Official Report: Minutes of Evidence

The Chairperson (Mr Gildernew): I welcome Kevin Higgins, head of policy and information in Advice NI; and Matt Cole, information officer with Advice NI. Kevin, I invite you to make a brief opening statement before we move to questions from members. I remind members that we are running slightly over time, so let us keep this as tight as possible. We really appreciate your attendance, Kevin. Your expertise in this area is of great benefit to the Committee, so thank you.

Mr Kevin Higgins (Advice NI): Thank you very much. I appreciate the opportunity to present, and I will get straight into it. The aim of Advice NI is to ensure that the removal of the two-child limit and the resultant impact on the benefit cap and our attendant benefit cap mitigations are fully understood, so that our poorest families with children can continue to have certainty regarding their household finances and the lifeline that the benefit cap mitigation provides for them.

We also want to flag some other issues, namely the impact of this change for those families who have recently migrated from legacy benefits to universal credit (UC), particularly where transitional protection is in place. As part of our opening remarks, Matt will cover more information on that. We want to flag the need to raise awareness of the removal of the two-child limit and encourage universal credit uptake, where the change brings entitlement for the first time, and the importance of that issue in relation to children living in poverty.

The Assembly should be proud of the welfare mitigations scheme and the work of Professor Evason. I am mindful of the recent anniversary of her passing in January 2023. She would be delighted that the child limit has finally been removed. The UK Government estimate that the removal will mean that around 450,000 fewer children are in homes of relative low income by 2030.

In this part of the world, we have the double bounce, because, whilst we know that there will be a knock-on impact from the increase in numbers affected by the benefit cap — by the way, all the families impacted on by the benefit cap are families with children — that is mitigated by the Evason mitigation scheme. To be clear with members on why that is, simply put, when you go through the whole universal credit calculation, the two-child limit is applied first. If you take a case today, the two-child limit is applied, and it reduces the universal credit amount that is then subject to the benefit cap. Fast-forward to April, the two-child limit will be removed, so there will be more income included in the universal credit amount that is subject to the benefit cap. That is the rationale behind all that.

So we need to be fully aware of the impact of this for the sake of our benefit cap mitigation scheme.

Come April, families will be in the brilliant position whereby children are not affected by the two-child limit and the benefit cap. That is huge. Families will have more money to feed and clothe their children, heat their home and keep a roof over their heads. We have to get the planning right to ensure that those families can rely on that support. I was here earlier, and I heard the Minister say that the discretionary support scheme could be decimated by the Budget allocations. I know that they are draft allocations and are subject to change. I heard some members say that they were panicked by that. I was panicked by it as well. We know that DFC has a flatline budget. This is an additional pressure of about £9 million on that budget. If you have a flatline budget, where will that money come from? Even if there is a special line or allocation for that support in the budget, the fact that there is a flatline budget causes concerns.

I will hand over now to Matt, who will talk a little bit more about the technical issues.

Mr Matt Cole (Advice NI): Good afternoon, members. Thank you for having us. I will talk about an aspect of the removal of the two-child limit that will have an impact on people who have recently migrated to universal credit from the legacy benefits. That includes tax credits, income support, jobseeker's allowance, employment and support allowance (ESA) and housing benefit. Those people are considered for entitlement to something called a "transitional element", as I am sure most members are aware, that protects them to ensure that they receive a level of universal credit that is commensurate with their previous entitlement to legacy benefits.

One of the provisions in the Universal Credit (Transitional Provisions) Regulations (Northern Ireland) 2016 is that the amount of money that a person receives through their transitional element is eroded by the increase that occurs in any other aspect of their entitlement, with the sole exception of the childcare costs element. Any increase to the child element that comes with the removal of the two-child limit will be subtracted from whatever entitlement to transitional protection that person has. Therefore, people who have recently migrated will be impacted on, as will those who are affected by the benefit cap. There is no provision in the Bill as proposed to amend the transitional provisions regulations. What that means is that, effectively, those people will fall foul of that and lose some of the increase that comes through the removal of the two-child limit. It is an additional area, aside from the benefit cap, that could be impacted on.

The Bill has not even had its Second Reading in the Commons yet, so there has been no debate, and we are not aware of any discussion about this in Great Britain, so we felt that it was essential that we highlight it. We do not feel that it should stand in the way of legislative consent being given by the Assembly. However, it is important that it be referred back to Westminster to establish whether there is any intent to consider that or whether it has been considered. Decisions can then be made about whether it should be mitigated at all. It just shows that the interaction of changes such as this with the existing regulations can produce their own specificities, and that is what we want to highlight.

