Changes to benefits, including the introduction of Universal Credit (UC), have the potential to bring about far reaching changes to recoverable benefits. Will the wind of change in the benefits arena result in a significant rise in recoverable benefits and consequently a defendant’s total outlay?

Overview

Since 2008, the Department for Work and Pensions (DWP) has set about reforming many major benefits. Universal Credit was rolled out in the North-West in April 2013, will be extended nationally from October 2013 and the transition completed by 2017.

The reforms are targeted at those temporarily unfit for work. Claimants will receive benefits for a shorter time, with the intention that they will return to work sooner. In one case we handled, the DWP even declared a claimant fit for work before the claimant GP’s signed him off as fit to return to work.

Conversely, those permanently unfit for work will receive their benefits indefinitely and with fewer checks, so freeing up time and money.

The DWP is also providing more money to focus on the barriers to employment, helping to provide treatment and retraining to get claimants back to work. The DWP will get tougher with employers to ensure that they implement adjustments to a claimant’s workplace and job role to facilitate a return to work, where possible. For example, where a claimant has a troublesome back injury, an employer will more than ever before be expected to adjust desks, remove some more physical parts of a job or provide greater assistance.

Benefit reforms

Here are the key changes in short:

Universal Credit replaces:

  • Income-based Jobseeker’s Allowance (JSAI)
  • Income-based Employment and Support Allowance (ESA)
  • Income Support on income grounds (IS)
  • Child Tax Credits (CTC) *
  • Working Tax Credits (WTC) *
  • Housing Benefit (HB) *

    * previously not recoverable benefits

Employment and Support Allowance (ESA) replaces:

  • Incapacity Benefit (IB) and Income Support on incapacity grounds (IS)

Personal Independence Payment (PIP) replaces:

  • Disability Living Allowance (DLA) (care and mobility elements)

As the above shows, UC combines many previously individual benefits into one single payment to the claimant. Housing Benefit is the most significant of these, as the amounts can be large. Three of the six benefits constituting UC have never previously been recovered by the CRU from defendants.

Implications

  • Defendants are therefore likely to see an increase in the amount of benefits they have to repay, as the amount of benefits recovered now includes elements which were not previously recovered, such as Housing Benefit.
  • The good news for defendants is that in some cases they may not see an increase in their total outlay on a claim if they are able to offset the Universal Credit fully against the loss of earnings paid to the claimant. This won’t however always be the case.
  • The DWP records promise more than ever to provide valuable ammunition for reducing claims and also challenging a CRU certificate on review and appeal. For example, capacity for work assessments may provide crucial evidence to combat loss of earnings and care claims.
  • It is to be hoped that the DWP’s reforms may mean that claimants will return to work more quickly and so claims such as loss of earnings may consequently reduce.

View sCRUtiny: Essential Guide to CRU Benefits and Appeals.