Claimants forced to choose between heating or eating while waiting for benefits
3 min read
Baroness Sherlock questions if ministers understand the difficulties for claimants who face a six week wait without benefits.
In 2013 the government introduced a little-noticed change so that when someone claims benefit, they’re not entitled to any money for the first seven days. This affects millions of people but it is an extra problem for those claiming Universal Credit (UC), the new scheme with which government is slowly replacing the main means-tested benefits for people of working age. Because UC is paid monthly in arrears, people wait six weeks before they get any money. I wonder if the ministers who defend this arrangement really understand just how hard it is for most people to last six weeks without any money?
Research by the National Housing Federation found that typical social housing tenants have just £200 in savings. And if that’s the average, many will have little or nothing. No wonder a survey by the Citizens Advice Bureau (CAB) found many people struggling to manage until the first payment of UC.
Two thirds of those with a formal rent agreement reported difficulty paying their rent, gas and electricity. Clients told the CAB they were managing without heating or temporarily moving to relatives’ homes. Two thirds reported difficulty affording enough food and a number told of their shock at having to rely on food banks to survive. CAB advisers have reported higher levels of rent arrears amongst UC claimants, a point also made by organisations representing landlords. The NFA, which represents those who manage social housing for councils, reports that households are being forced to turn to food banks, payday lenders and even loan sharks.
The really astonishing thing is that six week wait isn’t just for those whose claims hit problems. It’s built into the system. When things go wrong, people can wait many months. Not even its biggest fan could claim that the introduction of UC has been trouble-free, not least since the rollout is six years behind schedule. Indeed, the man who probably is its biggest fan, the former Minister for Welfare Reform, Lord Freud, spoke to the Work and Pensions Select Committee last week. He acknowledged there were issues and said that the seven day waiting period should be scrapped, blaming it on the Treasury.
When I raised this issue in the Lords this week, the current Minister refused to accept there was a problem. Lord Henley said that the way UC is assessed and paid “is a fundamental part of its design, reducing welfare dependency by mirroring the world of work”. Hmm. How many people start a new job and are then told that they won’t be entitled to any wages for the first week?
Henley also said claimants could apply for loans or UC advances. But CAB found that well over half of people weren’t told about advance payments. If you don’t ask within three weeks of claiming, tough. And anyway the maximum advance is only half of the value of the UC claim, still forcing claimants to choose whether to eat or heat, pay rent or bills.
Ministers have had years to sort out these problems. But this delay isn’t an accident: it’s a feature, not a bug. UC is pushing people into debt and foodbanks by design and that really isn’t acceptable.
Baroness Sherlock is Labour’s Shadow Department of Work and Pensions Minister in the House of Lords.
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