Couling, who is in charge of the benefit at the DWP. According to the latest DWP accounts for 2019 he received a bonus of £15,000 on top of a salary of between £150,000 and £155,000 a year. He has got pension benefits worth a cool £80,000.

He will be appearing before the Commons work and pensions committee next Wednesday to explain how well he has handled the benefit for the 2.9 million claimants.

Revealed: 32 years of benefit payment failure by the Department of Work and Pensions

DWP celebrating 32 years of inaccurate accounting

Yesterday while all eyes were on Boris Johnson’s ” Build,Build, Build ” speech the Department for Work and Pensions slipped out their annual accounts for the last financial year.

In what looks like a classic “cover up ” job to bury bad news, the ministry probably did not want the world to know that their accounts had been censured for material inaccuracy for the 32nd year in a row.

The reason is the failure of the ministry to be able to account for unacceptable levels of fraud and error in the huge number of benefit payments. Billions of pounds have been overpaid to claimants through fraud and mistakes by claimants and errors by officials. And billions of pounds have been underpaid by officials to claimants because they have made mistakes in calculating people’s benefits.

The latest figures are a record for every year since John Moore, was social security secretary under Lady Thatcher in 1988.

It shows that ” Excluding State Pension, the estimated rate of overpayments has increased again to 4.8% (£4.5 billion) of estimated benefit expenditure, from a restated rate of 4.4% (£3.8 billion).

“The estimated rate of underpayments, excluding State Pension, has decreased to 2.0% (£1.9 billion), from its estimated rate of 2.2% (£1.9 billion) in 2018-19. The rate of overpayments in 2019-20 is the
highest estimate to date.”

The worst benefit is the new hated Universal Credit which has suffered from both overpayments and underpayments and claimants have to wait five weeks before they can get it. Since the payment depends on claimants’ monthly varying income the scope for inaccurate reporting of the money is large.

The report says: “For Universal Credit, the estimated rate of overpayments increased from 8.7% to 9.4%. This is the highest recorded overpayment rate for any benefit other than Tax Credits (administered by HMRC), which peaked at 9.7% in 2003-04.”

“Underpayments rates have fallen for Universal Credit, Employment and Support Allowance and Pension Credit, and the estimated rate for Housing Benefit has increased. Personal Independence Payment has the highest rate of underpayments at 3.8% of expenditure in 2019-20. This rate has not changed from 2018-19.”

But the small print of the report also reveals how the Department calculates this. It takes samples of benefit payments to arrive at these figures but the National Audit Office reveals that 61 per cent of the benefits paid out to claimants are based on recalculated estimates for the previous year.

Some other omissions are staggering. The Department has never checked whether payments are accurate for claimants on Disability Living Allowance for 16 years – last done in 2004-05.

More extraordinary the Department has never checked whether money paid out to 12 million pensioners is accurate or not since 2005 – that is 15 years ago.

Instead the department maintains there is no serious fraud or underpayments in pensions – calculating it as just £300 million out of an annual payment of £98.6 billion.

Given this year we had a case this year of a 94 year old pensioner being owed a staggering £117,000 because of 34 years of underpayments, I find this complacency mind blowing.

I also think the National Audit Office, as their auditors, is remiss in not asking for an update.

Next year’s estimate of benefit fraud and error is likely to even more out of kilter thanks to Covid 19 as the ministry have got rid of staff monitoring fraud to be able to pay out the 2.6 million claims for universal credit.

And although the department is said to be investigating 143,000 suspicious claims under Covid 19, it can’t follow them up because it can’t visit them at home.

Gareth Davies, the head of the NAO, said :

“I am concerned that fraud and error in benefit payments have risen again. Fraud and error have a real cost, both for those who face deductions from their income due to overpayments and because it reduces the public funds available for other purposes.

“As the Department takes on a set of unprecedented challenges arising from COVID-19 it is more important than ever that my qualification is not seen as business as usual and the Department responds in a cost-effective way to minimise risks of fraud and error.”

Next year I am certain will be the 33rd year the ministry accounts are questioned and found wanting.

My interview on Salford City Radio with Ian Rothwell on the latest injustices to 50swomen

My Interview with Ian

As it gets nearer to the appeal hearing brought by two members of BackTo60 on July 21 to recover their lost pensions from 60 to 66 I gave another interview tonight to Ian Rothwell, presenter for Salford City Radio, which has been covering the issue of the women’s lost pensions.

I make no apologies for raising again the extraordinary findings that the Department for Work and Pensions has admitted that 4.6 million men were able to get auto credits from the age of 60 for 35 years from 1983 to 2018.

