Universal Credit Expansion Is 'A Disaster Waiting To Happen'

Citizens Advice is warning that the expansion of Universal Credit is 'a disaster waiting to happen', as new findings show it is pushing people further into debt. Citizens Advice analysed over 50,000 cases where it has helped people with their debt problems and found that for those on Universal Credit:

·         79% have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison - compared to (69%) on legacy benefits such as Jobseekers Allowance or Housing Benefit. 

·         2 in 5 (41%) have no money available to pay creditors as their monthly spend on essential living costs is more than their income.

·         Typically people on Universal Credit only have around £3 a month left to pay creditors.

Read more on the CAB website.

Hardship Payments Available Immediately To Homeless JSA Claimants

From October 2017, Jobseeker’s Allowance (JSA) claimants who are homeless will have immediate access to hardship payments if their benefit is reduced because of a sanction. Universal Credit claimants who are homeless and have received a sanction already have immediate access to hardship payments. However, JSA claimants currently have to wait two weeks. The regulations will cover eligible claimants who are homeless, suffering from a mental impairment, including a mental health condition, and their partners. People who are pregnant, lone parents, and people with long term physical health conditions can already access hardship payments immediately. Read more on Homeless Link.

Changes To Benefit Entitlements From April 2017

·         Employment and Support Allowance work-related activity group - Work Related Activity component is being abolished so those in this group will receive the same rate of benefit as those claiming Jobseeker’s Allowance

·         Families with children - support provided through Child Tax Credit will be limited to two children; Universal Credit will be limited to two children

·         New taper rate - a reduction in the taper rate to 63%, from 65%

·         Universal Credit and the benefit cap - From 1 April 2017 if a claimant is in work they will be exempt from the Benefit Cap if weekly earnings are equal to or greater than the equivalent of 16 times National Minimum/Living Wage rate, rather than a flat rate of £430 per month/£100 per week.

Read more on the NHF website.

IDS Defends Universal Credit Targets

Iain Duncan Smith has come under fire regarding the failure to meet universal credit targets in the House of Commons. When asked about the effectiveness of the roll-out of universal credit, Duncan Smith said it was on track: “Universal credit is now available in more than half of jobcentres across Great Britain and will be available in all jobcentres early next year. Nearly 175,000 people have made a claim for universal credit so far. Our evidence shows that the universal credit claimants find work quicker, stay in work longer and earn more than the jobseeker’s allowance claimants.” Kate Hollern, Labour MP for Blackburn, expressed her surprise at the answer and responded: “The targets that the Minister set last October have been dramatically missed. Will he now accept that universal credit is a failed and expensive policy?” Read more on 24dash.

Cost of Homelessness in Hackney Doubles

A Freedom of Information Act request from the Green Party has discovered that the cost of homelessness in Hackney has doubled since the 2010 general election. According to the figures, the cost of homelessness in 2009/10 was £3,092,255 compared to £7,167,440 in 2014/15. There was also a cut on staff spending in the same period, from £3,239,653 to £2,608,491. Since 2010, government policies have cut jobseekers allowance, housing benefits and increased sanctions for people receiving support. Read more on 24dash.

Government Cuts Mortgage Support

The amount of money struggling homeowners can claim to help them meet monthly mortgage repayments is to fall in July, after the government cut the interest rate used to make the calculations. Currently homeowners entitled to support for mortgage interest (SMI) can get help with monthly payments on a mortgage worth up to £200,000 based on an interest rate of 3.63%. But following a sharp fall in high-street mortgage rates, the rate will be reduced to 3.12%. SMI is a means-tested benefit that can be claimed by people receiving income-based jobseekers allowance, employment and support allowance and pension credit. It is designed to cover a borrower’s interest payments to their bank or building society, but not the original capital they borrowed. It is currently claimed by 161,000 people. Read more on the This is Money website.

Housing Benefit Cuts for Under-21s Would Be Disastrous

How will George Osborne cut £12bn from the welfare bill? It’s looking increasingly likely that plans to remove housing benefit from 18- to 21-year-olds who are unemployed and claiming Jobseeker’s Allowance will be form part of it. From more than four decades of experience supporting homeless young people, we know that the vast majority of young people who claim housing benefit do so as a lifeline at a time of crisis, not as a lifestyle choice. Among these young people are care leavers who have no home to return to and individuals who have fled domestic violence. Then there are those who have left home to find work and claim housing benefit to bridge the gap between their wages and ever-increasing rents. Read more on the Guardian website.

Concerns Raised Over Universal Credit Ban for EU Migrants

New EU migrants arriving in the UK will be prevented from claiming universal credit. The new regulations mean that no EU households will be entitled to benefits without having worked in the UK first. The DWP says the move follows action it has already taken to halve the amount of time EU jobseekers can claim other benefits such as jobseeker’s allowance, child benefit and child tax credit. It also means that if they don’t have a job after three months they will lose their right to reside in the UK. New migrant jobseekers are also now unable to claim housing benefit. Read more on 24dash.

Four In 10 Claimants Doubt Simplicity of Universal Credit

Four in ten universal credit claimants do not think the policy makes it easier to understand how to claim benefits, a government-commissioned study has said. The survey published by the DWP could damage ministers’ assertions that universal credit makes it simpler to claim welfare payments than under the old system. The study polled 478 universal credit claimants on whether the policy makes it ‘easier to understand what you are required to do’ when claiming benefits compared to jobseeker’s allowance (JSA).A total of 39% of respondents, who all formerly claimed JSA, said they either disagreed (22%), were neutral (14%) or did not know (3%). Sixty one per cent agreed. Download a copy of the survey from the DWP website.

