Universal Credit and couples: Policy issues

Posted in: Evidence and policymaking, Universal Credit, Welfare and social security

Fran Bennett is Senior Research Fellow in the Department of Social Policy and Intervention at the University of Oxford, and Visiting Fellow in the Institute for Policy Research (IPR) at the University of Bath. Neil Couling is Change Director General and Senior Responsible Owner for Universal Credit in the Department for Work and Pensions (DWP). Jane Millar is Professor of Social Policy in the IPR at the University of Bath.

At an IPR webinar on 25 September 2020, we heard from Fran Bennett (Oxford University) about some of the key policy issues that are emerging from the ESRC-funded research project, Couples balancing work, money and care: exploring the shifting landscape under Universal Credit.

Neil Couling from DWP has been the Senior Responsible Officer for Universal Credit since 2013, and he joined us for the discussion. In particular we were interested to explore what reforms are, and are not, possible.

Couples currently make up about 20 per cent of Universal Credit claimants but the numbers and proportion will increase, as more people come into the system and as people are migrated from tax credits. So, it is important to be thinking ahead to what will face these claimants and how potential problems can be avoided.

The research report is available here, and the podcast and video of the webinar is online, with a Q&A session. We were not able to address all the questions posed on the day, so Neil and Fran have kindly agreed to provide their replies to the questions we did not get to, as below.


With growing evidence of child poverty in single earner families, and the need for greater stability for couples in a time of job insecurity if they both have a job, will DWP prioritise incentivising second earners?

Neil - Ultimately this is a question for Ministers but structurally speaking there is no reason why Universal Credit couldn’t be shaped in a way that gave greater recognition to second earners. Back in 2010 our focus was on workless households - described in the webinar as “work rich” and “work poor” households - so we channelled resources there (taper/work allowance) with a particular emphasis on lone parents, given they are the sole earner in those households. But there are bits of Universal Credit that are still under-developed, such as the in-work possibilities, we obviously do look at the second earner position too. The beauty of Universal Credit is that for the first time, without the legacy system overlaps, it is much easier to design policy responses to issues.

Fran – The most common solution suggested is a second work allowance for couples. But it would be interesting to see whether it is structurally possible to (for example) have different taper rates for different groups of earners within the Universal Credit system. Research suggests that ‘second earners’ are one of the groups most responsive to (dis)incentives, so modelling which does not differentiate in this way is of limited utility. However, other issues are also important here, not just financial incentives (the hassle of coordinating work and care, difficulties with childcare assistance etc.), and we should not ignore other solutions outside the UC system either.

As Neil alluded to, there have been a number of legal cases regarding the way the assessment period works for people who are paid more frequently than monthly. We're waiting to hear how the DWP responds to the latest judgments. Can we glean from Neil whether there is any prospect of apportionment of earnings over more than one assessment period?

Neil - I doubt we will move to apportionment, as it’s difficult to explain to claimants (and DWP staff!) and write rules for that which won’t produce another round of litigation. Courts have actually been quite firm on the appropriateness of assessment periods and Parliament’s right to set those and create what lawyers call “bright lines”. I think it is possible to construct a solution to the issue raised in the court without breaking some of the core concepts and core design, which in effect is the judgment the Court of Appeal came to but effectively said “Neil, that’s for you to sort not us”. Which as ever shows the wisdom of our judiciary!

Fran – The idea of picking one arbitrary date in each month for a snapshot assessment of income and circumstances, which then dictates the benefit due to a household, was always a key design flaw in the integration of means-tested benefits for those in and out of work underlying Universal Credit. Sooner or later we will have to unpick this. Unfortunately many will suffer volatility and insecurity of income before that occurs. In addition to the treatment of earnings, which has been a focus of recent legal challenges, the whole month approach to changes of circumstances is a neglected area in the design of Universal Credit.

Hearing what Neil has said about political choices re: policy options and these being a matter for Parliament - what does he think are the opportunities for a policy review given the current pandemic and the opportunity to get the system working better for couples before larger numbers of couples come to rely on it?

Neil - Clearly it is up to Ministers and ultimately Parliament to set out if they want changes. My advice on this is a matter of public record, so I think I can safely repeat it here. I don’t think it is a good time to try to make major changes, the system is under considerable strain and attempting changes increases risks of failure. Instead I have been encouraging commentators and lobbyists to try to work with the grain of what we have. The £20 increase is a case in point (or LHA to 30th percentile of rents). Those changes are easy to effect, I think it took us five days to code and deploy in contrast to building new features or functionality. And in stark contrast to the legacy systems that take 6-12 months to pull even a change like rates through (why we should all love Universal Credit – at least from a system perspective!)

Fran – We realise a lot is going on at the moment. We were suggesting that couples should be a focus of careful consideration by policymakers at this time, not least for the reason cited by the questioner, but also because of our findings about issues they face. The uplift in Universal Credit was welcome of course, and we hope it continues beyond next April. But the comparison here with the legacy system might be different had the emphasis not been solely on investment in Universal Credit over recent years. And in normal times we would hope that changes to benefits are not habitually dictated by progress in automation rather than policy priorities.

At what stage are DWP in adjusting the Universal Credit system to implement the High Court judgement on the flexibility of assessment periods to adapt to earnings?

Neil - We are making good progress and when we are ready to make an announcement we will. I’m sorry I can’t say more today.

Fran – Nothing to add (see above on the general issue here).

Can conditionality be relaxed for the parent who is not the "main carer" in light of their parental responsibilities?

Neil - There’s quite a lot of flexibility in the rules on conditionality for carers and those doing shared care too. The key thing is for the claimant and their partner to make clear to their work coach what those arrangements are. But if this relates to a specific case contact me separately and I will get it looked at.

Fran – Unfortunately reports from various organisations, including our own, have highlighted that flexibility is not always what claimants experience in this area. Instead, claimant commitments are often seen as rigid and unyielding. Leaving aside specific cases, if this is the key issue it seems to be from research action must be taken to better recognise and accommodate the range of modern family patterns of sharing care and employment between partners.

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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.

Posted in: Evidence and policymaking, Universal Credit, Welfare and social security


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