News Tag: Universal Credit

The National Housing Federation (NHF) recently conducted a large survey of housing association tenants detailing their experiences claiming Universal Credit during the coronavirus pandemic. The survey found positive experiences of the system and service, but overall, the picture was very mixed, with some people clearly struggling.

The report highlights the findings of the survey and covers the claimant journey, the impact of claiming on people’s lives, employment, experience of the Universal Credit service, and what more housing associations can do to support tenants. They also made a series of recommendations for the government, the Department for Work and Pensions (DWP), and housing associations.

The survey ran in spring 2021 and gathered responses from 3,520 tenants claiming Universal Credit across eight housing associations.

Key findings

• Overall, respondents generally found keeping up to date with their claim online easy and many were grateful for the financial support. Just over half of people generally agreed that Universal Credit is enough for the basics (53%, n=3,050).
• While the NHF cannot say Universal Credit causes hardship, there was evidence of real strain on finances and health and wellbeing:
  • 84% (n=3,007) of respondents needed financial help, such as loans, while claiming and over a third said they always run out of money before their next payment.
  • 79% (n=2,989) of respondents reported that they had struggled to pay for at least one essential item when claiming, with 43% saying they struggled to pay for food.
  • One in ten respondents said hardship on Universal Credit had given them a health condition. People also reported high levels of anxiety with 19% (n=2,980) rating themselves as completely anxious yesterday.
• There was a mixed experience with the Universal Credit service with 48% (n=2,956) of people reporting they were broadly happy. Service experience may be linked to staff, mistakes with a claim or a lack of flexibility to individual circumstances, as well as whether people are better or worse off when compared to legacy benefits.
• Housing associations can exacerbate stress relating to claiming through notices of rent arrears.

Recommendations for the government and the DWP

• The government must not cut £20 per week of people’s Universal Credit from October 2021. The NHF’s survey shows evidence of real financial strain with many people unable to afford the essentials.
• The government should end the five-week wait for first payment. Two in three respondents did not have money to cover the wait and it pushed some people into debt from which they haven’t recovered.
• The DWP should review advances and deductions to ensure people can meet their own basic needs and their obligations to creditors. It should also review application of the benefit cap and removal of the spare room subsidy.
• The DWP should extend the circumstances that allow a backdating of claims to the point of entitlement.
• The DWP should consider compensating people who claimed the benefit when it was first introduced due to the longer wait for payment and no legacy benefit run-on. Respondents reported having still been in debt years after the wait for their first Universal Credit payment.
• The DWP should invest in further staff training and case monitoring to ensure a consistent level of service for claimants.
• The DWP should review reporting of annual rent updates. Many respondents found updating this difficult and wanted their housing association to do it on their behalf, given they had to verify costs.

Considerations for housing associations

• It is recommended that housing associations advertise the welfare service they offer, or links to other services, more widely as most people were not aware or had not spoken to their housing association about their claim.
• Housing associations should continue taking supportive approaches to income collection to reduce anxiety and help claimants to manage their finances

• Union body publishes regional and constituency impact on working families of slashing universal credit  
• Most families hit by £1040 pa cut are in work, say anti-poverty campaigners 
• Many of those affected by cut will be key workers, warns TUC 
• Cutting universal credit is “levelling down” 
   

The TUC has today (Friday) warned that millions of working families – and many key worker households – will be worse off as a result of the government’s planned cut to universal credit. 

New analysis published by the union body reveals the regional and local impact cutting Universal Credit will have on low-paid workers – even in wealthier constituencies like the chancellor’s and prime minister’s. 

Majority of those hit by autumn cut are working families  

2.3 million workers in the UK are currently receiving universal credit – the equivalent of around 2 in 5 (38%) of all universal credit recipients. They will all be hit by the £20pw cut.  

However, the working tax credit is also being cut, having also been raised by £20pw in early 2020.  

So the majority of those affected by the £20pw cut to benefits this autumn will be families who are working, according to the Joseph Rowntree Foundation (JRF). 

The TUC says low-paid key workers will be among those worst affected.  

TUC research published last week showed that one million children in key worker households are currently growing up poverty – with many currently receiving in-work benefits like universal credit. 

Local breakdown 

Today’s analysis breaks down the number of people receiving universal credit by nation, region and local constituency. 

It shows that even in wealthier parts of the UK the cut to universal credit will impact heavily on low-paid workers. 

