Charity says flaws in new benefit are pushing families into crisis
Citizens Advice Scotland has called for a halt to the accelerated roll-out of Universal Credit, publishing new figures which show the system risks leaving thousands of Scots in poverty and debt.
The umbrella body for Citizens Advice Bureaux in Scotland says the roll-out should be paused until significant issues with the system are addressed.
Universal Credit aims to replace six existing benefits with one single payment, making access to social security payments less complicated and to support people into work. It has been rolled out initially in parts of Scotland and is due to be introduced in full across the country by the end of 2018, starting in October this year.
However, evidence from Citizens Advice Bureaux in initial roll-out areas has shown that the reality of Universal Credit risks leaving many Scots without the support they need, pushing them into debt and leaving them unable to make ends meet. The long wait for payments (six weeks) at the beginning of the Universal Claim process is a particular cause of problems, and many are finding the system very complicated, making it harder to focus on getting into work.
CAB evidence in initial roll out areas shows that since Universal Credit was introduced bureaux have seen:
- A 15% rise in rent arrears issues compared to a national decrease of 2%
- A 87% increase in Crisis Grant issues compared to a national increase of 9%
- Two of five bureaux in impacted areas have seen a 40% and a 70% increase in advice about access to food banks advice, compared to a national increase of 3%
It is projected that when full service rollout is complete in 2022, there will be 652,500 households in Scotland claiming Universal Credit*.
CAS Chair Rory Mair CBE says:
"We have always supported the principles behind Universal Credit. We firmly believe that simplifying access to benefits for those who need them is critical. However, we have been monitoring the impact of Universal Credit closely, and we are very concerned.
"Citizens Advice Bureaux are uniquely placed to see how changes like this affect people, and in all of the initial rollout areas the evidence is clear: Universal Credit has major delivery and design flaws which risk hurting families instead of helping them. These include long waits for payments that push people into crisis and debt, all while battling a highly complicated process with little support.
"For too many people, a system that is intended to support them through difficult times is making their situation much worse. Families are falling into debt and rent arrears and having to turn to foodbanks just to survive. These issues simply must be addressed before anyone else is affected. The government needs to do more to reduce how long people have to wait for payments and to improve the support available.
"So we are today calling for a pause in the accelerated roll-out of Universal Credit, so that these problems can be fixed before more families find themselves in crisis."
*Projection created using national patterns of benefit claims from Family Resources Survey 2014-15 and constituency level administrative data from the DWP and HMRC from August 2015. Produced July 2017.
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Appendix 1: Universal Credit background
Universal Credit is the most ambitious change to the social security system since its establishment. It is intended to be an integrated benefit for people both in and out of work. It brings together a range of working-age benefits into a single payment. The aims of Universal Credit are to:
- encourage people on benefits to start paid work or increase their hours by making sure work pays
- make it easier for people to manage the move into work
- simplify the system, making it easier for people to understand, and easier and cheaper for the government to administer
- reduce the number of people who are in work but still living in poverty
- reduce fraud and error
Universal Credit is intended to replace six existing benefits:
- Jobseeker’s Allowance (JSA)
- for people who are unemployed and looking for work
- Employment and Support Allowance (ESA)
- for people who are not able to work due to ill-health or disability.
- Housing Benefit (HB)
- to help pay rent for people who are on a low income (e.g. because they are out of work or in a low-paying job).
- Income Support (IS)
- for people who cannot work because they care for someone else (e.g. young children or an elderly or disabled relative)
- Working Tax Credit (WTC)
- is for families who work but have a low income.
- Child Tax Credit (CTC)
- is for families with low incomes and children to support.
Universal Credit also brings a number of different features from these existing benefits. It is intended to be claimed and managed online, without paper forms. A ‘claimant commitment’, setting out expectations and mandatory requirements was introduced for people who receive it. And a number of other features represent a change from the current approach, including monthly payments, payments to a household rather than individuals, and making housing payments to recipients rather than directly to landlords.
Delivering a benefit that will eventually be received by over 800,000 people in Scotland and up to eight million people across the UK is no minor reform. It will eventually encompass people at a wide range of different points of their lives and in different circumstances – in work, out of work, in sickness and in health, when single, with children, and in a range of situations where they are vulnerable and in need of financial support.
Initial rollout areas
In a few Local Authorities, Universal Credit ‘Full Service’ has been introduced, which means that all those eligible can make a claim. East Lothian was the first Local Authority to go live in March 2016, followed by Inverness at the end of June 2016. At the time of writing, there are only seven ‘Full Service’ areas across Scotland, namely: East Lothian, Inverness, East Dunbartonshire, Inverclyde, Midlothian, Clackmannanshire and Stirling, but the rollout continues throughout 2017, with significant expansion in October, and with all Local Authorities expected to be live by the end of 2018.