Universal Credit - coming to an advice centre near you...

(Our thanks go to an anonymous contributor from a local authority welfare benefits advice service...)

Scene: an advice centre, place unspecified...

"Hello, don't know if you can help me?  I need to know what’s going to happen to my money.  I’m on the sick and I don’t know what’s going to happen to my benefits."

There is a brief interlude while the adviser reads the paperwork that the client has brought along...

"OK, it looks like you're getting Employment and Support Allowance (ESA) and Disability Living Allowance (DLA) and you get Housing Benefit for your rent plus some help with Council Tax."

"That sounds right – will they take any of these away?  I’m a bit confused by all this talk of changes, and now I'm having to pay Council Tax..."

"Yes, that's right, Council Tax Benefit has been abolished and replaced with schemes run by local councils.  It depends on where you live, but here you do need to make a contribution.  Income-Related ESA, Income Support, Income-Based Jobseeker’s Allowance, Housing Benefit and Tax Credits - they're all going to be abolished and replaced by Universal Credit."

"So why haven't my benefits changed - should I have done something?"

"Well, I was going to say, Universal Credit is only being brought in for a limited number of claimants in a limited number of areas - no changes here for the moment.  We're not exactly sure when further changes will happen for different areas of the country."

"Right, OK, so am I getting what I should be?"  

"We’d best go through your own claim, benefit by benefit."

"I'd appreciate that..."

"Your ESA is paid because you’re ill and can't work. It’s not based on your contributions, you have no other income, so it’s called Income-Related ESA; it’s a ‘means tested’ benefit.  ESA and JSA have national insurance contributions-based versions which are not being abolished at all."

"Wait a bit, you're confusing me.  Which have I got - and are they going to take it away?"

"You've got the Income-Related one, so it's going to change eventually, but not for the moment.  You're in the Work-Related Activity Group.  It may be, I dunno, a year or more before your claim is changed to Universal Credit – or as late as 2017."

"So if I've already claimed before Universal Credit comes in, I stay on the old benefits, under the old rules, for longer?"

"Exactly.  It’s only if you make a brand new claim for benefits after Universal Credit comes in that you’ll be under the new system."

"So I stay on my benefits, but my friend, she's too ill to work.  If she makes a new claim later on she’ll be on the new system and on a different benefit?"

"Yes. People in exactly the same circumstances will be on different systems."

"What about paying the rent?"

"Housing Benefit stays until Universal Credit comes in. Then your renting costs become part of Universal Credit – the rules for getting help will be pretty much the same, but you’ll have to pay your landlord yourself, it won’t be paid direct to them.  Oh, and Universal Credit is paid monthly, in arrears, unlike benefits now."

"That’s OK for me I hope – but my neighbour already has trouble managing money.  She’ll need help!  Will this Universal Credit be less than what I get now?"

"The amount of Universal Credit is generally the same as the current system – it merges several benefits together but it doesn’t change much about how they work.  Some people with disabilities will get less though."

"Doesn't sound good…"

"But if you’re already on a benefit and Universal Credit would be less, you keep your current level of payment – so that no-one loses out right away.  But you can lose that protection if your situation changes, say you starting living with someone else...  Then you might have to claim Universal Credit jointly, and you wouldn't be able to go back to your old benefits."

"Well, can't see any of that applying to me. But I’ve heard they’ll force me to work on this Universal Credit…"

"The DWP wants to make going to work easier, so if you do some work you can keep more of your income before it starts affecting your benefits.  As your income goes up, the amount of Universal Credit you get paid goes down until it stops altogether.  It could be helpful to people; they’ll have a clearer idea of whether it’s worth working or not."

"And what about me not being able to work?"

"Well, given that you're in the Work-Related Activity Group for your ESA, you need to go to regular interviews with an adviser.  If you don't - and don't have a good reason - your benefits can be cut.  Make sure you let us know if you do start working, and we'll do our best to explain what's likely to happen."

"Thanks, that's what I thought...  Now what about my DLA? I’ve heard it will change to this PIP thing..."

"Yes – DLA is changing to Personal Independence Payment, but again it will only be for new claims from June 10 2013. If you’re already on DLA you’ll carry on getting it for a while, until... maybe 2016.  But what's really important to know is that you won’t be transferred to PIP automatically...  At some point after October this year, you’ll get a letter asking you to make a claim for it: you need to reply to that letter or get advice.  If you don’t your DLA will stop being paid after four weeks, and you’ll lose it altogether after another four weeks."

