Research and analysis

Summary: Universal Credit full service omnibus survey: findings from 2 waves of tracking research with recent Universal Credit full service claimants

Updated 4 March 2019

Authors: Trinh Tu, Kelly Maguire and Natasha Jones (Ipsos MORI Social Research).

Background

Universal Credit is paid to people who are on low incomes or out-of-work. It is paid monthly in arrears and is being introduced in stages across Great Britain. It replaces 6 benefits:

• Housing Benefit
• Income Support
• income-based Jobseeker’s Allowance (JSA)
• income-related Employment Support Allowance (ESA)
• Working Tax Credit
• Child Tax Credit

Universal Credit full service is now available everywhere in Great Britain, and requires claimants to have an online Universal Credit account to manage their claim.

Research aims

The purpose of the research was to measure how well new claimants understood the claim process and their rights and responsibilities, with a view to meeting their information needs.

The research focused on the following aspects of Universal Credit:

• the initial claim process, including knowing how to apply for an advance
• the work allowance and taper rate
• conditionality and sanctions
• use of formal childcare and applying for help with childcare costs
• knowledge of how to apply for housing costs as part of Universal Credit

Methodology

Two waves of survey were undertaken with a representative sample of claimants in terms of gender, age, single or couple claim and conditionality group. A new sample was drawn for each wave. Each wave comprised:

• an online survey of 1,000+ claimants
• a telephone survey of 200 claimants who did not respond to the online survey – the telephone survey focused on claimants who were under-represented in the online survey, to ensure that the overall results were representative

Wave 1 of the survey interviewed 1,586 Universal Credit claimants during October to November 2017. Wave 2 took place 6 months later and interviewed 1,445 different Universal Credit claimants during May to June 2018.

Main findings

Overall understanding of Universal Credit

The majority of claimants at both waves understood what they needed to do to claim Universal Credit and knew what would happen if they failed to comply with their Claimant Commitment (74% and 80% respectively). At wave 2, claimants’ knowledge about these aspects – in particular how to claim Universal Credit – had increased compared to wave 1 (+7 percentage points and +3 percentage points respectively).

Specifically, half (48%) of claimants surveyed at wave 2 reported that they were made aware of all the main requirements when they first made their Universal Credit claim, such as the need to have a bank or similar account and email address, being informed that Universal Credit is paid monthly and the first payment can take up to 6 weeks^{[footnote 1]}, and the option to apply for an advance which would have to be paid back through their Universal Credit. This compares favourably with 36% who were fully aware at wave 1.

Notably, awareness of, and application for, advance payments have increased: at wave 2, 75% were aware of advance payments and 61% had applied for it whilst waiting for their first Universal Credit payment (+15 percentage points in awareness and +11 percentage points in application compared to wave 1). The average advance received was £390.

Attitudes towards the work incentive features of Universal Credit were also more positive than at wave 1: 44% agreed that they are always better off working under Universal Credit (+7 percentage points) though knowledge on how much people can earn and still claim Universal Credit remained low (35% versus 32% at wave 1).

The types of benefit claimed prior to Universal Credit full service is an important differentiator in terms of claimants’ levels of knowledge about Universal Credit. Typically, former JSA claimants were more knowledgeable about Universal Credit than former tax credit, ESA and Income Support claimants. Between waves 1 and 2, understanding of, and attitudes towards, Universal Credit improved among former tax credit claimants but remained stubbornly low among former ESA claimants.

Work allowance and taper rate

Claimants who have responsibility for a child or have limited capability for work are eligible for a work allowance. This is the amount claimants can earn before their Universal Credit payment is affected. There are 2 set levels of work allowance, depending on the circumstances of the household. Those whose claim includes Housing Benefit can earn £192 and those without can earn £397 before their Universal Credit claim is affected. Once claimants earn more than their work allowance, their payments will be reduced at a steady rate (the taper rate). Currently, for every £1 earned over the work allowance, Universal Credit payments are reduced by 63p.

Awareness of work allowance eligibility and taper rate were very low and similar to wave 1: just 2% of claimants were able to correctly identify both of the groups eligible for a work allowance, and 3% knew the taper rate. Seven in 10 claimants (68%) did not know whether they qualified for a work allowance, with claimants who were doing some paid work equally ill informed. Many (72%) of those who thought they qualified for a work allowance did not know how much they could earn before Universal Credit payments are affected.

