Universal Credit is intended to tidy up various benefits in to a single payment and to smooth out the change for people previously on benefits back to work. While the theory is fine, in practice the introduction of UC is causing hardship for people who can least afford it.
In a major new report – Delivering on Universal Credit – Citizens Advice reveals that the requirement to wait for six weeks to receive any payment means people face serious financial insecurity, with many being forced into debt. Locally, some council officers have been advising claimants to set some money aside week by week so that when UC is eventually introduced fully they will have funds to live on while they wait for their first UC payment. While this is good advice saving on a tight budget is easier said than done for households on low incomes.
The research by Citizens Advice also identifies a wide range of administrative challenges, including problems with the online system and long waits to get help over the phone, which can make the initial six-week wait even longer. UC merges six existing benefits into one – including tax credits, housing benefit and Employment and Support Allowance (ESA). By 2022 over 7 million households will receive Universal Credit and Citizens Advice estimates that over half (54%) of these will be working households.
As part of the new study, Citizens Advice surveyed 800 people who had sought help with Universal Credit in areas where there is full service – meaning anyone who would have previously have claimed one of the old benefits has to apply for Universal Credit. The survey revealed that:
In the last year Citizens Advice supported more than 30,000 people with Universal Credit issues. A quarter of these also needed help with debt issues.
Full service Universal Credit has been rolling out gradually across England and Wales for over 2 years, to around 5 new areas each month. In October however this process is set to speed up significantly, to over 50 new areas every month. Citizens Advice is calling on the government to pause this acceleration and use the time to fix key problems with Universal Credit, before thousands more people are brought into the system. The government expects the roll-out of the full digital service to reach Guildford and Aldershot in July 2018. People who are still on existing benefits or tax credits can expect to be transferred to Universal Credit from July 2019 and it is planned that the process will be complete by March 2022. If you are claiming benefits and are unclear as to when you will be required to transfer to Universal Credit don’t worry – you should be notified in plenty of time.