Labour calls for Universal Credit to be scrapped, as the public lose faith in the new benefits system.
Full roll-out of the Government’s controversial Universal Credit scheme has been delayed again and is now not expected to be completed until September 2024, it has been reported today.
According to the BBC, ministers have delayed roll-out of the new benefit system because too many people are “scared” to move to it. The delay adds an extra £500 million to its spiralling cost.
Universal Credit rolls six social security benefits, including tax credits and housing benefit, into one single monthly payment.
The Department for Work and Pensions admitted that the delay until 2024 – which means universal credit will be at least seven years behind its original completion date – was caused in part by claimants being scared to sign up for the new benefit.
Universal credit has been linked to increased rent arrears, debt, stress, and food bank use among its low-income claimants, who are forced to wait five weeks for a first payment after moving on to the benefit, and in many cases find themselves worse off and facing volatile monthly payments.
Margaret Greenwood, the shadow work and pensions secretary, said the delay was “hugely embarrassing” for ministers. “The government has been forced to delay universal credit yet again because people do not have confidence in the system,” she said.
Quince said the problems facing universal credit would be lessened “if the party opposite desisted with their scaremongering”.
About 2 million people are in receipt of universal credit, which bundles six working-age benefits into a single monthly payment. More than 6 million will be on the benefit by the time it is fully rolled out by the new completion date of September 2024.
Although ministers have promised income protection for claimants who find themselves worse off after moving to universal credit, this applies only to those who move under the managed transfer scheme starting later this year. The thousands who switch to universal credit from legacy benefits because of a change of personal circumstances – moving house, for example – do not qualify for protection.
Concerns about plunging public confidence in universal credit led the DWP to launch a £225,000 newspaper advertising campaign to “detoxify” the benefit last May. However, it was banned by the Advertising Standards Authority for being misleading.
A recent study of the impact of universal credit by the Resolution Foundation thinktank found that 46% of claimants nationally would be worse off on universal credit and 39% better off, with families in the most deprived areas more likely to lose out financially.
A Five weeks wait leads to vulnerability
A built-in minimum five-week-wait for an initial payment has been blamed for rising homelessness and food bank use, and charities say problems in the design of the new benefit are pushing vulnerable people into the arms of loan sharks.
Advances of up to 100% of a person’s predicted monthly payment are available for those struggling to get by during the initial wait. However, this has to be gradually repaid through monthly deductions to payments and charities argue that this traps people in a cycle of debt.
NHS worker left with no money for food while facing five-week wait for Universal Credit
Rachel, 43, was forced into her overdraft after the job centre reduced her monthly Universal Credit benefit by more than £100 a month in order to repay her ‘advance’
Rachel, who worked for the NHS for 27 years, is the focus of a new BBC Two show Universal Credit: Inside the Welfare State, which starts at 9pm Tues. Catch up iPlayer.
An NHS worker was left penniless when she was gave up work and faced a five-week benefit wait.
Rachel, 43, thought her worries were over when she was given an advance payment of £1,300 by the job centre.
Just last week, the DWP were slammed for clawing back £50 million in loans from Universal Credit claimants in only a month.
However, she was then hit with monthly deductions from her Universal Credit in order to repay the ‘advance’, pushing her further into debt.
Rachel, who worked for the NHS for 27 years, is the focus of a new BBC Two show Universal Credit: Inside the Welfare State, which starts at 9pm tonight.
She signed on to Universal Credit after leaving work to look after her two young kids and her elderly parents.
Universal Credit has also been found to discriminate against people with disabilities.
The Court of Appeal recently dismissed a Government appeal against two previous court judgments which found that the Secretary of State for Work and Pensions had unlawfully discriminated against thousands of severely disabled people who moved onto Universal Credit.
The BBC reports that full roll-out of Universal Credit will now not be completed until September 2024, seven years later than the original target of 2017.
The government claims Universal Credit will make things better for claimants, but where it has already been rolled out it’s been plagued with problems that are pushing more people into poverty. It has caused tens of thousands of people to fall into debt, rent arrears, and to become reliant on food banks. From January 2019 the DWP is going to start transferring people from their old benefits onto Universal Credit. This will be done in small numbers at first, but eventually several million people are set to be migrated over to Universal Credit. This will not be done automatically – each claimant will have to start a new claim for Universal Credit, if they don’t apply by a deadline given by the DWP their old benefits will be cut off leaving them with nothing. This is going to cause massive hardship as applying is so complicated that many claimants face huge problems in getting it right. If you get your application wrong it can cause long delays in getting your first payment.
Applications can only be made online burdening those without internet access or who can’t use computers with further stress and anxiety over their claims. Eventually, around seven million people will be on the new benefit – including half of all families with children. So far Universal Credit has only been rolled out in trial areas for new claimants with straightforward claims or those whose circumstances have changed. Currently 1 in 5 Universal Credit claims fails because of problems people come up against during the application process. This means hundreds of thousands of claimants could lose out. It is likely that the majority of people moved to Universal Credit are going to be entitled to less money than under the legacy system of tax credits and other benefits. 3.2 million working families are expected to lose an average of £48 a week.
Austerity cuts which took £37 billion out of the social security budget for working-aged people are yet to come into effect too. Instead of providing a safety net for people on low incomes, Universal Credit is driving more people into debt. Sign The Mirror’s petition to stop the rollout of Universal Credit.