Conditionality and sanctions

Everyone who receives Universal Credit is placed in a conditionality group based on their circumstances and work capability. The group they are in determines what is expected of them during their claim. Claimants who are required to take steps to get work, or move closer to it, or to increase their hours or income if they are already working, will agree a Claimant Commitment with their work coach, setting out the steps they will take. Failure to action these responsibilities could result in a temporary reduction to their Universal Credit, though claimants may appeal against this decision.

Half of claimants (51%) at wave 2 were fully informed about the factors that could lead to Universal Credit payments being stopped or reduced, but just 14% were aware of the implications to their benefit payments. However, over half (54%) knew that they could appeal against their benefits being stopped or reduced under any circumstance. Findings are similar to wave 1.

Knowledge about conditionality and sanctions was especially poor among former Income Support and ESA claimants, notably because they would not have been introduced to these conditions in their previous claims. In contrast, former JSA claimants were more knowledgeable about both, as were ‘new’ claimants (people who were not claiming a benefit immediately prior to this Universal Credit claim).

Childcare

Claimants who are eligible for Universal Credit may be able to claim back up to 85% of their ‘formal’ childcare costs, usually if they are doing some paid work or have a job offer. The most parents can claim back each month is £646 for one child or £1,108 for 2 or more children.

Parents’ awareness of available childcare support remained low and similar to wave one: just 5% knew they could claim formal childcare costs for all their children regardless of age, and 8% knew they could claim for more than 75% of their total childcare costs. The majority of parents (83%) were able to identify at least one acceptable evidence of payments required to claim formal childcare costs, but awareness of how often they must report childcare payments to the jobcentre remained low (11% knew they must report monthly). Parents using formal childcare were generally more knowledgeable than average about the childcare element but the overall picture is one of low awareness.

More parents at wave 2 had claimed formal childcare costs than at wave 1 (38% versus 32%). Half (52%) of working parents had claimed formal childcare, an increase of 11 percentage points. The most common reason given for not claiming was because of doubts over eligibility – cited by 31% of parents who did not make a claim, rising to 41% of parents who were doing some paid work.

Housing

Claimants who are eligible for Universal Credit can get help paying for their housing if they rent from a private landlord, housing association or local authority, or to cover interest payments on their mortgage and service charges. Housing payment is included as part of the monthly Universal Credit payment and claimants are responsible for paying rent to their landlord. Once they’ve started claiming housing payment, claimants need to report any changes in circumstances to the jobcentre.

Claimants must apply directly to their local authority if they want to make a claim for Council Tax Reduction.

The large majority of claimants at wave 2 who paid rent received help with their housing costs, and over three-quarters (77%) were made aware that they have to pay it directly to their landlord when they first made their claim for Universal Credit. Claimants were less familiar with the requirement to apply to their local authority for Council Tax though knowledge has increased since wave 1 (59% versus 54% at wave 1).

Claimants at wave 2 who paid rent knew they needed to keep the jobcentre informed about changes (76% – an increase of 3 percentage points), but they were much less clear about what would happen to their Universal Credit payments if they regularly missed their rent payments (25% – no change compared to wave 1).

Conclusions

Over a period of 6 months, this research has shown high and improving levels of understanding about Universal Credit among full service claimants who recently made a claim for Universal Credit. There are signs that claimants’ attitudes are changing too. More claimants now believe that under Universal Credit they are always better off working. However, there’s more that the Department for Work and Pensions can do to shift attitudes further such as ensuring that claimants have a better understanding of the work incentive features of Universal Credit. As part of this, more needs to be done to ensure that parents are better informed about the childcare element of Universal Credit. Claimants with children, including those who are working and using formal childcare, continue to have very poor awareness and understanding of all aspects of the childcare offer. However, it should be noted that the claimants surveyed were relatively new (they were interviewed around 3 months after they made their claim), and claimants’ understanding of these more detailed aspects of Universal Credit may take longer to embed.

Strategies to improve awareness and understanding of Universal Credit will also need to bear in mind that former JSA claimants and ‘new’ claimants are generally well informed on many of the aspects covered. Former tax credit claimants have displayed the most positive change in awareness overtime, and it may be that some of the approaches used on this group can be adapted to increase understanding among former ESA and Income Support claimants.

Read the full report Universal Credit full service omnibus survey: findings from 2 waves of tracking research with recent Universal Credit full service claimants.

1. In February 2018, the 7 days rule was removed so the first payment at wave 2 was 5 weeks (instead of the 6 weeks at wave 1). ↩