The disclosure is all the more damaging because a central theme of the DWP at the court hearing was that the raising of the pension age from 60 to now 66 was an issue of equality to end discrimination against men – without disclosing the scale of auto credits given to men to cover their national insurance contributions.

Even now while many women born in the 1950s are suffering severe hardship by waiting for their pension, men have the opportunity, thanks to ex pensions minister, Steve Webb, raising the issue ,to claim back the money they lost if they had paid national insurance contributions while they were over 60 during this period.

The DWP may be able to claim that for some men they already had enough contributions so it was immaterial, or that some died or moved abroad before they could claim their pension, that misses the main point.

The main point is that there was much more of a level playing field between men and women than the DWP acknowledged at the hearing. Men needn’t have paid NI insurance even if they took a low paid job. And if they had an occupational pension and their wife had retired they needn’t have bothered to contribute any further to their state pension or even worked.

Anyway you can hear the interview at the top of the blog.

Covid-19: NHS chaos and DWP indifference lead to tragedy for one 50s born woman

And why the BackTo60 Facebook crowdfunder is essential to bring these sad facts for many more to light

The family of Ray and Lesley Myers with daughters Nicola and Jenny in happier times.

This is a tragic tale that I suspect is being repeated across the UK now we have the largest number of deaths in Europe. It gives a little glimpse into the human cost behind the cold harsh statistics of the daily death toll. Her daughter contacted me and she agreed to be interviewed.

Ray and Lesley Myers thought they had their retirement well planned. He would get his pension at 65 and one year later she would get hers at 60.

He was a successful Welsh speaking self employed builder in North Wales. They had a comfortable four bedroomed house and two lovely daughters.

Then at 60 Ray developed cancer and was unable to work. They downsized from their four bed house to a one bed apartment in Chester.

Through the help of the NHS Countess of Chester Hospital & The Hospice of the Good Shepherd he was tackling his cancer and they were still looking forward to many more years together.

This winter Ray got pneumonia and went into the Countess of Chester Hospital. He got better , came out of hospital, but then fell ill again and was re-admitted.

Unfortunately for him he came back just as the Covid-19 was starting to spread across the UK. The doctors there also tried to press him to sign a ” do not resuscitate” form.

According to Lesley Myers the hospital did not have the right equipment to safeguard the staff or patients relying on paper masks and aprons. But they did regularly test him for Covid- 19. Three tests were negative, the last one was positive.

From there he deteriorated rapidly but his family heard nothing from the hospital and couldn’t visit him. Finally they allowed Lesley to visit him and provided her for the first time a gown and a medical mask. By then he was in a coma and close to death.

On April 7 aged 70 he died. The family have not been able to organise a proper funeral.

But the hospital have followed up her case and have got proper protection equipment and are changing the way they handle future cases.

Lesley then encountered all the problems from the Department for Work and Pensions. She was hours on the phone trying to claim bereavement benefit. The DWP just cut her off.

But they acted very quickly to stop his state pension,PIP, and ban her from being able to drive his mobility car. They still haven’t bothered to collect it one month later and it is parked at the apartment.

She found herself left with living on £420 a month – £320 from her own PIP as she is disabled and just £25 a week bereavement benefit. The widow’s pension has been abolished by the DWP. She has bills of £150 a month for council tax and another £100 for the apartment management charge.

She said :” How I am supposed to survive on this on this amount?
” I do have savings but do not know how long I will live for so do not wish to rely solely on this as I’m sure you can appreciate – I am only 64! “

“I am fortunate to have the support of my daughter and some savings but I ask you this for someone with nothing and all payments stopped immediately how would they now continue?
“I am very concerned for other people left in the same situation or worse off than myself.
” I do not like to complain, I have expressed my sincere gratitude to the hospital for their care and my daughters have raised nearly £3000 for them and the Hospice of the Good Shepherd in memory of my husband and in order to help them both at a difficult time.
I feel like a statistic, and this is not right. I am a person who also needs to survive”.

She said her situation would have far better if she had already got her pension as of right.

” I have supported BackTo60 for a long time and I feel it is disgusting that they changed the pension age without properly informing people. I have paid in since I was 15. We are entitled to that money and there should be full restitution.”

BackTo60 have just launched a £10,000 crowdfunder so they can keep the issue in the public eye right up until the judicial review appeal in July.

They intend to use the money for a film that will highlight how Covid-19 has made life worse for many 50s women already suffering in poverty and having difficulty making ends meet.

You can donate to the crowdfunder here. It is something that needs exposing.

Bonuses for Universal Credit bosses as record benefit errors and fraud revealed at the Department for Work and Pensions

The annual report that reveals the damning failures of the ministry to keep a grip on benefit and error fraud and the high pay and pensions of the people running the Universal Credit programme

Benefit error and fraud has reached record levels at the Department for Work and Pensions and it is going to get worse, according to its own figures released in its annual report for the last financial year.

