Universal Credit (UC) is the main benefit available to working claimants. Workers claiming UCare a key group struggling with the cost-of-living crisis. Raising the incomes of workers on UC is an obvious policy response.
To increase net incomes, the government has recently reduced the taper rate on earnings above benefit thresholds, so that claimants keep more of the money they earn. Now attention is turning towards encouraging working claimants to increase their earnings - through so-called in-work progression - by working extra hours or taking an extra job.
Universal Credit and In-Work Progression
The Department for Work and Pensions (DWP) piloted their first In-Work Progression scheme from 2015-2018, aiming to provide targeted support to claimants in low-paid work to increase their earnings.
Manchester Metropolitan University described this approach as “work first, and then work more”.
Citizens Advice Scotland recommended that support should help claimants find jobs better suited to them rather than “setting targets without regard to suitability or quality”.
In 2022, the government announced a £99m extension to the In-Work Progression initiative, which they say will allow more claimants in work to access “individualised work coach support to help them progress and increase their earnings”.
However, in DWP’s Advice for Decision Makers (ADM) guide, work coaches are simply directed to apply the guidance from the previous pilot.
More recently, the Secretary of State for Work and Pensions, Therese Coffey, confirmed that the threshold under which a claimant will usually be expected to seek further work may soon be increased from nine hours per week to 12, with further increases under consideration.
The ADM guide for the pilot states that those on the scheme could be subject to work-related requirements regardless of whether their earnings or hours had reached the usual threshold.
Claimants on this scheme could be asked to attend work-focused interviews, or search for or take on further opportunities, risking sanctions if they do not comply.
The DWP recently recommenced the rollout of Managed Migration, moving a cohort of benefit claimants from the old (“legacy”) system to UC. Case studies supporting this move showed the impact of increased earnings on UC, and how it provides better support as claimants progress in work. Critically, however, the case studies showed claimants increasing their hours rather than their hourly rate.
In-Work Progression and part-time training
Under the In-Work Progression initiative, low-paid claimants may be expected to look for further opportunities to progress in work. This generally means earning more, primarily by working more hours, rather than training to qualify for better opportunities.
Finding training opportunities for the claimant, however, is a definitive part of the work coach’s role according to Regulation 93(d) of the UC Regulations. On the other hand, if a claimant is “undertaking a course of study or training that is not compatible with any work-related requirement” they will be treated as “receiving education”, which would disqualify them from receiving UC.
Benefit entitlement in these circumstances is discretionary. The work coach can choose to allow claimants to undertake training, but claimants need to show they are able to undertake the course as well as meet their work commitments. If claimants are subject to work-related requirements while working 12 or more hours per week, this may be harder to prove. To date, however, there is no publicly available guidance on how work coaches will be asked to treat part-time training under the In-Work Progression scheme.
Policy action
Working claimants need to feel certain that their efforts to train and retrain to pursue better quality jobs will not result in a significant loss of benefit income, especially given the rising cost of living.
The DWP should publish clear guidance on what working claimants can do in terms of part-time training while receiving Universal Credit rather than relying on work coach discretion.
In addition, DWP should enable claimants to undertake relevant part-time training and retraining for a defined period – say 13 weeks - as an alternative to working longer hours as part of the in-work progression initiative.
Sophia Warren is a Senior Policy and Data Analyst at Policy in Practice