House of Commons Library

Universal Credit and the claimant count

Published Friday, January 18, 2019

This briefing paper explains how Universal Credit is increasing the number of people claiming unemployment benefits, by requiring a broader group of claimants to look for work than was the case under Jobseeker’s Allowance. There has been a marked increase in the claimant count over the past year in areas operating Universal Credit “Full Service”, where the rollout of Universal Credit is more advanced. On the 22 January 2019, the Department for Work and Pensions will publish an ‘alternative’ claimant count. This will model what the claimant count would have been if Universal Credit had been fully in place since 2013.

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What is the claimant count?

The claimant count is the number of people claiming benefits for the principal reason that they are unemployed. Before 2013, this was just the number of people claiming Jobseeker’s Allowance.

Following the introduction of Universal Credit from 2013 onwards, the claimant count is now measured as the number of people claiming Jobseeker’s Allowance plus the number of Universal Credit claimants who are required to look for work.

Universal Credit

Universal Credit is a new benefit which is being rolled out in stages. It replaces six existing benefits and tax credits (“legacy benefits”):

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Child Tax Credit
  • Housing Benefit

By bringing together out-of-work benefits and tax credits, Universal Credit provides both in- and out-of-work support to claimants. It was introduced with the aim of simplifying and streamlining the benefits system, improving work incentives, tackling poverty among low income families, and reducing the scope for error and fraud.

Full Service and Live Service

Full Service and Live Service describe the computer systems used to deliver Universal Credit.

  • In Full Service areas, Universal Credit is available to all claimant types.
  • In Live Service areas, Universal Credit was limited to claims which were relatively simple. For more complex claims, people continued to claim legacy benefits.[1]

The Live Service was available throughout Great Britain by Spring 2016, but from May 2016 national rollout of the Full Service – which replaced the Live Service – began. By December 2018 Full Service was available throughout the whole of the United Kingdom.[2]  The Live Service closed to new claims on 1 January 2018.  Existing Live Service claimants have three months to transfer to their claim to the Full Service when it is introduced in their area.  With Full Service rollout now complete, the Live Service is expected to close completely by Spring 2019.[3]

In Full Service areas existing legacy benefit claimants may move onto Universal Credit if they experience a change of circumstances such that they would have had to make a new claim for a different legacy benefit. As new claims for legacy benefits are no longer possible, only Universal Credit can be claimed.  The DWP refers to this as “natural migration.”

Existing legacy benefit claimants whose circumstances do not change will remain on their existing benefits until they are invited to make a claim for Universal Credit at the final “managed migration” stage. This is expected to begin in late 2020 and be completed by December 2023, but will be preceded by a managed migration pilot involving 10,000 households starting in July 2019.

How is Universal Credit affecting the claimant count?

There has been a marked increase in the claimant count in areas operating Universal Credit Full Service, and this is more pronounced in those areas that have been operating Full Service for longer.

In jobcentres which moved to Full Service in 2017, the claimant count has increased by 42% over the past year. However, in areas where Full Service has not been or was only recently introduced, the claimant count has decreased by 3%.

Why should Universal Credit affect the claimant count?

There are a number of ways in which the claimant count has been affected as rollout of Universal Credit progresses:

Universal Credit requires a broader span of people to look for work than was the case for legacy benefits

The introduction of Universal Credit means that more claimants are required to look for work as a condition of receiving the benefit. This is referred to as “conditionality”.

For example, someone out of work who previously claimed Child Tax Credit or Housing Benefit but not Jobseeker’s Allowance was not required to look for work. Under Universal Credit they are required to look for work, subject to certain exceptions.

Similarly, under Universal Credit, the partners of claimants are now required to seek work. Previously, if someone was in employment and claiming tax credits or housing benefits but their partner was not in work (and not claiming Jobseeker’s Allowance), there was no requirement for their partner to look for work. This is no longer the case, subject to an earnings threshold and certain exceptions.[4]

The OBR has estimated that Jobseekers Allowance-style conditionality will be extended to around 300,000 additional claimants.

Additional conditionality will also be applied to Universal Credit claimants who would otherwise have received Education and Support Allowance, and the OBR has estimated that around 150,000 claimants will be required to look for work as a result. Furthermore, the OBR has forecast that around 450,000 newly-eligible Universal Credit claimants will face further additional conditionality requirements (though not necessarily an obligation to look for work).[5]

From the point of view of the statistics, this has the effect that more people are brought within the coverage of the claimant count. This has particularly been the case since the rollout of Universal Credit Full Service, leading to the large increases in the claimant count that has been seen in those areas that have moved to Full Service.