For example, in the Chancellor Rishi Sunak’s constituency (Richmond) nearly half (48%) of people currently receiving universal credit are in work – with 3,025 workers in the constituency depending on it. This number will only grow as more families transfer over from the working tax credit. 

And in Prime Minister Boris Johnson’s constituency (Uxbridge) around two-fifths (38%) of universal credit recipients are currently in work – with 3,665 workers in his constituency depending on it. This number will grow as more families transfer over from the working tax credit. 

Vital lifeline 

The TUC says the £20 increase in universal credit has been a “vital lifeline” for low-paid workers – and that reducing a crucial in-work support will push more families below the breadline.   

The TUC says a decent social security system is also essential for helping those who lose their jobs get back on their feet and back into work. 

In addition to stopping the planned £20pw cut to universal credit, the government must increase the minimum wage to £10 an hour and urgently bring forward an employment bill to tackle insecure work, says the union body. 

TUC General Secretary Frances O’Grady said:  

“Everyone should have enough money to live on. 

“But if the universal credit cut goes ahead millions of working families – and key workers – will be forced to get by on much less every week. It is levelling down – not levelling up.   

“Ministers should abandon this cruel cut that will hit low-income working families. We need a social security system that helps people get back on their feet – not one that locks them in poverty. 

“And we need decent jobs on decent pay for every worker, in every part of the country.  

“That means increasing the minimum wage, investing to create good green jobs and tackling the scourge of insecure work. Cutting universal credit isn’t the way to achieve decent work.” 

ENDS 

Notes to editors: 

Number of workers receiving universal credit by nation and region (excludes those to be transferred over from the working tax credit) 

 Source: TUC analysis of Stat Explore data using May 2021 data 

• A full constituency list of working people on universal credit can be found here: https://www.tuc.org.uk/sites/default/files/constituency%20data%20uc.xlsx  
• Information on relative levels of wealth and deprivation in parliamentary constituencies can be found here: https://commonslibrary.parliament.uk/research-briefings/cbp-7327/
• The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together the 5.5 million working people who make up our 48 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living. 

Contacts: 

TUC press office
media@tuc.org.uk 
020 7467 1248  

 

Government plans to cut Universal Credit by £20-a-week in October will impose the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state, according to analysis by the independent Joseph Rowntree Foundation (JRF).

This historic cut to the incomes of around 6 million families is scheduled in law for 6 October 2021 and will coincide with the final day of Conservative Party Conference.

As ministers and MPs go for their summer break, there are 5 facts about the impact of this cut which they should consider:

• The Government would be responsible for the biggest overnight cut to the basic rate of social security since the birth of the modern welfare state. This will be a huge shock for millions of people on low incomes who will have £20 less to spend each week.   

• Half a million more people are set to be pulled into poverty, including 200,000 children.

• Working families make up the majority of families who will be affected by the cut to Universal Credit and Working Tax Credit.

• Families with children will be disproportionately impacted. Around 6 in 10 of all single-parent families will experience their income falling by the equivalent of £1,040 per year because of the cut in UC or WTC. 

• Despite a commitment to ‘levelling up’ the impact of the cut will be the greatest across the North of England, Wales, the West Midlands and Northern Ireland.

New analysis from JRF on the adequacy of working-age social security used a range of illustrative families to demonstrate how adequacy has changed for different households over time. In their illustrative family with three children, where one adult is working full-time, and the other is working part-time (living in Kernow West, a medium cost area):

• In 2013/14, they would have been £271 a month above the poverty line.

• Cuts and freezes in the decade leading up to the pandemic eroded their income, so that even with the £20 increase in 2020, they are now below the poverty line.

• If it the cut goes ahead, they will be a huge £150 per month below the poverty line.

Particularly worryingly, the analysis found that the planned cut would leave an illustrative single adult who loses their job, destitute – the most extreme form of poverty.  

The Poverty Alliance recently submitted a Freedom of Information request asking the Government to disclose any analysis that it has undertaken on the potential impact of the £20-a-week cut to Universal Credit. The Department for Work & Pensions deemed the disclosure of the information to not be in the public interest. This is in spite of the fact that:

• When we entered the pandemic, the main rate of out-of-work support was at its lowest level in real terms since around 1990 and its lowest ever as a proportion of average wages. At the same time, support for families in work had been eroded, causing a rise of in-work poverty.