The Chairperson (Mr Gildernew): Thank you. I fully agree with your comments on the work of Eileen Evason and the removal of what was a very pernicious scheme. I recognise that a lot of people in this room worked very hard to get rid of it, and it is good and important to see that.

Before I go to Sian, I want to pick up on the need to encourage universal credit uptake. What are your concerns about that? What is your advice to us, to the Department or to pass on to the Department, about what it should be doing on that? Is the Department engaging with you or providing you with any additional resources to deal with the fallout from all this?

Mr Higgins: We have very positive engagement with the Department, up to a very senior level, on the operation of universal credit. We have regular meetings, and, outside those meetings, we have ad hoc meetings as well. Our level of engagement with departmental officials is very good, which we welcome. I have no problem saying that.

The advice sector generally — our front-line services and our helpline — has been under substantial pressure. At the moment, it is all around the move to UC. The big push, as you will know, is ESA and getting those claimants migrated onto universal credit, which has to be done by 31 March. That is a huge piece of work. It has been a huge piece of work from tax credits right through, but members will be aware that these are particularly vulnerable people, and our big focus — to be fair, the big focus of the operational side of the Department — is on ensuring that everybody is safely, effectively and securely moved across to their universal credit. That is our big focus at the moment. We have an eye, of course, on the two-child limit, hence we did our briefing paper and have engaged with the Department of Finance, the Department for Communities, the Ministers and the Committees on that.

The two big issues are around the mitigations and the transitional protection. It is just to be crystal clear on the impact of the mitigations and to repeat what will happen if we have a flatline budget. The mitigations were agreed by the Executive. It is a fantastically good news story that has such a positive impact on child poverty, but we need to be really clear that it is protected for now, and protected beyond 2028 as well.

Ms Mulholland: Thank you so much, both of you. Kevin, what you do not know about universal credit is not worth knowing, so I want to say a personal thank-you for being my go-to when I have silly questions about these things.

I had not clocked the transitional element. Do we have any idea of how many of our UC claimants that is impacting on?

Mr Cole: How many are in receipt of the transitional element?

Ms Mulholland: Yes. How many are in receipt of the transitional element and will then be eligible for an extra child element?

Mr Cole: That level of information is not really published in the official statistics. They do not go into that granularity about entitlement to the transitional element. The best that we could say is that an average amount of transitional element is paid to the whole cohort of claimants, but there is no way to establish how many of those have children or how many children are in the household. The Department, in principle, could answer that, but the difficulty is that the transitional element is quite individualised. It depends on the specific circumstances of the claimant, so it is quite hard to predict in advance what a general or average impact would be in that situation.

Ms Mulholland: It might be useful even for those who are in receipt. I do not know whether the Department can tell us exactly how much or an average, but it might be able to tell us how many claimants are in receipt of the transitional, but also in receipt of any child element, and then we just assume that there should be some communication with them. That is something that we can take away.

Mr Cole: It is certainly information that the Department ought to be able to identify that would give us some enlightenment about that.

Ms Mulholland: As you said, it is those interactions that make this so unique. The figures have caused me some consternation, Kevin, because we do not seem to have the finite very clear. The Department provided the Committee with figures suggesting that 650 households are affected by the benefit cap, and that rises to approximately 1,660 following its removal. That is the £40 million over the four years, but then the Department's published data is more complex. The welfare supplementary payments annual report records 2,500 benefit cap mitigation payments in the most recent year, while Northern Ireland Statistics and Research Agency statistics published last August show 1,200. I do not feel at this moment in time that we have a really clear picture. Do you share my concerns about the figures?

Mr Higgins: That is the factual position. There have been Assembly questions asked about that, and they seem to equate to the £9 million plus the £3 million, so a total of £12 million. Then, when you get down to the number of households that are impacted on, it can range from anywhere between 600 and, in the published report, 2,500. Like everything to do with social security, it can be more complex than you initially think. Some families will move on to benefits and some will come off. Some will be on universal credit for the entirety of that annual period, and some will not, so there is a lot of flux there, and I can understand that. Ultimately, the annual report says 2,500 or whatever, so we have to go with that. That is where we want to be clear and we want to be very cautious. We worked so hard to get a mitigation scheme that protects families and children, so we want to ensure that nothing hits us late in the day and undermines the great work that has been done through the Assembly passing that legislation for the mitigations, and that those families can rely on that money.

The Chairperson (Mr Gildernew): Thank you, Kevin and Matt. It has been really useful, and thank you for briefing the Committee today.