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The Department for Work and Pensions (DWP) must pay out compensation to families who receive their Universal Credit late, a report declares today.

The major policy shift could have helped hundreds of thousands of people who have not received their first payment on time.

As of February 2018, a shocking 83% of Universal Credit claimants did not receive their first payment on time and in full.

The standard waiting time for the benefit, paid to 1.6million claimants and counting, is five weeks.

The recommendation is made by the liberal Conservative-leaning think tank Bright Blue in a major report on reforming UC.

(Image: www.alamy.com)

The group's report, Helping Hand? Improving Universal Credit, calls for an Independent Case Examiner to examine cases the DWP has handled wrongly.

The case examiner could set standards for the DWP, such as delivering payment on time, as well as standards for the claimants.

"The amount of compensation issued to UC claimants should to some degree mirror the amount lost by claimants because of sanctions," Bright Blue said.

"Specifically, the financial compensation offered to claimants as a result of non-compliance by DWP should be tiered according to the number of weeks a claimant has waited for their UC award."

The Bright Blue report also recommended the DWP introduce a UC phone app and a live chat facility, and cap the number of claimants dealt with by each work coach.

(Image: PA Archive/PA Images)

The think tank said a certain amount of overpayments by the DWP should be disregarded if the government made the mistake.

And it recommended a relaxing of the Minimum Income Floor, a cap on benefits for self-employed claimants that is currently being challenged in the High Court.

Ryan Shorthouse, Director at Bright Blue and co-author of the report, said: “Universal Credit has plenty of potential.

"A majority of claimants are coping with and adapting to Universal Credit.

"There are positive experiences with work coaches. And there are positive attitudes too: especially towards the single payment model and the use of conditionality.

“However, as it has gone from idea to implementation, the initial widespread support Universal Credit enjoyed has dissipated.

"Despite welcome improvements made by the Government in recent years, there are too many examples and too much evidence of significant hardship experienced by a sizable minority of those on Universal Credit.”

A DWP spokesperson said: “We welcome the report’s finding that the majority of people have had a smooth move onto Universal Credit, appreciating the simple monthly payment and work coach support.

“Universal Credit is a force for good, supporting over 1.6 million people. The majority of claimants are happy with the service and where challenges remain, we will continue to make improvements.”