Will the pandemic help us to get a grip of Universal Credit?

Will the pandemic help us to get a grip of Universal Credit?

Will the pandemic help us to get a grip of Universal Credit?

Nearly a million people awarded UC over just 2 short weeks

It’s hard to believe that nearly a million successfully applied for Universal Credit in the two weeks between 16th and 31st March alone. Coronavirus has triggered a rise of more than 500%, from 60,000 to 371,000 claims a week. The surge in applications dwarfs the impact on the benefit system during the last recession triggered by the 2008 financial crisis. It’s hard to avoid using that over-used word we’re hearing at the moment ‘unprecedented’;  we really have never seen anything like this before!

As a result of this hike in numbers, DWP had no option other than to make the Universal Credit application process easier, with appointments over the phone and a less stringent application process where people are (understandably) not having to attend work-focused interviews with a nominated work coach at the job centre. This change has – temporarily at least – made it less complicated to apply for UC for applicants facing barriers to access (you have to ask yourself why it couldn’t have been made a bit simpler before now) …

The UC claim system has been simplified but still far from simple

 But last week’s statistics published by the Citizens Advice network tell us that the network of charities delivering the Citizens Advice service helped 90,000 people with their UC claims since lockdown started on the 23rd of March. So the process may have been simplified but it’s still definitely not simple. Ok maybe it should never be really easy – the right checks and balances must be put in place when it comes to accessing benefits, but at the moment the system is still really problematic.  So let’s cast our minds forward. What happens when we revert back to the pre-pandemic claim process with more people now losing their jobs through sectors like the hospitality  industry not being able to carry staff financially through the crisis?

We’re in trouble.

Food banks in the Trussell Trust’s network are reporting their busiest time ever, with an 89% increase in emergency food parcels given to people across the UK in April 2020 compared to the same period in 2019.

As the impact of coronavirus continues to unfold, a lot of people facing financial difficulties will be waiting for their first payment of Universal Credit for 5 weeks, and will already have taken the ‘advance payment’ which will cover bills and essentials temporarily. But it’s also recognised that, before the pandemic struck, in every area Universal Credit has been rolled out, food bank usage figures have shown a rise up to to 48%.

UC claimants too often end up in debt

We also need to be aware of the worrying issue of debt for Universal Credit claimants. A recent survey showed that 70% of people fell into debt during the 5 weeks wait for their first payment. Step Change said that since the beginning of lockdown in late March, as many as 1.2 million people had fallen behind on utility bill payments, 820,000 people on council tax, and 590,000 on rent. They also estimated that 4.2 million people had borrowed to make ends meet, mostly by using a credit card, overdraft or a high-cost product such as a payday loan.

People clearly need more financial support whilst they are waiting for their first payment. This is an issue that is going to continue to get worse as more people are losing their jobs and having to claim Universal Credit.

Radical change needed in housing and homelessness for UC claimants 

If we look at the Housing situation in context of the Coronavirus, we have seen some positive measures brought in by the Government. The Eviction ban has just been extended for a further two months and there was a huge drive (the biggest since the second world war) to get the homeless of the streets during the peak of the pandemic.

Many ‘street’ homeless are now on Universal Credit for the first time and are being supported by DWP staff and given the Job Centre as a ‘care of address’ so they can overcome the barrier of not being able to claim the benefit because they aren’t able to provide a permanent address. Again, this is very positive, but this needs to be upheld as restrictions are lifted.

Surely it is morally wrong to protect people and give them accommodation because of the pandemic, but then turf them back onto the streets once it is over?

Let’s hope that doesn’t happen. Local housing authorities face a huge task, and will undoubtedly need support from the Government, charities and the community and voluntary sector to get this right – we need to work together and be absolutely determined to make sure people don’t fall through the cracks at all costs.

This is going to be a challenge. Housing is already a big issue when it comes to Universal Credit.  The Trussell Trust found that housing was the primary problem for 56% of claimants, citing the 5 weeks wait as the reason because people were pushed into rent arrears with either a private or social landlord, making it difficult then to recover. People on Universal Credit have also said they have found themselves being discriminated against by landlords who have lost confidence in the benefit due to late payment of rent or arrears due to complications with Universal Credit. If you’ve looked at local houses for rent adverts recently you’ll see they’re still proclaiming no DSS! This is a vicious circle.

