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Citizens Advice calls for Universal Credit ‘pause’

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A charity has called for a suspension in the expansion of a major benefit reform because it says families risk being pushed into a spiral of debt.

Citizens Advice said those under the Universal Credit system were more likely to struggle with priority debts.

But the government said the system offered extra support and that budgeting and financial help was available.

Universal Credit merges six existing benefits into one.

These include tax credits, housing benefit, income support, Jobseeker’s Allowance, and employment and support allowance. By 2022, more than seven million households will receive Universal Credit – at least half of which will be in work.

A major rollout of the scheme begins soon, following a series of delays. The system was originally scheduled to be fully in place this year.

Citizens Advice analysed 52,075 cases that it had seen, and concluded that those on Universal Credit would, on average, appear to have fewer than £4 per month left to pay all their creditors after they had paid essential living costs.

This compared with £16.25 per month for people in receipt of the individual benefits under the old system.

‘Stubborn approach’

A six-week wait for an initial payment, processing delays, and budgeting difficulties were suggested as the key causes of difficulty for those on Universal Credit, it said.

“The roll-out of Universal Credit is a disaster waiting to happen,” said Citizens Advice chief executive Gillian Guy.

“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.

“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.”

A Department for Work and Pensions spokesman, who pointed out that the Citizens Advice research was based on those with debts, not benefits claimants as a whole, 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 Universal Credit people are moving into work faster and staying in work longer than under the previous system.

“The vast majority of claimants are comfortable managing their money, and for anyone who needs extra help, we have budgeting advice and benefit advances.”

2017-09-11 18:04:08

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