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The problems with Universal Credit

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Universal Credit has been at the centre of discussions in Westminster for several weeks now. I thought some local residents may appreciate an outline of the issue.

Universal Credit is set to replace a wide range of benefits. Housing Benefit, Child Tax Credit, Income support, Working Tax Credit, Income-based Jobseeker’s Allowance and Income-related Employment and Support Allowance will all merge together into a single system.

Since 2013 the Government have moved small groups of people onto the new benefit in order to test it. Around 8% of claimants are now on Universal Credit.

 

Why is this news now?

The rollout has been very slow so far but starting this month the scheme will be accelerated. More and more people will be moved on to Universal Credit. Here in Bolton all new claims will be directed to Universal Credit by July 2018.

Labour are trying to stop this rapid rollout, because there are huge problems with the system as it is. Many people are being driven into debt by the slow and complicated process.

If you lose your job or your circumstances change suddenly you’d expect support to be on hand until you get back on your feet, it’s what we pay our taxes for. Universal Credit has some Bolton residents waiting three months for their first payment, leaving them facing rent arrears or taking on debt just to make ends meet. Even when the system works as designed you can expect a 6 week wait.

I’ve helped several constituents challenge the DWP over minor errors that have taken months to rectify, causing financial difficulty and unnecessary stress.

I wrote to the Secretary of State for Work and Pensions last month to outline my concerns and ask for the rollout to be paused while the Government looks into the problems.

Labour have also forced several debates on this in Parliament and there is a clear consensus in the House of Commons that this scheme is flawed. However the Government continue to press ahead.

I doubt this is going to die down any time soon, and I will continue to press the Government for action. Nobody should be pushed into debt or poverty by the very system that’s supposed to help them.

 

Bolton Citizens Advice have kindly provided some information about Bolton resident’s experiences of Universal Credit.

More than 1 in 3 people we’ve helped on Universal Credit are waiting more than 6 weeks to receive any income. 11% are waiting over 10 weeks.

30% of people we’ve helped 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. (The Government have now agreed to make this free - David)

Over half of the people we’ve helped who receive Universal Credit borrowed money whilst waiting for their first payment.

The people we see on Universal Credit are nearly one and a half times as likely to seek advice on debt issues compared to those on other benefits.

Case study:

Samantha turned to Citizens Advice Bolton for help when she found that her Universal Credit took 10 weeks to be paid. As a single parent with three young children, Samantha had left her partner for her children’s safety, only to find herself with just £48.10 child benefit a week to live on.

Trying to rebuild her life Samantha had tried to apply for Income Support to be told that she needed to apply for Universal Credit instead. During 10 weeks of anguish and hardship, Samantha had to rely upon her elderly parents to provide money for food to avoid turning to a foodbank. Samantha fell into serious rent arrears and had to constantly try and hold off her landlord from taking legal action against her.

Samantha’s Universal Credit was eventually paid and backdated. At this stage she experienced problem number two. Her Universal Credit payment was £232 per month short and she needed Citizens Advice Bolton to help her get the shortfall of nearly £500 that she was entitled to.

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