Chelsea Leonard (Student)
The principle of universal credit was introduced by the conservative government, in 2010. It was intended to simplify the benefit system, merging all benefits into one. These include income support, income-based jobseeker’s allowance, income-related employment and support allowance, housing benefit, child tax credit, and working tax credit.
Despite the intentions, universal credit has been controversial from the time it was introduced; there have also been concerns over how long new claimants must wait before receiving their first benefit.
There have been many reports of claimants having to wait at least five weeks for the payments to start, consequently people are falling into debt and having to resort to food banks. Some claimants have had to get an advance on their first instalment of the benefit; but this is treated as a loan, so subsequent payments are reduced to pay off the advance.
The new system was meant to be slowly introduced and claimants were expected to report any changes of circumstance and therefore be transferred to the new benefit. Officials say not enough people are moving to the benefit as they are “scared” about falling into debt. The system was meant to be fully live by April 2017, but the new delay will push it back to September 2024.
A BBC news team have recorded a series titled ‘Universal Credit: Inside the Welfare State’; the program shows a mother struggling to feed her family on just over £500 for a month, because of deductions made to pay off the advance she had to take out during the five-week wait.
Paula, like many others, has had to resort to a food bank, telling the debt counsellor “I have just got myself into one big mess and I have lost control over everything’, “I am in debt up to my eyeballs and it’s not going to go away.”
The counsellor tells her: “If you don’t have money saved up already or you don’t have backup of family who can support you, you will fall into taking an advance payment.” She added that benefit deductions to pay off the advance, leave people “constantly trying to catch up”.
Neil Couling, the senior civil servant in charge of the rollout of ‘universal credit’ expressed his concern about the small amount of people transferring to the new benefit system. He said “It’s a potentially serious issue for us, in terms of completing the project by December 2023, but I’m urging people not to panic.” However, in September 2019 he decided to delay full rollout of the new system until September 2024.This extension has added an extra £500 million on the bill.
Margaret Greenwood, Labour’s shadow work and pensions secretary, has called for the new system to be scrapped calling the news ‘hugely embarrassing” for the government.
Despite these problems, Mr. Couling still believes that once universal credit is fully implemented it will be successful. “I have to keep going to the destination or you have to set me a different destination, because there’s 2.6 million people, and if we get something wrong, we could disrupt their lives and they’ve got no alternative. There’s no alternative bank they can go to get help. We are the payer of last resort.”
Staffordshire University Legal Advice Clinic (SULAC) offers free legal advice on all financial matters such as debt, and employment to members of the public. SULAC is currently offering appointments at Stoke County Court and Various locations around Stafford including Signpost Centre and House of Bread. For more information, or to book an appointment please contact: SULAC@staffs.ac.uk or call on 01782 294800.