Design flaws in Universal Credit for couples revealed as claims soar

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Fran Bennett is a Senior Research and Teaching Fellow here in the Department of Social Policy and Intervention. Earlier this year, Fran was appointed as a Visiting Fellow at the Institute for Policy Research (IPR), and is working as co-author on the ‘Couples balancing work, money and care: exploring the shifting landscape under Universal Credit’ ESRC-funded project. Today the project releases their first report 'Uncharted Territory: Universal Credit, Couples and Money'. 

As the numbers of new claims for Universal Credit reach three million, a new IPR report reveals the complex issues couples experience with this new benefit.

Researchers behind the report - 'Uncharted Territory: Universal Credit, Couples and Money' [released today, Monday 22 June] - say the way Universal Credit is designed and delivered does not fit the way modern couples and families live their lives.

In their report, the researchers highlight how someone claiming Universal Credit in a couple might not realise that how much benefit they receive, or whether they receive any at all, depends on both partners’ income and needs. Some claimants found as well that they had inherited debts from their partner, sometimes from a period long before the couple had even met. Repayments were automatically deducted from the couple’s Universal Credit.

The study found that couples often struggled with the unpredictability of the Universal Credit payment, which could vary significantly from month to month, especially for dual-earner couples with two wages paid at different times. The automated nature of the calculation and payment process transfers the risk and onus on to claimants - and in particular women, who mainly dealt with the risk and uncertainty and the resulting administrative burden, described by some as a ‘nightmare’.

The fact that Universal Credit is a single payment between the partners in a couple was a design feature that some couples found difficult. Women in particular were not keen on joint accounts and the amalgamation of different benefits into one could upset the delicate balance of both partners having some income of their own. Some women had suffered from financial coercion and control in previous relationships, which had been one reason for them breaking up.

But the payment of the whole monthly lump sum to the woman was not a solution either. The research found that the woman was already more likely to take on the burden of managing the entire household budget, as well as the Universal Credit claim itself.

Dr Rita Griffiths, lead author of the report, from the IPR at the University of Bath, said: 'Having to decide who should get the Universal Credit and how the money should be distributed and managed was particularly hard for couples who had no other source of income. It sometimes obliged one partner to go ‘cap in hand’ to the other to ask for a share of the money. It could also allow one partner to take control of the household’s entire monthly income.

Because most of the couples we interviewed were in committed relationships and trusted each other, this generally didn’t happen. However, many felt that a single payment harked back to a bygone era of male breadwinners, and was out of step with modern relationships in which both partners go out to work, manage their own money and contribute to the household finances.'

Co-author Fran Bennett, from the Department of Social Policy and Intervention at the University of Oxford, added: 'With an unprecedented number of additional Universal Credit claims brought about by the Covid-19 pandemic, policy makers need urgently to learn from these findings so others do not find themselves in the same boat as our participants.'

We are calling on the Government to give more priority to reconsidering how couples are treated in the Universal Credit system. In the first instance, giving access to some income for both partners would be safer and fairer. The government needs to create more security for claimants by tackling the reimbursement of childcare costs in arrears, and the unpredictability of Universal Credit payments, which can affect two-earner families the most. Policy changes more widely should ensure some financial independence for both partners as the best basis for modern relationships and how families live their lives today.'

Based on interviews with nearly 100 participants in more than 50 claimant households across England and Scotland, the research finds that, for some, the transition to Universal Credit has proved relatively easy. But, for many others, it has exacerbated financial strains and created additional difficulties with which they must grapple on a daily basis.

The staged rollout of Universal Credit, which replaces most means-tested benefits and tax credits for people on low incomes both in and out of work, meant that single people without children moved on to it first. This is the first independent research to focus on couples claiming Universal Credit and was carried out by researchers from the Universities of Bath IPR and Oxford, funded by the ESRC.

Whilst previous studies often focused on the poorest and most vulnerable groups, participants in this research were a much broader cross-section of claimants, making their experiences more relevant to the current crisis.

For the full report and technical appendix see 10.5281/zenodo.3898265.

Notes on the study

  • In the 53 households in which the researchers conducted interviews, in just under half (24) there was at least one earner, and no one in work in just over half (29). Within households, Universal Credit was the main income source for 31 families. Of the 41 couples interviewed, 10 were dual-earner, 13 were one-earner and 18 had no earners. 30 couples had dependent children and there were 9 lone parents and three single claimants. 12 couples were married, the rest were cohabiting, and there were several ‘blended’ families and stepfamilies.
  • This is the first stage in a three-year, longitudinal qualitative research project funded by the Economic and Social Research Council (ES/R004811/1). The participants will be interviewed again in autumn 2020, to find out what changes there have been since the first interviews, including how couples with children make decisions about work and care.
  • Universal Credit was proposed in 2010, its rollout began in 2013 and, at the time of writing, it was expected by the Government to be fully in place by late 2024.
  • Key design and delivery features of Universal Credit include: automated monthly assessment; one monthly award, paid in arrears, resulting in an initial five-week wait, though claimants can access repayable advances; for couples, payment of Universal Credit by default into one bank account, joint or individual, nominated by them; a disregard of some earnings (work allowance) for those with children or with limited capability for work; integration of help with childcare and housing costs into the single award; monthly calculation of Universal Credit, with entitlement reduced if appropriate by a single taper in line with (increased) earnings, reported for most claimants by employers through PAYE via HMRC’s Real Time Information system; reporting of changes of circumstances, with only those circumstances applying on the assessment date counting for that month’s award (paid a few days later); online claiming for most, and management of the claim via an online account and journal.
  • How Universal Credit works for couples: For couples, Universal Credit has a complex mix of individual and joint aspects with potentially far-reaching consequences for choices about paid work and care, and for the distribution of resources and power inside the household: Universal Credit is jointly assessed for couples, like other means-tested benefits. A claim is a joint claim, as for some other benefits and tax credits. Both partners must agree an individual claimant commitment for the claim to go ahead as a joint claim. Work conditionality is now extended to both partners in couples with dependent children, depending on the age of the youngest child; for the ’lead carer’, this replicates arrangements for lone parents. Couples with children have to nominate the ‘lead carer’, and the online claims process now suggests payment should be made to them. Whilst conditionality is in principle individual, the earnings thresholds governing what conditionality regime is applied are both individual and joint. Partners are jointly responsible for the claim, including reporting changes and repaying any overpayments. There is only one work allowance (earnings disregard) for a couple.
  • Couples on Universal Credit: According to the House of Commons Work and Pensions Select Committee, of the estimated 6-7 million households expected to be claiming Universal Credit when it is fully rolled out (representing half of all families with children), about 2.9 million will be couple households. (This estimate was made in 2019, before the current pandemic.)
  • Report: Uncharted Territory: Universal Credit, couples and money, by Rita Griffiths, Marsha Wood, Fran Bennett and Jane Millar. This is the first report from the research project [‘Couples balancing work, money and care: exploring the shifting landscape under Universal Credit’](/projects/couples-balancing-work-money-and-care-exploring-the-shifting-landscape-under-universal-credit/ ), 2018-21, funded by the Economic and Social Research Council (ES/R004811/1).