"So there’s two systems running with this too – depending on when you claim?"

"Well…yes."

"Clear as mud.  How complicated can you make it?  I thought it was meant to make things easier to understand..."

"Ummmm………."

"Sounds like you're going to be busy.  I'll tell my friend to come in and talk it through with you."

"OK, but remember, we can only see her on Tuesday mornings, we've had to cut back some of our services..."

It’s win-win for everyone (maybe even the bailiff)

(Back in September 2011, we asked readers of this blog to give us their examples of waste or failure - and how to tackle it by early action and/or collaboration. So we're very happy to welcome our first guest blogger, Tamra from Bristol Debt Advice Centre (BDAC), where she currently works as a Money Advice Caseworker). Here's what she told us).

As a debt adviser, there are certain situations where you feel that everyone is following a script. Here’s one that I often encountered at BDAC when I started working there. Client comes into the office, worried sick about a council debt that has been passed to the bailiffs to collect. I have to phone the bailiff on his mobile out on his rounds. You can imagine how the conversation went…

Advisor (me) - “Mrs Band is in receipt of Income Support, and can only afford to offer you £3.50 per week”

Bailiff - “Oh no, I can’t accept that. I need at least £100 up front, and then £50 per month after that.”

Advisor (me) - “But Mrs Band can’t afford to pay that, and she is suffering from depression and anxiety, and this is all making it worse.”

Bailiff - “Well, I really can’t do anything about that. She will have to pay me my money, or I’ll be going in to take her goods”

If we tried negotiating with the council we were told that “once it’s with the bailiffs, there’s nothing that we can do, sorry”. In short, refusal to intervene. I would then try to reassure my client that the bailiff wasn’t genuinely interested in removing her second-hand furniture and microwave – he was using the threat of removing them to apply pressure, so that she would go and borrow money from her granny to pay them off. A poor result all round (except maybe for the bailiff).

Regular re-runs of this script, along with all the complaints we got from our clients about bailiff behaviour, led us to undertake some social policy work to improve the cumbersome, slow, and unsuccessful process for dealing with council debt.

If you are struggling to get your council to talk, you may need to present them with hard and fast figures alongside the anecdotal evidence that agencies are used to collecting. In Bristol, we carried out a survey of local residents who had been visited by bailiffs acting on behalf of the council. Once presented with these results, the council starting thinking seriously about the problems that residents encountered.

Increasingly, both advice agencies and local authorities are beginning to understand the benefits of quicker processing of payment arrangements and conflict resolution. This means there needs to be a move towards increased use of telephone and e-mail rather than paper letters which are both time-consuming to produce and expensive to send. If you don’t already have a direct telephone line to the council, try and get this set up – good communication channels are vital.

When you have been through the script so many times, it can be easy to rant and rave. Advice agencies also have a responsibility to make a constructive approach to their council – for the sake of their clients – and improve the relationships between advice agency, local authority and bailiff. Councils are looking at ways to save money, and it is up to advice agencies to demonstrate how more joined-up relationships and a holistic approach to people’s problems can save money and recover debt, whilst at the same time helping local people to sort out financial problems and stop them happening again.

Even bailiff companies may be more likely to win contracts with local councils if it can be shown they are working collaboratively with advice agencies...

Last month I was invited up to Newcastle by the local Citizens Advice Bureau to facilitate a meeting of advisers, council officers and bailiffs. The CAB had carried out a bailiff survey after hearing me talk at the Institute of Money Advisers conference, and the meeting was the first time that most of people involved had met face-to-face. It was a good opportunity to build trust and have constructive discussions on how to do things better, and I was delighted to see that everyone participated with an open and constructive attitude. They now report that the new direct telephone line is working exceptionally well.

If you are looking to back up your arguments for the benefits of a more joined up approach, you should direct your local authority to the research carried out by Community Finance Solutions at University of Salford on behalf of Leeds City Council, Economic Impact and Regeneration in City Economies. One noteworthy statistic is that “for every £1 invested in financial capability, affordable credit and an integrated service between local authorities and advice agencies, a total of £8.40 is generated for the local region”.

Perhaps the most surprising element to the work we undertook in Bristol is the shared goals identified by what have traditionally been seen as opposing sides. By making the case for collaboration, we have been able to help increased numbers of clients and provide them with a quicker, less stressful experience when dealing with their council debts.