Fixing Universal Credit
Citizens Advice LeicesterShire is calling on the government to pause the acceleration of Universal Credit and use the time to fix key problems, before thousands more people are brought into the system.
Unless these issues are addressed, these challenges will undermine the goals of Universal Credit: to simplify the benefits system and offer people the security and support they need to move into and progress in work.
This is a national campaign fronted by national Citizens Advice and supported by local branches across the country.
What is Universal Credit?
Universal Credit was introduced in 2013, aiming to simplify the benefits system. It’s for people on low incomes or not in work to help them meet their living costs.
Universal Credit is paid monthly, in arrears, as a single household payment. It replaces six means-tested benefits:
- Income-based Jobseeker’s Allowance (JSA)
- Income-based Employment Support Allowance (ESA)
- Housing benefit (HB)
- Income Support (IS)
- Child Tax Credits (CTC)
- Working Tax Credits (WTC)
It is designed to use Real Time Information from HMRC to respond to changes in income, gradually reducing payment as earnings increase, to ensure work pays.
When was it introduced?
Universal Credit is being rolled out gradually across the country, by Jobcentre area. Everywhere in the country now either operates a “live service” or “full service”.
‘Live’ service areas are places where a limited version of Universal Credit has been introduced for single adults not in work, to test the system. Everywhere in the UK now has ‘live’ service of Universal Credit.
In ‘full’ service areas, everyone with a new claim is required to claim Universal Credit.
From May 2016, full-service Universal Credit began to roll out in a small number of local authorities across the country. So far in Leicestershire, only parts of Harborough, Melton and Hinckley and Bosworth have full-service Universal Credit.
Full-service roll-out is due to accelerate significantly from October 2017 and all areas will eventually become full service by 2022. North West Leicestershire is due to introduce full-service Universal Credit in February 2018, with Blaby, Leicester city and Oadby and Wigston set to follow in March 2018.
Why is Universal Credit important?
So far, there are 467,000 people on Universal Credit in England and Wales, with around 48,000 new claims each month. By the time roll-out is fully complete, around 7.2 million families will receive Universal Credit, including 100,000 in Leicestershire.
As it stands, Universal Credit is putting people’s financial security at risk as they wait six weeks or more for their first payment. Many people are facing uncertainty about how much money they will receive and when it will arrive. This insecurity filters through to other areas of their lives, for instance making it harder to focus on finding work while they worry about how to keep on top of bills or put food on the table.
Many people have already turned to Citizens Advice for help with Universal Credit and numbers struggling will grow as more people move onto the benefit.
What are the problems with Universal Credit?
We are calling on the government to pause roll-out of Universal Credit in order to fix 3 significant problems:
- People are waiting up to 12 weeks for their first payment without any income
- Universal Credit is too complicated and people are struggling to use it
- People aren’t getting help when the system fails them
National Citizens Advice did a representative survey of 800 people who visited local Citizens Advice about Universla Credit in full-service areas. This data gives us some of the clearest insights into how Universal Credit is working and the problems people are having:
- More than 1 in 3 people are waiting more than 6 weeks to receive their first payment. 11% are waiting over 10 weeks.
- Over half of the people we’ve helped with Universal Credit borrowed money whilst waiting for the first payment.
- 40% people were not aware they could get an advance payment to help with the initial waiting period.
- 30% people have made 10 or more calls to the helpline to sort out their claim.
- Everyone claiming Universal Credit has to call the helpline to complete their claim. This costs up to 55p per minute.
- People on Universal Credit were one and a half times as likely to seek advice on debt issues compared to those on other benefits.
How can we fix Universal Credit?
1. Reduce how long people have to wait for their first payment:
- Make sure everyone moving on to Universal Credit is told they can get an Advance Payment.
- Remove the 7 waiting days at the start of a claim.
2. Improve the support available so that people can make ends meet
- Make the Universal Credit helpline free of charge, at least until roll-out is complete
- Introduce an online booking system for Jobcentre appointments to reduce calls to the helpline
- Offer everyone options in how the benefit is paid to allow people to adjust
- Put a comprehensive support package in place to make sure people can get advice to manage their money and deal with any complications with the application process
Here are a few of the ways you can help to fix Universal Credit:
- Be willing to speak to the media about your experience of an issue.
- Volunteer with us on research and campaigns work
- Write to your MP
Please get in touch if you are interested in helping the campaign to pause Universal Credit.