Universal credit

Universal credit is a means-tested benefit payment, that replaces six ‘legacy’ benefits with a single monthly payment. These benefits are: child tax credit; housing benefit; income support; income-based Jobseeker’s allowance; income-related employment and support allowance; and working tax credit. It was first introduced in 2013 and is intended to “simplify and streamline the benefits system, improve incentives for work, tackle poverty, and reduce fraud and error”.

It is now the only option for working age individuals and families applying for a means-tested benefit. However, it still being rolled out to apply to all existing benefit claimants. The Government had hoped this work would be completed by September 2024. However, there are now concerns this may be delayed.

Due to the coronavirus crisis, the Government announced a £20 a week increase in universal credit payment in March 2020. This was due to end April 2021 but the Chancellor Rishi Sunak recently extended it until October 2021. The Institute for Fiscal Studies has expressed concern about there being a sudden reduction in payments at some point, arguing that it should be reduced back to the usual level gradually. Others, such as the Joseph Rowntree Foundation, have argued for the increase to be made permanent, particularly due to the anticipated economic difficulties over the coming years.

The leader of the Labour Party, Keir Starmer, has stated that universal credit should be scrapped entirely and replaced with a new social security system. Responding to the decision to extend the uplift to universal credit, Keir Starmer argued that this just deferred the problem and that the insecurity of families losing £1,000 a year remained. He again called for a “new, fairer system”.

National strategy for disabled people

In its manifesto and in the background notes published alongside the December 2019 Queen’s Speech, the Government outlined its intention to publish a national disability strategy. The background notes set out the goal of the strategy:

We want to transform the lives of disabled people, ensuring they have access to opportunities and are able to achieve their potential. We will publish a national strategy for disabled people in 2020 to ensure disabled people can lead a life of opportunity and fulfilment. Our strategy will be ambitious, supporting disabled people in all aspects and phases of their life.

The strategy will set out practical proposals on the issues that matter most to disabled people and we will use all the levers of Government to support disabled people to achieve their potential.

However, the strategy has been delayed due to the coronavirus pandemic, with the Government explaining in April 2020 that it wanted to ensure it had “enough time to get this right and undertake a full and appropriate programme of stakeholder engagement”. It now hopes the strategy will be published in spring 2021. The Government has recently run a survey to gather views on the strategy, which closed on 23 April 2021.

Review of terminal illness benefit rules

If someone is living with a terminal illness, their claim for certain benefits can be fast-tracked and paid at the highest rate. This is sometimes referred to as applying under the ‘special rules’. However, in England, Wales and Northern Ireland, a person must provide evidence that their death could be ‘reasonably expected’ within the next six months to qualify under the special rules. The House of Commons Work and Pensions Committee has reported concerns from medical professionals and charities about the ‘special rules’.

The Government announced in 2019 that it would be reviewing these rules. The then Secretary of State for Work and Pensions, Amber Rudd, committed to “a fresh and honest evaluation of our benefits system so that I can be sure that people who are nearing the end of their life are getting the best possible support”. The Government has said that it has been working with many organisations to review the policy, including NHS England and charities such as Hospice UK and Macmillan Cancer Support.

On 23 March 2021, the Minister for Disabled People, Justin Tomlinson, gave an update in answer to a written question:

The department is committed to delivering an improved benefit system for claimants that are nearing the end of their lives and is working across government to bring forward proposals following the evaluation. I remain committed to implementing the key areas identified in the evaluation; a consensus to change the six-month rule; improving ​consistency with other services used by people nearing the end of their lives; and raising awareness of the support that is available.

The changes are expected to require primary legislation.

The Labour MP for Newport East, Jessica Morden, has called for the Government to take urgent action on two elements of the special rules she considered “not fit for purpose”. These are:

The six-month rule, which means that someone is obliged to provide medical proof that they have six months or less to live so that they can access benefits quickly, more sensitively and at a higher rate; and the three-year award, which forces terminally ill people to reapply for benefits in the minority of cases where they are lucky enough to live longer than three years after the benefit is awarded.

She has also introduced a private member’s bill on the subject.


Legislation and next steps following the passing of the Pension Schemes Act 2021

The Pension Schemes Act 2021 received royal assent on 11 February 2021. The act will bring in new criminal offences to protect pension schemes, new legislative frameworks to improve the operation of schemes, strengthened rules for pension transfers, and measures to support trustees and employers improve the way they plan and manage scheme funding over the longer term.

In a written statement on 2 March 2021, the Minister for Pensions and Financial Inclusion, Guy Opperman, set out the next steps the Government would be taking to achieve the aims of the legislation. This includes new secondary legislation and consultations, including:

  • Regulations laid in the summer aimed at making the UK’s pension system “safer, better and greener”.
  • Consultations on the Pension Regulator’s powers, with regulations laid on this, and on the new criminal offences, in autumn.
  • Consultations on draft regulations for scams and collective defined contribution schemes this summer, with commencement on the scams measures from early autumn 2021. Also, there would be consultations on defined benefit scheme funding later this year, followed by draft regulations.
  • Plans to consult on proposed regulations for the pensions dashboard later this year and to lay draft regulations before Parliament in 2022.

Other pensions proposals

In its 2019 manifesto, the Conservative Party pledged a comprehensive review of a “loophole” that causes workers, disproportionately women, who earn between £10,000 and £12,500 to miss out on pension benefits if they are in net pay pension schemes. The Government published a call for evidence to look at how to resolve this issue in July 2020. It has recently stated that it is analysing the responses of the consultation and will respond in due course.

The Government has also announced that it is publishing legislation to resolve an issue with public service pensions, which arose from scheme changes made in 2015. The 2015 changes were successfully challenged in the courts for being age discriminatory. The Government launched a consultation in July 2020 on how to resolve the issues. The legislation would enact the results of that consultation.

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Cover image from pxhere.