Universal Credit must be halted warns charity

Debt family

Flaws in the system means those already on meagre incomes lose out more 

12th September 2017 by Robert Armour 0 Comments

Tory plans to accelerate the roll-out of Universal Credit (UC) will have catastrophic results, a leading charity has warned.

Citizens Advice says plans to increase the rate at which areas are introduced to the new system from five to 50 areas a month from October could have “catastrophic consequences” for households.

Universal Credit merges a number of existing social security benefits and tax credits into one single monthly payment.

But research conducted by CA found that two in five (41%) of those already on the new benefit have no money available to pay creditors as their monthly spend on essential living costs is more than their income.

Overall, UC claimants typically only have around £3 a month left after living costs to pay creditors, says Citizens Advice. 

The survey also found 79% of UC claimants have priority debts such as rent and council tax arrears, compared to 69% of those on benefits that are set to be replaced by UC.

And delays in receiving the first payment is forcing people to borrow money to make ends meet (57%), with only a quarter (27%) being able to get an advance payment on their benefits.

The charity also says the minimum six week wait before UC claimants receive their first payment should be scrapped.

Citizens Advice chief executive, Gillian Guy, said: “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.

“People face severe consequences – like visits from bailiffs and eviction – when they can’t pay their bills. But 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.

“The government should also ensure that everyone has access to the support they need to adapt to Universal Credit”.

It risks pushing thousands of families into a spiral of debt - Gillian Guy

It follows a similar call last month made by leading Scottish disability and welfare charities.

They said they have all seen vulnerable people suffer due to significant flaws in the roll-out of the new system.

A Department for Work and Pensions spokesperson 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 UC people are moving into work faster and staying in work longer than under the previous system.”