The Universal Credit represents a “significant challenge” to low-income families and is likely to affect women “disproportionately”, according to a report from the Joseph Rowntree Foundation today.
The report, “Implementing Universal Credit Will the reforms improve the service for users?” (pdf), also found the scope and scale of financial support and advice to help people through the transition needs urgent clarification; service users must be informed about how schemes are changing at a local level; the Government needs to review the impact of localisation on UC’s key aims; and there needs to be a more visible ombudsman for the benefit and employment services system.
It says payments of UC need to be explained clearly and regularly, with the elements intended to support children identified separately, and the ‘claimant commitment’ needs to be an agreement between the service user and the DWP, setting out the actions the claimant should take to prepare or look for work.
The new benefits system will encourage more people to work part time, the report adds, but the effective tax rate of working more than 16 hours a week will remain very high, potentially making those in work worse off, prompting shadow work and pensions secretary Liam Byrne to describe it as a “multiple pile up of problems” which David Cameron and Iain Duncan Smith are “completely incapable” of making sense of.
On the disproportionate impact on women and the challenges faced by low-income families by the transition to UC, the report says:
The decision to distribute UC at the household level has been criticised for a number of reasons. Organisations have argued that it risks creating an unfair bias against women and this is supported by research showing that male partners are more likely to be the main claimant of core means-tested benefits in a household. The incorporation of payments for children into UC will mean that child-related support will not necessarily be transparent or paid to the main carer, leading to concerns that this assistance may be less likely to reach the children it is meant to support.
Furthermore, the shift towards monthly payments has been met with anxiety among service users themselves, who are concerned that the challenge of budgeting on a low income will be very difficult, especially during the transitional stage of UC implementation. If no financial assistance will be available to bridge the gap, it is essential that service users are prepared well in advance for the shift to monthly payments so they can start to make provision for possible shortfalls.
If financial assistance will be available, but requires service users to borrow money – through a bridging loan, for example – this may lead to many UC recipients beginning their claim in debt. In this key transitional stage, the government should improve the availability of financial advice and support; the lack of clarity around what this will look like and when services will be established gives much cause for concern.
In terms of solutions to the problems posed by UC, Tony Wilson, director of policy at the Centre for Economic & Social Inclusion, says:
“We want to see simple, efficient and accessible support for those who cannot manage their claims online; better financial support for claimants in managing the move to monthly payments; and more personalised and flexible face-to-face support to help people move back into work.
“Successive governments have had chequered histories in delivering major benefit reforms. In less than a year, we will start the biggest yet – affecting more than 10 million families nationwide. It’s not too late to get it right.”
Left Foot Forward has repeatedly blogged about the flaws of Universal Credit – yet time and again, IDS refuses to listen; expect little to change.