Universal Credit: MPs to debate rollout amid Labour pause call

18 Oct

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MPs are to debate the rollout of Universal Credit amid continuing calls for changes to the way the government’s flagship welfare programme is working.

Labour is calling for the system, which merges six benefits into one, to be paused amid concerns about how long claimants wait to get the cash.

Senior backbencher Frank Field said people were being “pushed towards destitution” on a growing scale.

But ministers insist it is “safe to proceed” following “rigorous” testing.

The government has said anyone in financial distress can apply for advance payments.

The BBC Newsnight’s political editor Nick Watt said he understood ministers were also giving “serious thought” to cutting the initial waiting period for payments from six to four weeks around the time of next month’s Budget.

Universal credit is a new single benefit for working-age people, replacing income support, income-based jobseeker’s allowance, income-related employment and support allowance, housing benefit, child tax credit and working tax credit.

It has been introduced in stages to different groups of claimants over the past four years, with about 590,000 people now receiving it through about 100 job centres.

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Earlier this month ministers approved a major extension of the programme to a further 45 job centres across the country, with another 50 to be added each month, despite concerns about its implementation and claims that it was causing real hardship for thousands of families.

Almost a quarter of all claimants have had to wait more than six weeks to receive their first payment in full because of errors and problems evidencing claims.


How does it work?

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The idea of universal credit is that no-one faces a situation where they would be better off claiming benefits than working.

There is no limit to the number of hours you can work per week if you get universal credit, but your payment reduces gradually as you earn more.

Under the old system many faced a “cliff edge”, where people on a low income would lose all their benefits at once as soon as they started working more than 16 hours. In the new system, benefit payments are reduced at a consistent rate as income and earnings increase.

A six-week wait is built into the system.

Because universal credit is based on how much money you have each month, it is paid in arrears – people claiming the benefit receive money for the last month worked, not for the month ahead.

That means everyone has to wait at least four weeks, and the rest of the time is because of the way the scheme is administered.


This has led to reports of growing numbers of people falling into rent arrears.

Last month it was reported that up to a dozen Conservative MPs wanted the rollout to be put on hold while, ahead of Wednesday’s debate, it is understood Prime Minister Theresa May met a group of MPs in Downing Street to discuss the way ahead.

Although the debate is largely symbolic – any vote that is held will not be binding on the government – it has been tabled by Labour to increase pressure on the government.

The Department for Work and Pensions says its latest data, from last month, indicates 81% of new claimants were paid in full and on time at the end of their first assessment while 89% received some payment.

Verification process

Cases of non-payment, it said, were due to claimants either not signing paperwork, not passing identity checks or facing “verification issues” such as providing details of their earnings, housing costs and childcare costs.

But Mr Field, an ex-welfare minister who chairs the Work and Pensions Committee, said he was urging ministers not to proceed any further and warning them if they did it would “explode politically”.

Large numbers of people in his Birkenhead constituency, he told the BBC, would “not have any money over Christmas” due to the six-week time lag.

“The government cannot honestly stand up and say this is working,” he told the BBC.

“We know from our constituents the consequences of that – a huge amount of destitution, horror at people who are reduced below what we would regard in this country as a minimum.”

The Department of Work and Pensions said the system was working and the majority of recipients were telling them they were comfortable about managing their finances.

“No-one who needs support should have to wait five or six weeks for their first payment. That’s why we have updated our guidance to make sure anyone who needs an advance payment can get one within five working days, and on the same day if in urgent need.”

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