Chris Brill, Homeless Link's Policy manager gives an overview of the Universal Credit full service, which is currently being rolled out across the country.
How will Universal Credit claimants experiencing homelessness be paid?
Universal Credit Full Service is the new system for applying, managing and receiving welfare benefits. New welfare claimants in Universal Credit Full Service areas receive one Universal Credit payment, which replaces Housing Benefit, income-related Employment and Support Allowance (ESA), income-based Jobseeker’s Allowance (JSA), Child Tax Credits and Working Tax Credits and Income Support.
People currently on legacy benefits will be transferred to Universal Credit if they are in a Universal Credit Full Service area and have a relevant change in circumstances. Although only around 100 Job Centre Plus currently have full-service, this will increase by around 50 Job Centre Plus a month from October, with national roll-out expected to be completed in September 2018. Any remaining legacy claimants will be moved onto Universal Credit from July 2019 to March 2022.
How will the majority of Universal Credit claimants be paid?
Universal Credit has been designed so that the majority of claimants will receive payment directly into a bank, building society or credit union account. This is considered by Government to be the ‘fastest, most secure and efficient way for people to receive their money,’ which further ‘opens doors to other financial products and savings.’
A standard current account will be the priority for many people, though many banks offer basic bank accounts to customers who are ineligible for a bank’s standard current account, provided they are legally resident in the EU. Basic bank accounts minimise the risk of unarranged overdrafts and end bank charges if a direct debit or standing order fails. Customers of such accounts are also able to use the same services, e.g. ATM and Post Office counter access, as the bank’s other personal current account customers.
What can be the difficulties in opening bank accounts?
Many people have found it extremely difficult to open a bank account if they are rough sleeping, sofa surfing, or have no fixed abode; primarily because of problems in obtaining an adequate proof of address which a bank will accept. It can also be equally hard for a person living in a hostel and/or supported housing to open an account, due to a lack of supporting documentation.
Homeless Link members have reported that where they have developed relationships with a designated contact at a specific bank branch they have had some successes in opening bank accounts. However, this experience varies by institution and branch. Although guidance encourages institutions to consider a wide range of forms of identification, banks will have their own policies on identification and on the circumstances in which other checks should be undertaken.
Can Post office accounts and third party accounts still be used?
The Government website is clear that Universal Credit can be paid ‘a different way if you have problems opening or managing an account,’ and that Job Centre Plus Work Coaches should be contacted to explain the process of receiving payment.
Homeless Link members have reported examples of Work Coaches advising claimants that Post Office accounts can no longer be used to receive a Universal Credit payment. However, Homeless Link has been in discussions with DWP who has confirmed that recent internal communications have been issued to Work Coaches to remind them that where a claimant is unable to open or manage a transactional account, DWP can pay Universal Credit into a Post Office card account. There is also the option for the first payment to go into a third party's account (usually for one payment only), to enable time for a new payment account to be processed.
What about the Change Account?
Homeless Link and other organisations with an interest in financial inclusion have helped shape the Change Account. This has many of the benefits of a bank account, such as a debit card, dedicated sort code and account number, direct debits and budgeting wallets. However, there is no overdraft facility so people can only spend the money they have available in their account without the risk of incurring interest or other penalty charges.
There is no credit check associated with opening a Change Account, so individuals with a poor credit history or anyone who has been made bankrupt could still qualify. Where people are not able to provide adequate documentation for identification purposes, Homeless Link members are able to certify the identity of an individual and establish their office as the residential address (for purpose of delivery of the card).
Details of the benefits and associated costs of the Change Account can be found here: https://www.thechangeaccount.com/. For those interested in finding out more about the Change Account, please contact David Spencer on 07730 585289 or firstname.lastname@example.org.
Ensuring that people have a way of receiving their Universal Credit payment in advance of making a claim is likely to reduce associated delays in receiving an initial payment. Please contact Chris Brill at email@example.com if you have any problems or successes in opening accounts so that we can share this learning with our members and advise DWP when and where things are not working.
Details of when Job Centre areas will transition to Universal Credit Full Service can be found here: https://www.gov.uk/government/publications/universal-credit-transition-to-full-service
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Chris is our policy manager with particular responsibility for a number of areas including welfare and migration.
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