Dr Rita Griffiths is a Research Fellow in the Institute for Policy Research (IPR) at the University of Bath. She is co-author of the recently published report, Uncharted Territory: Universal Credit, Couples and Money.
Between March and June 2020, an unprecedented 3.3 million people made a ‘declaration’ for Universal Credit – meaning that they submitted an application for the benefit. Tributes have rightly been paid to Department for Work and Pensions (DWP) staff – thousands of whom were redeployed from the furthest reaches of the Department to help process the deluge of new claims as the COVID-19 pandemic took hold.
Neil Couling – Senior Responsible Officer for Universal Credit – declared “the system has run beautifully … I'm pretty bullish on this, I think we're in a very good place." But as notifications of the amounts would-be claimants are due to receive have begun to hit their inboxes, up to a third have received the worrying news that their application has either been rejected, withdrawn or zero-rated. Some rejections relate to speculative applications, later withdrawn, due to the applicant’s eligibility for the government’s job retention scheme or the self-employment income support scheme. But one important reason why some claims fail is the joint means test. Most people probably realise that entitlement for means-tested benefits is dependent on income and earnings, but are not necessarily aware of what this means for couples. This is one of the issues that we have been exploring in our recently published research, which focuses specifically on couples claiming Universal Credit jointly.
Under the Universal Credit rules couples who live together have no right to individual treatment but are obliged to claim jointly, and are treated as a ‘benefit unit’, in which their needs, income and earnings are aggregated. This applies regardless of how long they have been living together, the nature of the relationship, or how they organise their finances.
So, if you find yourself unemployed, or have lost a large chunk of your earnings or income, but your partner is still working, or being supported by the government’s furlough or self-employed scheme, or you have combined savings of 16K or more, you may only be eligible for a contributory benefit based on your national insurance record. But if you know nothing about this benefit – and the recent bypassing of (new style) Jobseekers Allowance means that many people do not, or if you are not entitled to claim - and many low-paid and self-employed workers are not - you will be obliged to turn to your partner for financial support.
The indignity and risk of enforced financial dependency on a partner was one of the key issues highlighted in our research. A similar issue was reported in a recent survey of applicants commissioned by the House of Commons Work and Pensions Committee exploring how the DWP is responding to the Coronavirus pandemic. And as Fran Bennett and others argue, a joint claim is an even riskier undertaking for those thinking of entering into the committed coupledom that the government is purportedly so keen to encourage.
Among couples whose combined savings and income are low enough to entitle them to Universal Credit, there is another sting in the tail. Many will be shocked to discover how little they get, as acknowledged by the DWP itself: people "may be surprised that it is not as much as they were expecting". We certainly found this to be the case in our research. For those who had not claimed benefits before, the shockingly low amount of money the couple were expected to live on came as a nasty surprise.
With the temporary weekly uprating of £20 , the standard Universal Credit allowance for couples aged 25 and over is £594.04 per month, while for two single claimants it would be £819.78 (£409.89 per single claimant or lone parent) – a difference of around £225 each month. That joint claimants are entitled to a lower rate of benefit than double the amount two single claimants get is a feature of the wider means-tested benefit system and is intended to reflect the economies of scale that are assumed to occur when couples share the same household. But this only applies to couples, not housemates or other adult family members. They might also be expected to benefit from economies of scale, so the policy rationale is not consistent.
Many couples in our study also reported that there was a large gap between their Universal Credit entitlement and the amount they were actually paid. Deductions were a key reason why. These automated repayments for loans and benefit and tax credit overpayments and council tax arrears, for example, sometimes reduced the payment by 30 or 40 per cent. Seen as particularly frustrating and iniquitous were deductions from the couple’s joint claim for ’inherited’ debts relating to a period from before the couple had even met, when one or both partners had been in a previous relationship. Sometimes the debts and overpayments dated back as far as the 1990s. The fact that a spouse or partner was paying off the debts of his or her partner’s ex created resentment and could put strain on the couple’s relationship.
Under the legacy system, different benefits could enable each member of the couple to have a source of income but under Universal Credit there is only one payment made into one bank account. In couples with children, Child Benefit was often the only reliable source of income available to the female partner. But if there were no children in the household, one partner was sometimes forced to go ‘cap in hand’ to the other to ask for a share of the money. One woman we interviewed said it was “like having to ask your mam or dad for money” but it was demeaning for men as well as women.
As warned by women’s groups during the early period of Universal Credit’s design, the single payment could also allow one partner to take control of the household’s entire monthly income. Because most of the couples we interviewed were in committed relationships and the partners trusted each other, this did not typically happen. However, one in three women interviewed said they had experienced controlling behaviour or financial abuse in a previous relationship. Women who had re-partnered with a man who was not their children’s biological father were especially keen to ensure the payment was not made to him. But regardless of whether they themselves had any particular issues with accessing the money, many couples simply felt that a single payment symbolised financial dependence. Ensuring that each partner had some source of personal income was felt to be a safer and fairer alternative.
More broadly, many couples felt that the benefit system did not reflect contemporary relationships or how modern families live their lives. Both partners now expect and want to go out to work, manage their own money and contribute to the household finances. The single payment seemed to them to hark back to a bygone era of male breadwinners. It is 30 years since independent taxation was introduced for married women, but the last time an official review of the treatment of couples in social security was conducted was in 1998. Independent treatment of men and women in means-tested benefits has always been resisted on the grounds that it is unaffordable, while contributory benefits have been seen to disadvantage women. With previously unthinkable levels of taxpayers’ money being spent on financial support for the working age population, and female employment at an historic high, if now is not the time for a fundamental rethink, then when is?
All articles posted on this blog give the views of the author(s), and not the position of the IPR, nor of the University of Bath.