If we’re to get a grip of Universal Credit there’s a lot to do

Coronavirus and lockdown has really made a bad situation significantly worse. More people are now claiming Universal Credit, and have just had to adapt. 

However, now we have an opportunity to get it right and this is our call to the Government and DWP. There’s a lot to say, but if we were only able to make one challenge, it would be:

Please accept that the 5 week wait is simply too long.

Society Matters cic is doing its bit to make its mark, and thousands of charities working hard on the front line are saying the same thing. Let’s stop people losing their homes, getting into debt, reaching crisis point, for the sake of a system that can be changed. Social welfare matters. Society matters. Let’s call to Government to invest what has been learned through the pandemic to get a grip of Universal Credit once and for all.

This window of opportunity may never arise again.

Adam Matthews, Social Welfare Instructor at Society Matters cic

We’d like to know what you think. Please post a comment below.

Mythbusting facts about Universal Credit

Mythbusting facts about Universal Credit

Mythbusting facts you might want to share about Universal Credit

When we’re delivering our Get to Grips with Universal Credit training course we’re often surprised by some of the misconceptions that exist about Universal Credit, leading to misinformation being passed on to the people who need the true facts the most.

So we’ve put together 4 mythbusters that you might want to share about Universal Credit, drawn  from the most regular misunderstandings we have come across so far.

 

1. You can be eligible to receive the Carers element of UC even if you work full time.

It doesn’t matter how many hours a week you are working. You can be eligible to receive the Carers element of Universal Credit as long as you care for/support someone for at least 35 hours a week. The benefit is designed to take into account individual situations  So, for example, if your client works 5 days a week for 7 hours each day but they also look after an elderly relative before and after work for 4.5 hours total a day, then spend 6 hours each Saturday and 7 on Sunday they can claim UC.

 

2. You do have flexibility about how UC is paid to the household

UC is usually paid as one household payment, but you can ask for payments to be split even if for couples, if:

  • it’s in your interest, for example because one of you has trouble managing money and it’s causing financial problems;
  • it’s in the interest of a child you’re responsible for;
  • you get an amount in your Universal Credit because you care for a severely disabled person and it’s helpful for them to get paid like this.

If you are having problems managing your payments you can also ask for an alternative payment arrangement where, for example, housing costs are paid direct to your landlord or you can be paid more frequently eg fortnightly.  

 

3. Some people are better off on Universal Credit than legacy benefits

There is a genuine fear for most people who are transitioning from legacy benefits to Universal Credit, however some people are actually better off on UC.  The tapering of earnings as UC reduces is better for some people than when they were on legacy benefits. 

If a claimant worked over 16 hours they would have lost all entitlement to means tested benefits that are being replaced by UC, such as JSA & IS. However, with UC, for every pound earned UC is reduced by £0.63p, which is a more generous tapering. If this is then added to a claimant having a work allowance included in their claim (money that can be earned prior to the means test being applied) it can increase income and result in retention of benefit entitlement for a longer period.

Here’s a working example offered by Citizens Advice:

Zoe earns £900 a month. Without a work allowance her whole income reduces her Universal Credit by 63p for each £1 she earns. This would reduce her Universal Credit by 900 x 63p = £567. She looks after her young child, and doesn’t get the Universal Credit housing element. This means she gets a work allowance of £503. The work allowance means £503 of Zoe’s income is ignored, leaving £397 that will reduce her Universal Credit payment. This means her payment is reduced by 397 x 63p = £250.11.

  

4. You don’t have to make a UC claim digitally

 The Government has made it clear that digital claims are very much the norm, however there is still provision to manage a claim non-digitally in special circumstances – a claim can be made by phone  or, in exceptional circumstances, through someone making a home visit.

The circumstances when non-digital claims may be permitted include:

  • lack of regular access to the internet;
  • lack of confidence using a computer or smartphone or having a physical condition that prevents it;
  • having problems with sight;
  • having a long term physical disability or mental health condition which prevents an online application;
  • having difficulties with reading or writing

Check out our other articles about Universal Credit to find out more, and if you’re new to Universal Credit you can watch our Introduction to Universal Credit video.