Universal Credit 5-week wait ‘makes debts worse’ as 4 in 5 have first payment docked
THE five-week wait for Universal Credit “makes debt worse” and 4 in 5 claimants get first payment docked, a damning report has found.
The report by the National Audit Office found the wait time was “exacerbating” financial woes by forcing people to take on more debt and then have their first payment cut to make up for it.
The five week wait makes debt worse, according to a new report[/caption]
The National Audit Office said the wait tile “can exacerbate claimant’s debt and financial difficulties” and hit those households already struggling to make ends meet.
According to the report 80 per cent of low-income households have “deductions” from their benefits of up to 30 per cent when their first payment does come because of taking out debts to cover the wait time.
This is compared to 61 per cent of all households.
The Sun launched the Make Universal Credit Work campaign to slash wait times for first payments so people aren’t forced to sell their belongings or take out loans to survive – and to make it easier for people to get back to work.
According to research by the Department for Work and Pensions rent arrears “increase more rapidly” after a claim for the benefit – sending households further into debt.
Think-tank Resolution Foundation found many people struggling to get by during lockdown did not take advance payments while waiting for the first Universal Credit cheque over fears of being saddled with more debt.
The wait time for the first payment often stretched far beyond the estimated five-week-wait time – at least 6 per cent of households in 2019 – or 105,000 new claims – were forced to wait 11 weeks or more the full payment.
Experts have warned the wait time can push people into “severe hardship” and even cause them to feel suicidal.
But the NAO did find the DWP had “significantly” improved the proportion of claims paid on time, from 55 per cent in January 2017 to 90 per cent in February 2020.
The Sun wants to Make Universal Credit Work
UNIVERSAL Credit replaces six benefits with a single monthly payment.
One million people are already receiving it and by the time the system is fully rolled out in 2023, nearly 7million will be on it.
But there are big problems with the flagship new system – it takes five weeks to get the first payment and it could leave some families worse off by thousands of pounds a year.
And while working families can claim back up to 85 per cent of their childcare costs, they must find the money to pay for childcare upfront – we’ve heard of families waiting up to 6 months for the money.
Working parents across the country told us they’ve been unable to take on more hours – or have even turned down better paid jobs or more hours because of the amount they get their benefits cut.
It’s time to Make Universal Credit work. We want the Government to:
- Get paid faster: The Government must slash the time Brits wait for their first Universal Credit payments from five to two weeks, helping stop 7million from being pushed into debt.
- Keep more of what you earn:The work allowance should be increased and the taper rate should be slashed from from 63p to 50p, helping at least 4million families.
- Don’t get punished for having a family: Parents should get the 85 per cent of the money they can claim for childcare upfront instead of being paid in arrears.
Together, these changes will help Make Universal Credit Work.
Join our Universal Credit Facebook group or email UniversalCredit@the-sun.co.uk to share your story.
In 2019, 312,000 people still had their first payments made late – up from 113,000 in 2017 – because of the overall number of claimants rising.
The report did not cover the period during the coronavirus pandemic where the number of people claiming Universal Credit hit 3.2 million, according to the Office for National Statistics.
But the number of people paid late rose from 113,000 in 2017 to 312,000 in 2019, due to the overall number of claimants rising.
DWP chiefs were armed with an extra £895million to use to double the number of work coaches to 27,000 over fears of mass unemployment because of the lockdown.
Mums left unable to put food on the table
Demi said: “They give you an advanced loan which you have to pay back, but it only gets you even further in debt.
“I went out to work in care in the community for 16 hours a week, which they said would be fine, but it messed everything up.”
When she’s not working she looks after her nephew, who as learning difficulties, Asperger syndrome and ADHD, and needs constant care and support.
The family almost got evicted when they first moved onto the new system because the rent wasn’t paid directly to their landlord and came through weeks late.
“Not only was I in debt with the £100 advanced payment but it messed my rent up and reduced my payments to the point where I’m struggling to put food on the table,” she said.
“I feel like we can’t afford Christmas.
“We’ve got just about enough for food on the table and a roof over our heads, which we just have to be thankful for.
“I can understand why people in this situation get depressed and take their own lives, I really can, because they do not explain any of this to you.
“All I want to know is how many hours I should work. Now they say I should be working more than 16 hours, but how can I when I’m looking after my nephew as well?”
Iain of the Joseph Rowntree Foundation said the five-week wait should have been ditched long before the coronavirus pandemic.
He said: “There was nothing compassionate or just about this policy prior to the pandemic.
“As the levels of unemployment grow, we urgently need to get support to people when they need it.”
In the last week, thousands of jobs have been lost as high street shops have announced cuts to stores.
A DWP spokesman said: “Universal Credit is delivering in these unprecedented times, with more than 2.5 million new claims processed since mid-March and over one million advances paid to those in urgent need within days.
“Nobody has to wait five weeks for payment.
“As the report shows, significant improvement has been made in the proportion of Universal Credit claimants receiving their first payment on time and in full, currently around 90%.
“We’ve also increased the standard allowance by up to £1,040 a year, as part of a package of welfare measures worth over £6.5 billion to support the most vulnerable.”
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