I am grateful to everyone who has emailed recently about Universal Credit (UC) and note the concerns which have been raised.
UC is the biggest and most fundamental reform to the welfare state since its creation. It is a modern benefit based on the sound principles that work should always pay and those who need support receive it. It is also fair to taxpayers.
In 2010, the welfare bill cost each household £8,350. This was an increase of nearly £3,000 per household since 1997. Not only was this system failing to reward work, but it was the taxpayer bearing the burden.
I firmly believe that UC is a fair benefit that protects vulnerable claimants and ensures that work always pays. As UC is a simpler, more accurate benefit based on up-to-date information, it will provide people with their full entitlement. This means that 700,000 people will receive on average an extra £285 per month which they have not received under the existing system. Around a million disabled claimants will gain on average £100 a month through UC, because their award is higher through UC than legacy benefits.
UC will help 200,000 more people into work when fully rolled out, and empower people to work an extra 113 million hours a year. You might be interested to know that people on UC spend around 50 per cent more time looking for a job than they did under Jobseeker's Allowance. Since 2010, we have seen over 3.3 million people move into work, which is on average 1,000 people each and every day. And youth unemployment has fallen by almost 50 per cent.
In this year's Budget, the Chancellor announced a £4.5 billion package for UC, which will make a real difference to the lives of claimants across the country. An extra £1.7 billion a year will be put into work allowances, increasing the amount that hardworking families can earn by £1,000 before their award is tapered away, providing extra support for 2.4 million working families.
This is on top of a £1 billion package of changes, providing two additional weeks of legacy benefits for those moved onto UC, a twelve-month grace period before the Minimum Income Floor is applied, and a reduction of the normal maximum rate at which debts are deducted from UC awards, from 40 per cent to 30 per cent of Standard Allowances.
The wider process of moving people from legacy benefits onto UC will begin next year, following the passage of regulations in Parliament. These regulations will provide a comprehensive wrap-around support package, and transitional protection to ensure people are not worse off. This includes support for around 500,000 people who are eligible for a Severe Disability Premium.
There will be flexibility to extend the transition period for people alongside a process to ensure that staff check for evidence of complex needs or vulnerability or disability before existing benefits are stopped. Furthermore, if someone misses their deadline to make a claim, there are provisions in the regulations for the Department for Work and Pensions (DWP) to back-date their claim.
For people with capital exceeding £16,000 who are moved onto UC, any capital which exceeds the limit will be disregarded for twelve months. This will affect around 50,000 people. It has been calculated that approximately 50 per cent have capital greater than £40,000.
Throughout managed migration, the DWP will continue to take a slow and measured approach. This will begin in July 2019, after a period of preparation. For a further year the DWP will then begin migration by working with a maximum of 10,000 people, continuing with their 'test and learn' approach. This is to ensure the system is working well for claimants and to make any necessary adaptions they we go, until the full rollout ends in 2023.
Rightly for a programme of this scale, the priority continues to be its safe and secure delivery. The controlled expansion of UC started in April 2013 and I am pleased that significant progress has been made to date. By the end of this year, UC will be rolled out to every Jobcentre in the country. This means that people who are making new claims to the benefits system now receive UC rather than being put on the legacy system.