Universal Credit wait time cut to five weeks after rebellion threat

THE Government has bowed to pressure and announced a £1.5billion package to address “genuine concerns” over the roll-out of Universal Credit in an attempt to see off a backbench revolt.

Philip Hammond announced that the wait for the initial payment for the policy’s claimants will be cut from six to five weeks and that the initial sevenday waiting period will be removed.

The move came after the key welfare reforms were placed in jeopardy when up to 25 Tory MPS were said to be ready to vote with Labour for a pause in the roll-out.

Universal Credit – a flagship reform of David Cameron, the former prime minister – combines six different benefits into a single payment, simplifying the system while making it fairer for those seeking a way back into work.

However, a number of Tory MPS raised concerns that claimants would lose out during the switch due to a wait of up to six week for the first payment.

The Chancellor told MPS that he had earmarked the £1.5 billion to remove the seven-day waiting period, so entitlement for Universal Credit starts on the day of the claim. He added that any household needing an advance would be able to access a full month’s payment within five days of applying. He also said that the repayment period for these advances – effectively an interest-free loan for struggling claimants – will be extended from six to 12 months.

Mr Hammond told the House of Commons yesterday: “Universal Credit delivers a modern welfare system, where work always pays and people are supported to earn. But I recognise the genuine concerns on both sides of the House about the operational delivery of this benefit.”

The Treasury also announced that any new Universal Credit claimant in receipt of housing benefit will continue to receive it for two weeks. It means that, from April 2018, housing benefit will be paid for the first fortnight of Universal Credit claims, where otherwise it was stopped, effectively leaving 2.3 million households an average of £230 better off.

The Treasury said the Government would slow down the benefit’s roll-out, between February and April next year, and hinted that the rate at which payments would taper off could be reduced further. The Universal Credit taper rate means that a benefit award is reduced by 63p for every £1 a claimant earns above their work allowance, which is set at £397 a month for those who do not receive housing support.

It comes after 12 Conservative MPS wrote a private letter to the Work and Pensions Secretary demanding a pause in the planned tenfold increase in the roll-out.