The new benefit works for many but fixes are needed so everyone is paid on time
Universal Credit has been back in the news over the past couple of weeks, after the National Audit Office highlighted a number of delivery challenges with the system.
These challenges were inevitable — Universal Credit is the biggest change ever to the welfare system and affects around 7 million people. The real test for the government is whether they’re willing and able to act on emerging evidence, and make the necessary improvements so it works for everyone.
We support the principles of Universal Credit. From our experience of advising hundreds of thousands of people about the previous benefits system each year, we recognise the need to simplify the system.
But it’s clear more needs to be done to make sure Universal Credit works for everyone. We’re encouraged the Work and Pensions Secretary, Esther McVey, has already made changes — and indicated last week she’s willing to make more. But with the rollout accelerating, changes need to happen more quickly.
While the system is working well for many people, a significant minority — often those most in need of support — are having trouble making their claim and don’t get enough help when they need it.
The application process requires people to take a number of steps, including providing evidence of housing and childcare costs before they can receive their first full payment.
However, over a third of the clients we help with Universal Credit struggle to provide evidence. Of this group, almost half found it difficult to provide evidence for health conditions, while 40% found it difficult to provide evidence of housing costs.
Despite problems like these, people struggling to make a claim aren’t being offered enough support. There isn’t a consistent offer of support across the country, and in the majority of cases it doesn’t include helping people to complete their claim. 45% of the Universal Credit claimants we help didn’t know about support available when applying, but would have used it if they had known.
People’s finances are at risk
These challenges are a major reason that, according to data from the Department for Work and Pensions, 1 in 6 people don’t receive their first full payment on time. This puts additional strain on people’s finances, as they wait longer than the standard 5 weeks for their first full payment.
Universal Credit claimants who we help who are paid late are 23% more likely to get into debt than claimants who are paid on time. These additional debts risk jeopardising people’s financial security.
The government can change this
So far the government has taken a ‘test and learn’ approach to Universal Credit. Where problems have arisen a number of welcome fixes have been made, including reducing the time people wait for payment and pledging protection for people who currently receive the Severe Disability Premium.
However, further action is urgently needed to address the problems people face when making a claim to reduce the risk to their finances. The Government should:
- Make sure adequate support is available to every claimant
- Make claiming Universal Credit less complicated
- Make it easier to provide evidence as part of a claim
Universal Credit is a significant and complicated benefit reform, so we’ll continue to share our evidence with Government to make sure it works for everyone.