 For the 30th year running the National Audit Office has qualified the ministry’s £86.6 billion benefit accounts because it considers them to be inaccurate

The most damning section of the report is on Universal Credit – whose current and previous directors – have just received bonus payments up to £15,000 each for their work.

The full story is on byline here.

Revealed on Byline Times: How the DWP manipulated the pension figures to exaggerate the costs of helping the 50s women.

Department for Work and Pensions – still misleading the facts on 50swomen pensioners.

The Department for Work and Pensions has produced statistics to frighten the public into believing that compensating 3.8 million women born in the 1950s who lost out through the rise in the pension age from 60 to 66 will cost more than double the real price.

 A new DWP research report issued a day after judicial review hearing on June 5 and 6 and given widespread coverage in mainstream media put the cost at an eye watering £188 billion and £212 billion instead of a previous figure of £77.2 billion. The directly comparable figure hidden in a footnote is £91.1 billion at today’s prices.

The full story including how the DWP really knows that 50s women are badly off is in BylineTimes here. https://bylinetimes.com/2019/06/20/project-fear-how-the-dwp-is-trying-to-mislead-the-public-over-the-backto60-pension-costs/

Ministry tells court 3.8 million 50s born women had no right or remedy to stop them losing their pensions

Crowds of BackTo60 and Waspi supporters outside the High Court celebrating the hearing today

The 3.8 million women born in the 1950s who lost lost billions of pounds by the raising of the pension age from 60 to 66 had no right to expect to be told about the changes to their pensions, lawyers for the Department of Work and Pensions told a judicial review today.

Sir James Eadie,QC,  on behalf of Amber Rudd, the current work and pensions secretary, argued that the women  had no legal remedy to get their money back because the judges hearing the case could not challenge the primary legislation which authorised the change. He said constitutional grounds prevented the judges challenging any major primary legislation passed by Parliament.

The full story is on Byline Times here.

Permission granted: 50s Women win historic case to judicial review on pension rights

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50s women dancing in front of the Royal Court of Justice after the judge granted their request for a judicial review

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A High Court judge  yesterday gave the Back To 60 campaign permission to bring a judicial review against the Department for Work and Pensions over the raising of the pension age  for 3.8 million women born in the 1950s.

The Hon Ms Justice Lang – who is also known as Dame Beverley Ann Macnaughton Lang – ruled in favour of all the issues raised by barristers Catherine Rayner and Michael Mansfield on behalf of the women.

The ruling by the 63 year old judge obviously stunned the Department of Work and Pensions whose barrister, Julian Milford, asked for  66 days ( instead of the normal 14 days)  to prepare a fresh case against Back To 60. They were granted 42 days.

The  ruling means that a future  hearing BackTo60 have the right to argue their case that the government’s decision which affected the 3.8 million  women was both  a matter of  gender and age discrimination. In addition they can argue that the total failure of successive governments to review the arrangements to look at the hardship faced by many of the people made  matters worse.

As is stated on the lawyer chambers site:

” the taper mechanism used to raise the date on which women receive state pension, in combination with a failure to properly inform women of the changes was unlawful because it discriminates on grounds of sex, age and sex combined and age.”

Catherine Rayner told the judge that there had been no fewer than 60 changes to the date  when a 50s woman could get a pension  and that the main driving force for the government was to save money. She said the equivalent of £5.3billion had been taken from this group of women. She described it as an ” historic inequality ” which was made worse by the lack of knowledge among the women themselves  because the government never informed them directly about the changes.

Julian Milford for the DWP, admitted that this was part of a cost saving for the government but also said it was about equalising the pension age between men and women.

He argued that there should be no judicial review of this because it was about primary legislation which had been widely debated in Parliament in 1995 and it was far too late to call it into question.

He also argued that a ruling by the European Court  of Human Rights which meant that pensioners who had retired to Canada, Australia, New Zealand and South Africa were not entitled to uprated pensions meant that the women had no case to ask for a judicial review about changing their pensions.

Both these points were rejected by the judge who said that even though the act was passed 23 years ago the fact that its impact was causing problems for the women now meant  the review could go ahead.

The government also revealed that the private pensions industry is  uneasy about the women winning their case because it could force them to pay out occupational pensions five years earlier to some women – if their contract with companies meant it was payable on the day they could collect their state pension.

