New DWP Proposal Will Trap People in Their Homes, and in Debt.

New DWP proposals to protect landlords’ rental incomes are in danger of trapping people in their homes, creating a modern day version of a debtor’s prison.  Last year Lord Freud committed to protecting landlords’ rental incomes under Universal Credit by proposing that tenants in rent arrears have 40% of their core benefits deducted until rent arrears are cleared – that’s 40% taken from JSA, Income Support or  Standard Allowance under Universal Credit. DWP have not put forward a rationale for the 40% rate. But the 40% rate should definitely ring a bell, because it’s the same punishing rate people are sanctioned by if Jobcentre Plus decide they aren’t trying hard enough to get a job. So is it the case that people in rent arrears simply aren’t trying hard enough to pay their rent? Read more on the Shelter website.

Universal Credit – Parliamentary Written Answer

Rachel Reeves: To ask the Secretary of State for Work and Pensions pursuant to his written statement of 5 December 2013, Official Report, columns 65-6WS, on universal credit, what budget he has allocated to the new digital service for universal credit. 

Esther McVey: Costs for the future development of the digital service remain subject to on-going commercial discussions.

Rachel Reeves: To ask the Secretary of State for Work and Pensions how much has been spent on the existing universal credit pathfinder sites. 

Esther McVey: The most recent estimate of the cost of existing universal credit pathfinder sites is set out in the NAO report Universal Credit: Early progress, HC 621, published on 5 September 2013.

Rachel Reeves: To ask the Secretary of State for Work and Pensions how much the freezing of universal credit work allowances will save.

Esther McVey: Disregards in existing income based benefits are generally not uprated year on year. The £5 earnings disregard in Income Support has been at this level for at least 25 years. In universal credit, new work allowances will improve financial work incentives for many people. For example, in 2018-19, the work allowance for a single person over 25, without children, is projected to be £25.60 per week as compared to the current JSA disregard of £5 per week (2013-14 prices). The work allowance rates will be fixed for the first three years, to uprate them by 1% for those three years would lead to an additional cost in the region of £300 million in 2018-19 (2013-14 prices).

Does Universal Credit Make Work Pay?

The political language of “making work pay” has barely changed since the early 1980s. Yet the realities have changed a lot. Billions poured into tax credits have helped improve returns for going out to work, as has a long-term decline in Income Support rates. Tax credits have helped make work so worthwhile that in the recent recession, there was almost no rise in the number of families without anyone in paid work, unlike in previous recessions. And Universal Credit will go further by removing any hours rules, so that even people working just a few hours a week will be better off than not working. But this help has shifted the work incentive problem. Since in-work support disappears as you earn more, many families with low wages and high childcare costs now find that they are little or no better off working five days a week than working one or two days.  Read more on the Social Policy blog.