Universal credit claimants being underpaid as they are 'left in the dark' about entitlements, charity warns

'Inadequate' communications and administrative errors risk claimants being underpaid, finds report

The Child Poverty Action Group (CPAG) accused the Department for Work and Pensions (DWP) of having “inadequate” communications and of making administrative errors likely to result in claimants receiving the wrong amount (Getty)

Universal credit claimants are routinely “left in the dark” about how much they should receive and how they can challenge decisions, putting them at risk of being underpaid and falling into debt, a charity has warned.

“Inadequate” communications and administrative errors by the Department for Work and Pensions (DWP) are likely to result in claimants receiving the wrong amount, according to the Child Poverty Action Group (CPAG).

One in five of the 1,110 universal credit cases referred to the charity’s Early Warning System - which gathers and analyses cases from welfare rights advisers across the UK - involve a DWP administrative error, it said.

In one case, a working mother who had two part time jobs claimed universal credit and the award was much lower than she was expecting, but she couldn’t identify from her statement that there was anything wrong with it.

When she saw a welfare rights adviser, they picked up that there was no child element included for her daughter and no work allowance included for a working parent.

This meant they were approximately £400 worse off each month as a result of errors in their payment calculations.

In another case, a grandmother, mother and children living together in a three bedroom property in which all of the bedrooms were occupied were wrongly subject to the bedroom tax, meaning they were underpaid for months.

CPAG said universal credit helpline staff were often unable to explain how a claimant’s award had been worked out because they didn’t have access to payment calculations, which in the vast majority of cases are processed automatically on a digital system.

The charity is now calling for more information to be given in claimants’ statements including a full breakdown of how awards have been calculated and a nil entry for allowances claimants are considered ineligible for so that errors can more easily be identified.

It also wants the online universal credit account, which claimants manage their claim and communicate with advisers with, to be redesigned so that all decisions about a their awards are stored in one place and accessible.

They are currently “scattered in different parts of a claimant’s online account”, CPAG said.

The charity's chief executive Alison Garnham said:“Transparency should be a the heart of a fair social security system but our research shows universal credit claimants do not always understand the amounts they’re getting so it’s harder for them to pick up on mistakes or to predict how their awards might change.

“That is all the more worrying as the number of universal credit claims is set to double this year to 3 million and the scope for misunderstandings, omissions and errors is vast. And because UC is an all-in-one benefit, with all your eggs in one basket, when things go wrong for claimants the financial fallout can be dire.”

Ms Garnham said there were “practical, inexpensive” changes the DWP could make to “clear the fog”, such as improving the information it provides so that universal credit claimants are not “floundering in the dark about their award”.

“Clear and accessible information on how decisions are made and your right to appeal is the bare minimum we should expect from a modern benefit,” she added.

It comes as the a separate report from a parliamentary committee said the DWP must “prove it is up to the job” before a single existing benefit claimant is moved onto universal credit by a process known as “managed migration”.

The House of Commons Work and Pensions Committee said Amber Rudd's department should immediately set up “tests of operational readiness” based on recommendations from a number of experts and should ensure it can meet those tests before beginning pilots of the migration.

Committee chair Frank Field said: “Anyone who sees their income slashed or their circumstances and life chances reduced, or any of the other messes universal credit is getting people across this land into, will find no comfort in learning it didn't happen on purpose.

”Does DWP want to explain to them it didn't bother to find out how they might be affected? Will it be a comfort to learn DWP did take a look at that, but didn't bother to apply its findings? DWP should not move one person onto UC until it does test, and does learn, and proves it is ready to safely do so.“

A DWP spokesperson said: “More than 1.8 million claimants receive a monthly statement advising them of their entitlement, how it has been calculated and what to do if they think the payment is incorrect. Help is also available from work coaches, the freephone Universal Credit helpline, gov.uk and through our ‘Help to Claim’ partnership with Citizens Advice.”