• The cut is opposed by six former Conservative Work & Pensions Secretaries, the Northern Research Group of Conservative MPs, the One Nation Group of Conservative MPs, numerous cross-party committees in all nations of the UK and a huge coalition of charities and community groups.

It is important to note that around 2 million people claiming legacy benefits – Jobseeker’s Allowance, Employment and Support Allowance and Income support – have wrongly been excluded from this vital improvement in support. The £20 increase should be extended to people on these benefits which are mainly claimed by sick or disabled people and carers.

Katie Schmuecker, Deputy Director of Policy and Partnerships for the independent Joseph Rowntree Foundation said:

“Universal Credit has been a lifeline that has helped keep millions of heads above water, but the new analysis should act as a stark warning of the immense, immediate and avoidable consequences of what amounts to the biggest overnight cut to the basic rate of social security since the Second World War.

“We all accept governing is about priorities but cutting the incomes of millions of the poorest families and sucking money out of the places in which they live, flies in the face of the Government’s mission to level up our country. This is not about generosity, it’s a matter of investing in families so they have the dignity of being able to meet their needs and supporting everyone in and out of work to escape poverty.

“The public deserve to know what the Government expects the impact of this cut to be. Ministers cannot hide the fact that they are ploughing ahead with a cut despite knowing it will be devastating for millions of families. They should publish their analysis on the impact of the cut as soon as possible.”

ENDS

JRF Media Relations | pressoffice@jrf.org.uk | 01904 615958

Calum Masters | calum.masters@jrf.org.uk | 07976 435559

Notes to Editors

1. How has JRF worked out ‘the biggest overnight cut to the basic rate of social security since the foundation of the modern welfare state’ statement? We have reviewed officially published data on rates of benefits stretching back to 1948 (when the Beveridge system was introduced), in particular, the main element of support for a single adult aged over 25 who has lost their job. It is possible that the cut this October could be the biggest cut ever, though we have not looked in detail at the period before 1948.
2. JRF has published a new briefing on the adequacy of social security.
3. Last week, JRF published new research showing the cut to Universal Credit would reduce the value of out-of-work benefits to their lowest recorded levels relative to what the public thinks is an acceptable income.
4. Even prior to the pandemic, around 2.4 million people experienced destitution in 2019 (up 54% since 2017), including 550,000 children (up 52% since 2017) with inadequate benefit levels and debt deductions under Universal Credit cited as a leading cause. This highlights the need not to repeat the mistakes of the past by cutting social security again. (JRF, 2020)  
5. The Joseph Rowntree Foundation is an independent social change organisation working to solve UK poverty. For more information visit www.jrf.org.uk 

The Salvation Army is calling for the Government to include Universal Credit Advance Payments in its Debt Respite Scheme.

The Scheme is a 60-day ‘breathing space’ where enforcement action from creditors will be paused for people with problem debt. However, Government loans, including Advance Payments for Universal Credit (UC) claimants, are not included. Many rely on these loans to make ends meet while their claim is processed and the repayments are automatically deducted.

Between March and September 2020, over one million UC Advance Payments were made. The Salvation Army is concerned that many will have struggled to eat or heat their homes while they were repaying this Government debt.  As unemployment is expected to keep rising, the Government is being urged to act now to protect more UC claimants from this debt trap.

A new Salvation Army report, ‘No One Left Behind’, shows how deep Covid-related debt is set to become and how vulnerable people are most at risk. The report analyses calls to our debt advice lines and finds that of those who accessed the service:

• People on low incomes have increased their level of debt by 191% [1]
• Full-time workers have an average debt of over £13,000 [2]
• Private tenants experienced a 43% increase in debt levels at the peak of the pandemic [3]

The organisation has written a letter urging the Economic Secretary to the Treasury, John Glen, to refocus the Government on supporting people to pay back debt rather than automatically deducting money which many will struggle to pay. The letter has been co-signed by 16 partner organisations*.

The research in our report shows a worsening of people’s debt, which paired with job losses or reduction in income, is putting them at real risk of poverty.

Lorraine Cook, Financial Development Inclusion Manager at The Salvation Army

Lorraine Cook, The Salvation Army’s Financial Development Inclusion Manager said: “It’s the very vulnerable we are most concerned about. The people queuing outside our foodbanks because they can no longer afford to eat are those most likely to rely on Universal Credit Advance Payments to get by. The moment someone has an unexpected payment like a boiler repair or a new pair of trainers for their child, is where repaying this debt can become unmanageable.

