I’ve had a worried correspondence about Universal Credit. This has not been informed by experience: the benefit has not yet been implemented in the New Forest; rather, it is based on the hysterical ‘shroud waving’ of politicians and commentators.
Many of my correspondents ask for implementation to be paused until problems are ironed out. This is unnecessary because we learnt from the experience of Working Tax Credit which was introduced as a ‘big bang’ in 2003 -with truly disastrous consequences. For this reason the roll-out of Universal Credit is deliberately very slow. It will not be complete until 2022 and currently only 10% of eligible claimants are on it. The process is designed to identify and remedy difficulties as the implementation proceeds.
Universal Credit replaces 6 benefits, each of which have their own problems and disadvantages. To compare Universal Credit with some previous ideal state is ridiculous. No benefit can be perfect and without anomaly. A benefit has to address the needs of the community as a whole, by encouraging claimants to seek work, and also be effective in the very diverse circumstances of individual claimants who have different attitudes and needs.
Universal Credit addresses many of the limitations of the ‘legacy’ benefits that it replaces.
It removes the discouragement to work more than 16 hours per week that is built into Jobseeker’s Allowance.
It removes the cruel choice between financial support and work which is a feature of Employment Support Allowance -when most claimants really need a bit of both.
It addresses the disadvantage of Working Tax Credit where, once claimants are in work, there is a disincentive to increase their working hours because they lose 70 pence of every additional £1 that they earn.
The results speak for themselves: Claimants on Universal Credit find work quicker and remain in work longer.
The principal complaint has been that there is six week wait and that people are left to go hungry and their rent arrears to build up. This is just not true: Claimants can get an advance that very same day if necessary.
Most benefits have ‘waiting days’ before which the benefit does not start to accrue. This is to discourage very short term claims when people are between jobs. There were six waiting days for Universal Credit but the Chancellor has now abolished them in his budget last week.
There is a calendar month in which the evidence of the claimant’s circumstances is collected and the amount to which they are entitled is calculated. Then, there can be up to a further week for the payment to reach the claimant’s bank account.
Remember, the purpose of the benefit is to prepare claimants for the world of work: and three quarters of workers are paid monthly in arrears. So, encouraging claimants to budget over a similar period is a good discipline.
For those claimants who need money right away, a same day interest free advance can be had. This was repayable over 6 months, but the Chancellor has now extended it to a full year.
As for the allegation that rent arrears are building up as a consequence of Universal Credit, actually the reverse is true: many claimants arrive with rent arrears and, after four months on Universal Credit, these have on average fallen by a third.
Nothing is ever as bad as reported.