New claimants who are awaiting or appealing Work Capability Assessments are being required to look for work

Some of the claimants who under the legacy system would previously have claimed Employment and Support Allowance (ESA) are initially subject to all work-related requirements upon starting a new claim to Universal Credit, pending their Work Capability Assessment.

New ESA claimants who can provide a ‘fit note’ are treated as having a limited capacity for work pending their Work Capability Assessment. This is not the default position under Universal Credit.

Although a claimant must meet with a Jobcentre Plus Work Coach within seven days of applying for Universal Credit to agree the conditions attached to their receipt of benefits, the period until a Work Capability Assessment takes place is often much longer. During this period, Work Coaches set conditionality based on their understanding of the claimant’s health condition, but there are concerns that Work Coaches may struggle to identify claimant support needs accurately.[6]

Those claimants who are required to look for work will be included in the claimant count statistics. We might expect some to drop out of the claimant count again once the Work Capability Assessment has taken place, assuming they are judged to have limited capability for work, but they can remain on full conditionality for an extended period (and thus remain in the claimant count statistics).

In addition, there have been reports that some claimants moving from ESA onto Universal Credit who have limited capability for work are being required to undergo a new Work Capability Assessment, and in the meantime are subject to full conditionality. Under Regulation 19 of the Universal Credit (Transitional Provisions) Regulations 2014 (SI 2014/1230 as amended), these people should be treated, from the outset of their Universal Credit application, as having limited capacity for work without the need for a Work Capability Assessment. The Child Poverty Action Group has reported this as one of the most common problems highlighted by advisers. [7]

Publication arrangements

ONS removed the seasonally adjusted claimant count in the PDF version of its monthly UK Labour Market and Regional Labour Market Statistics bulletins from March 2017, stating that “it may now be providing a misleading representation of the UK labour market”.[8] ONS had already designated the claimant count statistics as “experimental” from June 2015 (meaning the statistics are still in development) due to the impact of Universal Credit.

Data is still included in online tables published alongside the bulletins on the ONS website, and the ONS continues to publish non-seasonally adjusted data for parliamentary constituencies, local authorities and other geographies on the Nomis website.

The Library continued to publish constituency data on our Constituency data dashboard and in our monthly briefing paper, People claiming unemployment benefits by constituency.

Adjusting for Universal Credit: an alternative claimant count series

The continued increase in claimant numbers in Full Service areas means that the claimant count is no longer a good indicator of trends in the number of people who are looking for work. In response, following a consultation exercise, the Department for Work and Pensions (DWP) is intending to publish an ‘alternative’ claimant count series when the next set of labour market statistics is published on 22 January 2019. [9]

The alternative series will model what the count would have been if Universal Credit had always been in place since 2013. This means that it will include those claiming unemployment benefits as well as those people who may not have been claiming at the time, but who would have been required to look for work had Universal Credit been in place. Therefore we would not expect the alternative series to show an abrupt change in trend when an area starts operating Full Service (unlike the main claimant count series).

Specifically, the alternative series will include:

  • People claiming Jobseeker’s Allowance
  • People claiming Universal Credit who are required to seek work (minus those awaiting a Work Capability Assessment)
  • ‘Additional’ claimants who may not have been claiming unemployment benefits at the time, but who would have been required to seek work had Universal Credit been in place.

The DWP will publish alternative claimant count figures for every month from January 2013 to November 2018. Figures will be available for all parliamentary constituencies in Great Britain. The initial publication will not include figures for Northern Ireland, but these may become available at a later date. New figures will be published every quarter. [10]

 

Notes:

[1]     For a more detailed comparison of the Full Service and the Live Service see section 2.1 of Commons Library briefing CBP-8299, Universal Credit roll-out: 2018-19, 14 June 2018

[2]     DWP, Universal Credit transition to full service, 12 December 2018. The Full Service was rolled out on Northern Ireland between September 2017 and December 2018.  The Live Service was never introduced in Northern Ireland.

[3]     DWP, Touchbase, edition 129, September 2018

[4]     PQ 66330 [Universal Credit], 7 March 2017

[5]     Office for Budget Responsibility, Welfare trends report, January 2018, p105

[6]     Work and Pensions Committee, Universal Credit: support for disabled people, HC 1770 2017-19, paras 73-78

[7]     Child Poverty Action Group, The top universal credit issues, July 2018

[8]     Office for National Statistics, Publication arrangements for the Claimant Count, 23 February 2017

[9]     DWP, Alternative claimant count, GB (experimental), 18 December 2018

[10]    DWP, Proposals for a new statistical series to count unemployed claimants, 16 October 2018

Commons Briefing papers CBP-7927

Author: Andy Powell

Topics: Statistics policy, Unemployment

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