Universal Credit Is Helping According To Duncan Smith

Iain Duncan Smith has defended his flagship Universal Credit scheme, insisting evidence shows it is helping people find work quicker and earn more. The Work and Pensions Secretary cited Government research suggesting that those receiving the benefit were 5% more likely to find employment within four months than comparable Jobseekers Allowance claimants. They spent an average of four days more in work during that period, earning around £50 more, according to the analysis. But Labour said Universal Credit - which starts being rolled out across the country on 16 February  - was massively behind schedule and saving far less than expected. Read more on the Huffington Post website.

Easement for Homeless Persons

Work Programme provider memo WP161 about a new easement for homeless persons. Briefly, it says that an amendment has been made to the regulations to help support homeless claimants on Jobseekers Allowance in finding sustainable living accommodation which will help to remove a barrier into employment.  The Regulations allow Jobcentre Plus to treat certain homeless claimants as meeting the jobseeking conditions for periods of longer than one week with no limit on the number of occasions on which it can be applied.  A claimant will not be required to attend the Work Programme for the duration of any easement. Download the memo from the GovUK website.

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.

Sanctions and Homelessness

The government has published statistics revealing the number of sanctions imposed on benefit claimants, but what do these statistics tell us and what is the impact on homeless people?  The number of people being sanctioned during the first three quarters of 2013 rose steadily. Although numbers dipped slightly in Q4 2013, figures were still 7% higher amongst Jobseeker’s Allowance (JSA) claimants than Q4 2012. The most notable increase has been amongst Employment Support Allowance claimants, which was 188% higher in Q4 2013 compared to Q4 2012. These figures show that sanctions are affecting a growing number of claimants. This is particularly concerning for homeless people, as research has shown that they are more likely to be sanctioned than the general population. Read more on the Homeless Link website.

DWP: Housing Benefit Will Be Sanctioned

Part-time workers judged to be doing too little to find full-time work face having their benefit for housing costs sanctioned by the government for the first time under universal credit. Under the present system housing benefit is paid direct to landlords and sanctions can only be applied to out-of-work benefits. Landlords have been lobbying the government to exempt the housing element of the single payment from sanctions in all circumstances. However, the DWP has confirmed that under universal credit, where a tenant is working less than 35 hours a week at minimum wage and is not eligible for JSA or ESA, the housing element can be sanctioned instead. Read more on Inside Housing.

‘Unintended’ Housing Benefit Cuts Hit Tenants

Councils are cutting off housing benefit payments to tenants who are entitled to receive them, as an unintended consequence of sanctions applied to other benefits. Jobseeker’s allowance and employment support allowance claimants can have sanctions applied to their claims if they miss appointments or fail to do enough to find work. But many are also having their housing benefit cut, because they are unaware that they need to tell councils their financial circumstances have changed. Local authorities are stopping claims as a result. Charities warn they are dealing with a rising number of housing benefit problems as the number of JSA and ESA sanctions soar - because many recipients don’t realise the reductions could affect their claim. Read more on Inside Housing.

Universal Credit – Parliamentary Oral Answer

Steve Rotheram (Liverpool, Walton) (Lab): What his most recent estimate is of the number of people who will be claiming universal credit by April 2014.

Mr Iain Duncan Smith: Based on caseload projections, we expect more than 6,000 claimants from the pathfinders to be on universal credit in January. Beyond the pathfinder scheme and in the live running of universal credit, we are also rolling out other components, such as the claimant commitment. Jobcentre Plus advisers have agreed around 120,000 JSA claimant commitments, rising by some 30,000 each week. That continues our progressive approach to date, enabling a safe and successful delivery.

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).

Labour: We'll Scrap Benefits for Under 25s

People under the age of 25 would be barred from claiming unemployment benefits under proposals being considered by the Labour Party. The Institute for Public Policy Research will publish a paper later this week proposing a new means-tested “youth allowance” for 18 to 24-year olds who are not in work or education. Only those who prove they are in “purposeful” training or carrying out an “intensive” job search would be eligible for the allowance, the group will say. The allowance would be dependent on family income, with the children of parents earning more than £25,000 a year unable to claim it, the IPPR will suggest. The youth allowance would be set at £56.80, the same level as Job Seekers’ Allowance. Read more on the Daily Telegraph website.

Campaigners Voice Outrage at DWP’s Regime of Destitution

The DWP is operating a draconian sanctions regime that often penalises claimants for the department’s own mistakes, leaving people at risk of severe hardship and even homelessness, claims the charity Crisis. The charity spoke out against the DWP’s sanctions regime after the department released new figures on the number of sanctions imposed on those claiming Job Seekers Allowance (JSA) and Employment and Support Allowance (ESA). Crisis made its claims with the publication of new report, ‘Dashed Hopes, Lives on Hold’, which has gathered the experiences of the charity’s clients placed on the Work Programme. It claims that many of the sanctions imposed were “unfair” or made in error.  Download a copy of the report from the Crisis website.

Housing Benefit – Parliamentary Written Answer

Stephen Timms: To ask the Secretary of State for Work and Pensions what the consequence is for entitlement to housing benefit when a claimant loses jobseeker's allowance for a period as a result of a sanction. 

Steve Webb: Housing benefit would be unaffected as long as entitlement to the sanctioned income-based jobseeker's allowance remains. Where a sanction results in cessation of entitlement to the sanctioned benefit (that is, in this case either income-based or contributory-based jobseeker's allowance), housing benefit would need to be reassessed. Additionally, regulations exist which allow sanctions to be applied to benefit payability. These provisions can affect the amount of housing benefit payable, but not where a Two Strike sanction has been applied to income-based jobseeker's allowance. Further details are at paragraphs 6.230 onwards of the Housing Benefit Guidance Manual: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236955/hbgm-a6-deciding-and-paying-benefit.pdf