As the 7BR website says:

“The hearing will allow a detailed examination of complaints made by made by women born in the 1950s, and championed by groups such as #backto60 and WASPIE, as well as their political representatives. The case raises legal questions about sex and age discrimination in the mechanisms chosen by government to implement a policy; the responsibility of Government to inform people of significant changes to State Pension entitlement and of the applicability of the EU directive on Equal Treatment in Social Security provision.”

My view is that it has significant implications for Westminster and Whitehall.

It means that a judge has quashed the views expressed by financial commentators  like  Frances Coppola and other people connected to the private pensions  and banking industry that there was no chance of a judicial review. It has also called into question the arguments they used over primary legislation and the  ECHR court ruling.

It will add to pressure on the Labour Party leadership to promise to do something for these women whose cause is championed  by Laura Alvarez, the partner of Jeremy Corbyn, and whose shadow chancellor, John McDonnell, is well aware of the issue, and predicted the women would win a review.

It will put enormous pressure on Amber Rudd, the new works and pensions secretary, who is already having to cope with the backlash over the mess caused by universal credit and will now have to seriously address the plight of the 50s women. It is also a  blow to the reputation of Guy Opperman, the pensions minister, who all but nearly misled Parliament by telling them that the judicial review had already been rejected.

And I am afraid the All Party Group on State Pension Inequality for Women in Westminster will have to buck their ideas up and come behind this review rather than seeking small sums of compensation for the affected women.  By taking this radical stand  and going for the jugular BackTo60 have shown the way. They have not won yet but they have got much farther than anybody thought.

 

 

 

 

 

Exclusive: Case for Judicial Review for BackTo60 challenge to government on pensions set for November 30

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Royal Courts of Justice – venue for handing in the papers for a judicial review for the 50s women

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The High Court is to hear the case for a judicial review into the government’s mishandling of the raising of the pension age for 50s women on November 30.

The court granted a two hour hearing today.This means that Michael Mansfield and his team will argue the merits of the case for a judicial review.

The Department for Work and Pensions will oppose any judicial review.  The judge  will decide whether it can go ahead.

The granting of a two hour hearing  is significant in the sense that the court has decided that the merits of both sides of the argument  must be examined thoroughly. Previously the court had thought that 30 minutes was enough to hear the arguments – suggesting that it could be turned down without much debate.

The announcement is a victory for the lawyers arguing the  case and for BackTo 60 in taking such an uncompromising stance. The government has so far refused to budge an inch in recognising the grievances of the 3.8 million women who have lost out – some of them living in dire poverty as a result.

The case will be backed up by the paper from Jackie Jones, a law professor at the University of the West England She has produced the report,  which shows that this group of women have suffered discrimination contrary to an international  convention signed by successive UK governments. It is not a legal document but it is an expert opinion.

 

Judicial Review of government’s handling of 50s women pension changes lodged at High Court

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Royal Courts of Justice – venue for handing in the papers for a judicial review for the 50s women

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Back to 60, the campaigning group  who are supported by 738,000 of the 3.9 million 50s women waiting up to six years to get their pensions, lodged a claim  at the High Court against the  Department for Work and Pensions yesterday.

This is the first stage of taking real action to put right the injustice suffered by the women ever since the government embarked on a policy of continually raising the pension age.  It will be followed by a High Court hearing where a judge will be asked to allow the review to go ahead. It is bound to be challenged by the government which is determined not to pay up but ministers will have to justify their actions.

Backto60 lodged the documents with only 48 hours to spare as the courts  start their  summer recess tomorrow and  the courts will not hear cases  until  after October 1.

The move is the culmination of action taken by the group which now involves support  on the issue from the Equality and Human Rights Commission, which intends to raise the issue at the United Nations, the Fawcett Society and  other ampaigners.

A legal statement from Binberg Peirce & Michael Mansfield QC reads:

“The basis of the legal challenge is that the pension policy implemented by successive governments in respect of women of a particular age group (those born in the 1950s) constitutes a gross injustice and is discriminatory.  The impact on the economic, social and mental well being of these women, who rightly enjoyed a perfectly legitimate expectation of satisfactory provision in retirement, has been devastating.

“The extent of individual distress and hardship is only now becoming evident through real stories of women around the UK. It is deeply ironic that all of this is done in the name of equalisation and equality, when the very means employed to achieve this are themselves discriminatory.

“It is intended that the current pension policy be subjected to both public and judicial scrutiny and, therefore, steps are now being taken towards mounting a judicial challenge.”

At the same time Stephen Lloyd, Liberal Democrat MP for Eastbourne, whose coalition government made matters worse for 50s women by backing an acceleration of the rise in pension ages, has finally got a meeting on behalf of Waspi with the Ombudsman to discuss whether there was maladministration in not informing women.

His comment is picked up by Frances Martin:

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The government is going to face challenges from all sides this autumn.