Universal Credit ‘ traps into hardship or debt’
A WESTMINSTER committee has called for a “starter payment” for Universal Credit to ensure people have enough money for food and heating.
It also said the system of advance payments that is actually a loan is leaving people with a choice of either hardship or debt.
The cross- party Work and Pensions Committee at the House of Commons said people should not be left without cash as they wait for the first payment to be made.
The five- week wait for the benefit to be paid has been identified by foodbanks as a reason for more people seeking emergency help.
The advance payment, which is a loan, then reduces people’s monthly benefit payments for the next year as it is clawed back.
The committee found that many people cannot afford the repayments and said the choice of reduced future payments or a fiveweek wait and hardship is unfair.
In a new report, the committee has called for a starter payment of up to three weeks of the standard allowance of the benefit.
It also wants people who are moved on to Universal Credit from other benefits to be paid without any gap, and said the temporary £ 20- a- week increase should be extended beyond the March 2021 date set by the UK Government.
Stephen Timms MP, chair of the committee, said: “There is a growing body of evidence that moving to Universal Credit leaves many reliant on foodbanks, falling seriously behind with their rent, and even experiencing increased levels of psychological distress.”
Glasgow South West SNP MP Chris Stephens is on the committee.
He said: “This report adds to the wealth of existing evidence showing that the current wait of at least five weeks for the first Universal Credit payment causes a raft of problems for households including debt, or further debt.
“The report calls on the UK Government to do what the SNP has been calling for but make those starter payments non- repayable grants once the claimant has been deemed eligible for Universal Credit and scrap advance payment loans.
“This would ensure all those who apply receive an upfront payment to see them through until the first payment and prevent people from falling into debt or financial hardship.”
In Glasgow, the Universal Credit roll- out started between September and December 2018 to new claimants, and claimants on one of the legacy benefits when they had a change in circumstances.
The call by the Work and Pensions Committee echoes concerns raised by campaigning organisations who have long argued the benefit and the wait for a first payment is the cause of much hardship.
The Joseph Rowntree Foundation published research in the summer in which Universal Credit claimants in Glasgow widely reported the five- week wait was the worst part of moving on to Universal Credit.
It said: “Several claimants struggled to afford essentials like food.
“Many relied on family or friends to get by. Most took advance payments to avoid immediate rent arrears and hunger, but then had difficulty managing repayment deductions.”
The Work and Pensions Committee said: “Advances should still be available for people who need further support to get by, but they should be renamed ‘ new claim loans’ to make clear that they will need to be repaid.”
Mr Stephens added: “There is overwhelming support for this from anti- poverty organisations up and down the UK and MPs across the House of Commons.”