“Our Debt Advice Centres have experienced an increase in the number of people seeking our support. The research in our report shows a worsening of people’s debt, which paired with job losses or reduction in income, is putting them at real risk of poverty.

 “Banks and credit card companies will be forced to give much needed space to people struggling with debt and yet the Government can continue to take significant portions from people’s income without respite.

 “The Government should be less focused on collecting money and instead help people manage their finances by highlighting the professional support available from debt support services”.

Whilst the Government has indicated that it is planning to include Advance Payments in the Debt Respite Scheme, due to IT constraints, they will be included on a ‘phased basis’ and no specific timeframe has been given. The Salvation Army is concerned a significant delay means thousands will be pushed into debt before then.  

No One Left Behind

Making debt support work for people on Universal Credit.

DOWNLOAD

 

Additional information

[1] The average debt for those on low incomes from June – August was £3,552 – up from an average of £1,220 from December – February.

[2] From December – February debt held by those working full-time averaged £8,926 per person. This increased to £13,380 per person from March – May.

[3] In December – February this group’s total debt averaged £10,183 per person. From March – May this average increased to £14,549 per person.

* Partner organisations

• Advice UK
• Bournemouth Churches Housing Association
• Enham Trust
• Entitledto
• Fedcap Employment Limited
• Friends of Stour Connect
• Get Ready for Work
• Groundwork
• Integrate
• Landau
• Longhurst Group
• National Association of Welfare Rights Advisers
• Quaker Social Action
• The Women’s Organisation
• Unison
• Z2K

Claimants on disability benefits will no longer be required to attend face-to-face assessments. The change also covers health checks for Universal Credit.

From Tuesday 17 March, face to face assessments for all sickness and disability benefits have been suspended for 3 months. 

In summary the following is happening:

• Face-to-face assessments for all sickness and disability benefits will be suspended for the next 3 months effective on Tuesday 17 March 2020.
• This is being taken as a precautionary measure to protect vulnerable people from unnecessary risk of exposure to coronavirus as the country’s response ramps up in the ‘delay’ phase.
• We will ensure those who are entitled to a benefit continue to receive support, and that new claimants are able to access the safety net.
• It affects claimants of Personal Independence Payment, those on Employment and Support Allowance and some on Universal Credit, and recipients of Industrial Injuries Disablement Benefit.
• The suspension of face-to-face assessments also covers new claims to those benefits.
• Anyone who has a face-to-face assessment appointment scheduled from Tuesday 17 March onwards does not need to attend and will be contacted to discuss next steps and alternative arrangements, which could involve either telephone or paper-based assessments.
• We expect this measure will be in effect for the next 3 months but we will be regularly reviewing the position in line with Public Health advice.
• No further action is required by any claimant as a result of this change. They will be contacted with advice on next steps.

You may find the following links helpful:

DWP press release regarding this announcement: https://www.gov.uk/government/news/face-to-face-health-assessments-for-benefits-suspended-amid-coronavirus-outbreak

The current NHS guidelines on coronavirus, including advice on those who should stay at home.

Coronavirus (COVID-19): UK government response: https://www.gov.uk/government/topical-events/coronavirus-covid-19-uk-government-response

Please share this information about the suspension of assessments with your members, audiences, local networks and branches using your own channels whether that is a newsletter, email update or on social media.

As Universal Credit (UC) continues to be rolled out in London, many voluntary and community sector organisations are working hard to deliver the right support for their beneficiaries. Together with others, the Greater London Authority (GLA) has identified many challenges – especially for disabled Londoners. This work is aimed at identifying those gaps so that the GLA can help the sector to better support their beneficiaries claiming UC.   

We would be grateful if you could complete this survey – it should take about 10 minutes – and/or pass it on to any other relevant organisations in London. We would also be grateful if you could pass the survey on to your local network, as we are keen to learn about how community organisations support people claiming Universal Credit in different London boroughs.  It’s probably best for someone with operational insight to complete it.   

Your answers will be used to inform the GLA’s support for the voluntary and community sector supporting disabled Londoners. 

Please contact Dalia Ben-Galim at lowincome@london.gov.uk if you would like more information and / or a different format. 

The survey will close on Friday 14th February.  

Further information:

Low Income Londoners Project

Equality and Fairness Team

GREATERLONDONAUTHORITY 
CITY HALL, THE QUEEN’S WALK, LONDON SE1 2AA 

london.gov.uk

lowincome@london.gov.uk