Lords Committee notes tighter duties on in-work claimants of Universal Credit
Friday 14 October 2022
The House of Lords Secondary Legislation Scrutiny Committee’s 13th report of Session 2022-23 comments on changes made by The Universal Credit (Administrative Earnings Threshold) (Amendment) Regulations 2022 (SI 2022/886) and the initial lack of detail provided to explain the changes made.
Universal Credit is not only paid to the unemployed but also those on low earnings. Claimants earning above a certain amount, the Administrative Earnings Threshold (AET), are not required to search for further work and are referred to as “Light Touch claimants”. This instrument changed the AET by raising the threshold from £355 to £494 per calendar month (pcm) for an individual and from £567 to £782 pcm for a couple. The changes came into effect on 26 September 2022.
The effect of this increase in the AET will be to bring 114,000 more claimants (16.5% of Light Touch claimants) into the Intensive Work Search regime. This means these claimants are now required to have regular contact with a work coach and commit to certain work search requirements.
The Department for Work and Pensions (DWP) state that the changes have been made with the intention of helping those claimants to improve their earnings by, for example, increasing their hours, progressing in their current sector, or switching careers.
The Committee criticised the explanatory material originally supplied by DWP because it assumed everyone understood the system and did not provide sufficient contextual information about what the changes meant in practice. In particular, the AET calculation methodology was obscure. DWP has now provided a fuller Explanatory Memorandum.
Lord German, Member of the Secondary Legislation Scrutiny Committee said;
“The original explanation provided by the Department for Work and Pensions left us very much in the dark about the way the AET was calculated and further information was clearly required.
“In additional material, the DWP explained the rather arcane method originally used in 2015 to set this threshold and also mentioned that the figures used had been rounded up for this instrument. The effect of that rounding up is to draw many more people into the Intensive Work regime than simply updating the original formula would have done: this was a policy change that should have been made clear in the initial Explanatory Memorandum.
“Clear explanatory material that fully explains changes in law so that Parliament, and the people affected, are given a full picture of how and why a policy is changing is essential. DWP failed to do that on this occasion.”
