Families ‘pushed into poverty’ by Universal Credit
WELSH housing association tenants on Universal Credit are already in nearly £1.5m of rent arrears debt, according to a survey of housing associations in Wales.
A survey conducted with 3,475 people living in Welsh housing association homes shows each tenant has arrears averaging £420.
Today Community Housing Cymru, the membership body for housing associations in Wales, is warning that the UK Government’s flagship benefit scheme is pushing families into debt, causing suffering and hardship for tenants, and threatening housing associations’ financial stability.
In Wales, the Universal Credit scheme has been rolled out by the Department for Work and Pensions (DWP) to just 40,000 claimants in social and private homes, a mere 10% of the expected roll-out figure.
Community Housing Cymru, along with its partner federations elsewhere in the UK, is calling for “fundamental flaws” to be removed from Universal Credit before it is fully rolled out. This includes scrapping the “two child” policy where families will only receive benefits to cover the cost of their first two children.
The policy is impacting housing association tenants across the UK, with housing association tenants in England now in arrears equating to £21.6m, while in Scotland tenants have arrears totalling “well in excess of” £1.2m.
The four housing federations, representing more than 1,000 housing associations across the UK, say serious problems with the system include tenants losing thousands of pounds upon reassessment. The “two child” policy and “benefit cap limit” have also been held up as pushing families into poverty, as they will no longer receive benefits to cover the cost of feeding and clothing more than two children.
The UK Government addressed some of Universal Credit’s flaws in the last budget in October 2017 and has already committed to making some changes before its roll-out in the summer. However the four housing federations say these changes aren’t enough, and are now urging Government to make further changes before the next rollout due this year, when hundreds of thousands more will be moved on to Universal Credit.
The changes they are calling for include allowing housing support staff and agencies like Citizens Advice, to negotiate Universal Credit claims for vulnerable individuals; ensure Universal Credit is paid to people and their landlords on time, at the same time: the Department for Work and Pensions should must adapt Universal Credit to cope with greater numbers and more complex cases; and the Government needs to restore in-work allowances and revise the rules so that the self-employed, those working in the gig economy with fluctuating pay packets or those who are not paid monthly do not lose out.
They say that present policies mean people are losing money as a consequence of moving onto Universal Credit now.
Stuart Ropke, Chief Executive of Community Housing Cymru said: “The recent changes to Universal Credit are welcome, but as it stands, the system is still not fully fit for purpose. Implementing our five asks will improve the mechanisms of the policy while empowering tenants to take responsibility for their finances. However, to do this, it’s crucial more support is offered around budgeting to improve financial and digital literacy among the most vulnerable in our society.”
A DWP spokeswoman said: “Rent arrears are complicated and they cannot be attributed to a single cause. Our research shows that many people join Universal Credit with pre-existing arrears, but the proportion of people with arrears falls by a third after four months in UC.
“The best way to help people pay their rent and to improve their lives is to support them into work and Universal Credit is helping people move into work faster and stay in work longer than the old system.
“The majority of claimants are comfortable managing their money but we are increasing support to help people who need it to stay on top of their payments. Up to 100% benefit advances and direct rent payments to landlords can be provided. We also recently removed the seven-day waiting period from new claims and will be paying people’s Housing Benefit for two weeks while they wait for their first full Universal Credit payment.