UK's Department of Work and Pension (DWP) welfare reform minister Lord Freud has called on the payments industry to provide data to help improve the accuracy of Universal Credit's real-time benefits calculations.
HMRC's RTI system is used by DWP to provide information on PAYE changes, and relies on collaboration with payments industry to validate payment data. Speaking at Tech UK's Payments Innovation 2014 event in London today, Lord Freud said that wider integration with payments systems could help to reduce fraud among working claimants as Universal Credit is rolled out more widely.
"DWP is talking to the banks about this richer data capability, and I consider this to be an opportunity for the payments industry to lead the way in adapting an existing asset that you both own and safeguard on behalf of the UK, to better meet the requirements of all customers, including the government," he told delegates.
"Enabling the government to receive such data need not involve major heart surgery to the existing mainstream payment system."
Lord Freud said that improvements to RTI could improve the ability to detect when claimants were lying about working, as well as providing people whose work circumstances had recently changing with the relevant payment without the need for any adjustment.
"If we apply the RTI principles to aspects other than earnings, like childcare and housing costs, through a richer data solution, it will enable those claimants to make the payments and report them to us at one and the same time.
"This would reduce the administrative burden both on us and on the claimant. From our perspective it would be simpler and would reduce the possibility of errors creeping in."
The government's controversial Universal Credit system is currently being implemented across the country in a staggered rollout that is expected to go fully live in 2017.
Freud also said that the payments industry can help smooth the transition to Universal Credit for claimants by developing "innovative account and payment processes", such as 'jam-jarring', automatic messaging and budget management.
"Beyond the rich data issue, I also believe that our work with the payments industry can potentially offer even greater opportunities in improving service delivery for a better payments experience," he said.
"[This would involve] channels for claimants and pensioners to access funds and report data in a way that captures their lifestyle now and in the unpredictable future, through mobile, and virtual wallet innovations. I need to be able to to save even more through fraud and error, and [the payments industry] can help me by reducing the levels of those losses through innovative new approaches."
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