Latest news with #RealTimeInformation
Spectator
4 days ago
- Business
- Spectator
Revealed: the dodgy data undermining Universal Credit
As Sir Keir Starmer offers concessions to 126 rebels to water down his welfare reform bill, a scandal that undermines the entire Universal Credit system goes ignored. The Spectator has seen figures revealing that the HMRC data feed which powers Universal Credit payments to low-paid workers may be so error-strewn that as many as one in four claimants has been underpaid, overpaid or not paid at all. When Universal Credit was introduced 11 years ago to modernise benefits, it required a robust data system to drive it. HMRC's answer was the 'Real Time Information' (RTI) system – hailed at the time as the most significant overhaul of the tax system since PAYE's introduction in 1944. Employers were required to report payroll information every time they paid staff, enabling near real-time benefit calculations. The system was later used to support the Covid furlough scheme. But problems surfaced almost immediately. Financial penalties that were triggered automatically to ensure employers reported earnings records accurately and on time were abandoned after just one use in 2014, almost as soon as the data stream was turned on. A senior official at HMRC said at the time: 'We haven't been able to target them [400,000 automated compliance messages to employers] as sharply as we hoped and they went to people who had complied.' In hindsight, some insiders draw comparisons to the Post Office's Horizon scandal. The implications of flawed RTI data are vast. FTSE 100 companies have seen tax liabilities misstated by millions because what they owe in tax is also calculated using RTI. Businesses have lost faith in the integrity of the figures. This same stream underpins tax assessments for 30 million people and Universal Credit payments for 23 million. Yet the data is routinely late, inaccurate, or missing. The fallout? Missed tax receipts, unpaid benefits – and in the most severe cases, people wrongly accused of fraud. In 2023, I reported that, while the government claimed the RTI error rate was under 1 per cent, figures I obtained showed a monthly error rate closer to 5 per cent. One in 20 Universal Credit claims for working households, it turns out, may be wrongly calculated every month – a figure the government strongly disputes. More recent Freedom of Information requests suggest an error rate as high as 8 per cent, or 2.5 million incorrect records monthly. The benefits bill is unsustainably high and reform is clearly needed These reports in The Spectator led to the shop workers union USDAW including questions about Universal Credit payments in its annual survey to thousands of members. I have now obtained the results. Of those surveyed, some 1,265 said they claimed Universal Credit. Some 23 per cent admitted they had had issues with their UC claims because the details of their households' total pay were wrong at DWP or had an incorrect date shown. That suggests that almost one in four in-work UC claimants have been made a victim of this error that stems from the RTI system. Nearly 29 per cent of those who had experienced an error ended up in financial hardship as a result. Some 22 per cent said they'd experienced issues but not been able to get a satisfactory response from the DWP. The USDAW survey, which is the first of its kind to ask in-work UC claimants if they've experienced errors stemming from RTI, reveals that even the error rate of 4-8 per cent I've previously reported on could be a considerable underestimate. The survey responders are all USDAW members so tend to be people working in lower-paid private-sector roles. It's not possible to say for certain that they are all UC claimants, but their membership suggests these are the type of people likely to be in the in-work claimant population governed by RTI. A common issue raised was the misreporting of pay dates for supermarket workers paid every four weeks. The RTI system often logs two payments in a single calendar month, triggering a drop in benefit entitlement. These are not isolated glitches; they point to a systemic failure. A government spokesman said: 'In the vast majority of cases using Real Time Information supplied by employers is an efficient and accurate method of calculating Universal Credit payments – and less than 1 per cent of cases do not match. 'If a claimant wishes to dispute the earnings information we have used, they can submit evidence to us, and we will look into the case and make any necessary changes.' The benefits bill is unsustainably high and reform is clearly needed. But if Starmer is now open to concessions, this is his opportunity to go beyond cash savings. He should instruct Welfare Secretary Liz Kendall to review the reliability of the RTI system underpinning Universal Credit. At its core, the principle that work should pay is absolutely right. But it only holds water if the systems ensuring that promise are accurate, transparent and fair. Because too many claimants are being failed by the very mechanism meant to support them. If Starmer wants to reform welfare, he must start by fixing the machinery behind it before another Horizon-style scandal hits the headlines.
Daily Mirror
28-04-2025
- Business
- Daily Mirror
DWP shares Universal Credit warning and tells claimants to 'report themselves'
While most employed earnings are automatically received through the Real Time Information system, some cases require manual reporting - for example, if you're self-employed Universal Credit claimants are being reminded of Department for Work and Pensions (DWP) rules which they must follow in order to receive benefit payments. According to the latest DWP statistics, 7.5 million people are claiming Universal Credit, the highest number since its introduction in 2013. You can claim Universal Credit if you are unemployed or you are working but on a low income. There is no set level for how much money you get every month - what you get is dependent on your personal circumstances which include things like age, whether you live in a couple, and whether you have children. Because of this, you need to let the DWP know of your financial circumstances - such as savings and earnings - as these details are crucial for the department to calculate the correct level of support. While most employed earnings are automatically received through the Real Time Information system, some cases require manual reporting, for example, if you're self-employed. Under the rules, if you're paid too much Universal Credit, you will have to pay it back to the DWP, and this is usually taken from your future payments. The rules cover all Universal Credit claimants, including self-employed people. A recent parliamentary question reiterated the rules around reporting certain finances to the benefit department. The question came from Liberal Democrat MP Ian Roome, who asked what the DWP was doing to help people who are "unable to demonstrate consistent monthly income figures" apply for Universal Credit. In response, Labour Party MP Sir Stephen Timms said: "We recognise that some self-employed customers, including those in the farming industry, are likely to report large monthly fluctuations in their earnings. Join Money Saving Club's specialist topics "Steps have been taken to account for this, such as allowing self-employed losses to be carried forward into future assessment periods. Wherever possible, employed earnings are received through the Real Time Information (RTI) system used by employers to report Pay As You Earn (PAYE) data to His Majesty's Revenue and Customs (HMRC). "RTI enables a customer's Universal Credit award to be automatically adjusted to reflect their fluctuating earnings, which eases the reporting burden on customers." Mr Timms said: "If earnings are not reported through RTI for any reason, the customer will need to self-report their earnings and provide evidence of these." The minister added: "We are committed to reviewing Universal Credit to make sure it is doing the job we want it to, to make work pay and tackle poverty. The review will include consideration of the support in Universal Credit for customers with fluctuating incomes." The website warns you could be taken to court or have to pay a penalty if you give wrong information or do not report a change in your circumstances which affects your claim. Citizen's Advice says that as soon as you know about a change that might affect your Universal Credit claim, you will need to tell the DWP as soon as you can. They advise you to do this even if the change is relatively small. It added: "It's always better to report something if you're not sure". You can report a change of circumstances by signing into your Universal Credit account online through the "Report a Change" section. You can also call the Universal Credit helpline on 0800 328 5644, but this is likely to take longer as you might have to wait for someone to answer.
