Is Universal Credit Working?

Universal Credit was introduced a few years back and was to replace six (6) previous benefits people received, and roll them into one easy to manage benefit.

Easy to manage for DWP, Department of Works and Pensions, unsure if it made life any easier for the recipients.

And time has shown, it has not been an easy path for DWP getting Universal Credit online, or fully functioning.

There have been some problems, some of them serious.

Is Universal Credit Working?

Beginnings

As stated, Universal Credit was to roll together six types of benefits those that were eligible received, into one benefit, one monthly payment.

Those six benefits were all means tested and were, income-based job seekers allowance, child tax credit, income support, working tax credit, housing benefit, and income-related employment and support allowance.

It was felt that it would be easier for recipients who received multiple benefits to receive just one benefit encompassing them all, and from the government’s standpoint, it was to save millions of pounds.

The setting up of the new system has been said to be done at a cost of anywhere from over £2 billion, to as high as £12 billion!

Then there were the delays.

The computer programmes were not complete, there were issues in rolling the new system out, delays after delay.

Unfortunately the new benefit system, which was to change the whole way benefits are issued, has been dubbed a “nightmare“. Even by those that originally backed the new system.

The new system was to tested in various parts of the country, and then rolled out to different cities and areas until the entire country was under the new benefit system.

Delays and Budget Issues

Two areas that became apparent problems early on with the new benefit system, were the delays in getting payments to the recipients, and also the one monthly payment.

It was to take six (6) weeks to process any claims, and for that period of time no money was being sent to the applicants. So they had to go at least six weeks without any money.

That is a long time to be without any money if you have rent to pay, children to fee, etc.

Is Universal Credit Working?

Another issue was the one (1) monthly payment of the combined benefits.

Many recipients were used to receiving payments weekly, or fortnightly, and had budgeted their lives that way.

By receiving payments on a monthly basis now, they had to budget and plan accordingly.

Budgeting courses and help was offered to try and alleviate this problem, and “budgeting advances” were also offered to those who needed money while they were waiting for their claims to be processed.

Is Universal Credit Working?

These advances were in the form of a loan, and had to be paid back over the course of up to 12 months, when they started to receive their benefits.

Some of those eligible for benefits and waiting for money turned to other men of getting money. Some borrowed from friends and family, or other bad credit forms of lending.

In speaking with a local housing association who asked to be kept anonymous, they explained some of the issues they had witnessed.

Some of their tenants who had previously received housing benefit were worried and concerned over the delays and time frame to receive the new Universal Credit. In addition, the new benefit was paid directly to the recipient, and not to the landlord.

This particular housing association had tenants come in and return their keys being prepared to move as they were in fear of being evicted due to being late on their rent.

Many tenants stated they could not wait the 6 weeks for the benefit to begin and still pay their rent.

This particular housing association assured these tenants they would NOT be evicted, and went about aiding them in following up on their Universal Credit claims.

However, the stress that they were put through was extremely unpleasant; not knowing if you may lose your home or not.

A Call For a “Pause” in Universal Credit

Recently the CAB/Citizens Advice Bureau has called for a “pause” in the completing and final rolling out of Universal Credit.

The CAB looked at 52,075 cases and found that those people receiving Universal Credit had £4 or less each month to pay any creditors they had after their living costs. This was compared to £16.25 that was available to pay their creditors under the old benefit system.

With a major roll-out of the new system due to occur, there are many concerns due to past delays and problems that have been experienced.

The Chief Executive of the CAD, Gillian Guy stated, “The roll-out of Universal Credit is a disaster waiting to happen.”

“While the principles behind Universal Credit are sound, our evidence shows that if the government continues to take this stubborn approach to the expansion of Universal Credit, it risks pushing thousands of families into a spiral of debt, and placing an even greater strain on public services.”

“Government can help protect these households by taking the simple step of pausing Universal Credit and fixing the underlying problems, so families are less likely to fall into arrears.”

However, a spokesman for the DWP argued by pointing out that the CAB’s research was with recipients that were in debt, not “claimants as a whole”.

They said, “We are committed to helping people improve their lives and raise their incomes.”

“Universal Credit does that by providing additional, tailored support not available under the old benefit system, including more help for those in work so they can eventually stop claiming benefits altogether, and under Universal Credit people are moving into work faster and staying in work longer than under the previous system.”

“The vast majority of claimants are comfortable managing their money, and for anyone who needs extra help, we have budgeting advice and benefit advances.”

The debate continues, is Universal Credit working?

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