80% of credit claimants in debt – report
JUST six months after Universal credit was introduced in North Tyneside, 80% of claimants are in debt.
More than half a million pound is owed by universal credit tenants, an average of £530 arrears per tenant.
The controversial scheme was introduced in April 2018 with 255 claimants on the scheme.
By September 10, 974 people were receiving Universal Credit.
A report to North Tyneside Council’s housing committee claimed the authority predicted the situation which has unfolded.
It reads: “As expected there has been a significant increase in the number of council housing tenants on universal credit since full service went live.”
Within the first three months of the scheme going live, there were 101 referrals to the Citizens Advice for universal credit claimants needing support to manage a personal budget.
This situation has happened despite all claimants being offered financial advice to cope with the changes and North Tyneside Council has been offering a more in-depth advice and support service than the minimum regulatory requirements.
Universal credit is one single payment from the Department of Work and Pensions which replaced six other benefits - housing benefit, income support, employment and support allowance, job seekers alowance, child tax credit and working tax credit.
The switch usually leads to a fiveweek wait before the first payment, North Tyneside Council’s housing committee report says, but this is often longer.
Universal credit has come under fire since its inception, leaving many claimants worse off than they were on legacy benefits.
The Trussell Trust – the UK’s largest food bank network – has reported food bank referral rates in areas where the full credit rollout has taken place are more than twice as high as the national average.
A spokesperson for the Department of Work and Pensions (DWP) said the government is working with local councils where universal credit has been implemented.
He said: “Universal credit simplifies an out-of-date, complex system with evidence showing claimants are getting into work faster and staying in work longer.
“Rent arrears are complicated and cannot be attributed to one cause.
“Our research shows many people join universal credit with pre-existing arrears but the proportion of people with arrears falls by a third after four months on UC.
“Anyone moving to UC from housing benefit gets an additional two weeks of payment.”