The rollout of universal credit could throw thousands of British families into destitution in the lead up to Christmas, according to one of the UK’s leading housing associations.
The Peabody Trust — which manages around 55,000 homes in London and the southeast — says the new system, which will streamline the British benefits system by merging six different welfare payments into one, takes too long to get to needy families.
Universal credit, the name of the new system, began its nationwide rollout in October but families have to wait a minimum of 6 weeks before the first paycheque — which the Peabody Trust highlighted as being particularly concerning.
The Trust claims that the wait will hit more than 23,000 low-income families in the UK hard before Christmas — including an estimated 41,000 children.
“Six weeks’ minimum wait for payment is too long and is pushing the poorest into greater debt,” said Peabody’s chief executive, Brendan Sarsfield. “The government should pause the rollout and reduce the waiting period to 2 weeks.”
The strain put on families by the 6-week waiting period is already starting to show.
The Trussell Trust, the UK’s biggest food bank network, has reported a 30% rise in demand since April in the areas where full-service universal credit is being used — compared to an increase of 12% in areas not covered by the new system.
While the Trust flagged the 6-week wait as a primary cause, it also pointed to other factors for the increase in demand, such as reduced disability entitlements, the freeze on benefit increases, and low pay.
The Trust — whose 428 food bank centres have given out 587,000 three-day emergency food packages since April — warned that it is on track to deliver record levels of food aid this year.
“The simple truth is that even with the enormous generosity of our donors and volunteers, we’re concerned food banks could struggle to meet demand this winter if critical changes to benefit delivery aren’t made now,” said Trussell’s interim chief executive, Mark Ward.
The Trust is now calling on ministers to take urgent steps to cut down on the universal credit waiting time, with even more households due to move onto the universal credit system in the coming months.
An estimated 118 job centres across the UK are scheduled to adopt the system over the next few weeks, including centres in Birmingham, Manchester, Swansea, Brighton, and Oxfordshire, among other towns and cities.
A spokesperson for the Department of Work and Pensions told the Guardian that there is no causal link between the use of food banks and the universal credit rollout.
“We’re clear that advance payments are widely available from the start of anyone’s universal credit claim and urgent cases are fast-tracked so no one should be without funds,” the spokesperson said.
Meanwhile, the work and pensions committee on universal credit released a report last week examining the impact of the rollout.
“The rollout of full service universal credit has been associated with increases in rent arrears, problem debt, and food bank use,” read the report. “Many claimants have found themselves unable to cope with the long wait for their initial payment. A long wait for support may even make it more difficult for claimants to search for work.”
About 600,000 people in the UK are now on full-service universal credit — by the time the rollout is complete an estimated 7 million people (over 9% of the UK population) are expected to be claiming it. Around 20% of claimants currently wait longer than 6 weeks for a first payment.
According to the report, the 6-week wait is “at the core of many problems” that emerged in the research.
It says that people claiming the benefit would “ideally have savings or a last monthly paycheque to cover essential outgoings.”
“More than half of low and middle income families, however, have no savings, and two-thirds have less than a month’s worth,” it continued. “Many households simply do not have the resources to persist for six weeks, or in a minority of cases far longer, without resorting to desperate measures.”
“In areas where the full service has rolled out, evidence compellingly links it to an increase in acute financial difficulty,” it added, describing the 6-week wait as a “major obstacle to the success of the policy.”
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