Welfare Reform Bill

We are looking carefully at the system of hardship payments we want to put in place under universal credit. We want to ensure that there remains a financial safety net for claimants who have been sanctioned—that is what hardship payments are about. However, we want to avoid the existence of such a safety net undermining the deterrent effect of sanctions. It is clearly a rather delicate balancing act. I should make the point that, under universal credit, hardship is only available following a sanction, not at the start of a claim. It will no longer be necessary within the structure of universal credit. We are looking at a payment for people who have been sanctioned. We are still considering how best to achieve this but believe that the ability to make some payments recoverable is one way of continuing to support those most in need while ensuring hardship payments are not seen as a simple replacement for sanctioned benefit. In other words, we want to make sure that sanctions continue to keep having an impact. We are still considering our approach to recovery that will ensure adequate safeguards are in place. This includes the arrangements in more complex situations of the kind the noble Lord, Lord McKenzie, pointed out, such as when a couple has separated. Regrettably, I can not give hard answers to his, as usual, specific and beautifully placed questions. Those are issues that we need to address and are addressing. Recoverability may not be something we decide to introduce immediately, but if we decide to make payments on a recoverable basis then we will ensure claimants fully understand this when they apply. Similarly, any future recovery of those payments will be sensitive to the circumstances of claimants and we will ensure it is set at a manageable level. The Secretary of State will have powers to either suspend recovery or not recover at all. We expect that any repayments will be in line with existing recovery arrangements. Without making an absolute hard commitment on the question raised by the noble Lord about when it starts, my instinct is that it would be when the claimant moved back into the formal universal credit system. In response to the questions raised by my noble friend Lord Kirkwood, I am dreading that late Thursday night particularly as we are meant to leave at 7 pm on Thursday. We will need to address any such regulations to the extent that they come here. These are people who have been found guilty of committing crimes. It is up to judges to decide how they should be punished. The debate on how you make a financial penalty bite is one that the legal system will take account of and deal with. This is an area where the bulk of the decisions are taken within a legal context rather than in the context of the universal credit. There may be some enabling moves we need to make within universal credit and the late Thursday night regulations will be a time of horror for me. I hope I have clarified why recovery might be appropriate, that the process of any recovery would be managed appropriately. I urge the noble Lord, Lord McKenzie, to withdraw the amendment.