The professed aim of the introduction of Universal Credit is to boost the personal responsibility of claimants, smooth the passage to work and prepare out-of-work claimants for their next job. There are a number of problems with Universal Credit, however - problems which haven't been given anywhere near the amount of coverage by the press that they warrant.
The Universal Credit scheme officially goes live today with a ‘Pathfinder’ version in the north of England – Ashton-under-Lyne – and the scheme is expected to be rolled out nationwide from October 2013.
Universal credit will merge several benefits and tax credits into one monthly payout.
There are a number of problems with Universal Credit, however – problems which haven’t been given anywhere near the amount of coverage by the press that they warrant.
-
The benefit changes will “reinforce the traditional male breadwinner model”, in the words of the Women’s Budget Group. The new universal credit will mean that whereas previously certain benefits like tax credits were paid directly to mothers, the universal credit will be claimed and owned by couples jointly and usually paid in full to one partner. Incentives for second earners (usually women) will also be weakened according to independent evaluations; and even more worryingly, the government believes ‘that any such risk of decreased work incentives for women in couples is justified.’
-
Households that earn £247 or less a week will see a fall in real income in 2015 because of the changes to benefits, and lone parents will be worse off, whatever their circumstances, according to the Chartered Institute of Housing.
-
Research suggests that a monthly payment will make it harder for claimants to budget. A Department for Work and Pensions (DWP) survey asked benefit and tax credit recipients the following question: “If payments of benefits and tax credits are made monthly, would you find it easier or harder to budget, or would it make no difference at all?” Four in ten said it would be harder to budget after the changes and just one in ten said it would be easier. Four in ten said it would make no difference. The fear most commonly cited by claimants was that they would run out of money before the end of the month.
-
The proposal that social tenants should have to manage their rental payments, as opposed to the money going direct to their social landlord, is overwhelmingly opposed by most social tenants. 86 per cent of social tenants believe “strongly” that it is better for housing benefit to be paid directly to the landlord. A third of claimants are not confident they will be able to keep up rental payments if they have to manage benefits paid to them for their rent.
-
The reforms are bad for those who are in work and looking to work more, especially those who previously received Working Tax Credits. According to an analysis by the Institute for Fiscal Studies (IFS), “Low earners who do have a working partner will tend to see their marginal effective tax rate (the fraction of a small rise in earnings lost to income tax, national insurance, withdrawn benefits or tax credits) increase, because Universal Credit will have a higher withdrawal rate than tax credits do.” (p4) The marginal tax rate for this group will be 76.2 per cent, up from 73 per cent as it is now.” As well as reducing incentives for second earners (see point one), so-called “strivers” will effectively be penalised for working harder.
39 Responses to “Five things the coalition won’t tell you about Universal Credit”
Helen
I have been switched to this scheme and I have to say it’s the worst thing ever! I am currently working but because it’s a zero hour contract (even though I have done no less than 20 hours a week since I been there for over 6months!) I have to attend weekly meetings at my local job centre,and log into their job search site daily( and they check) I am made to apply for jobs that I am not qualified for and then have to attend monthly career meetings on top just to claim in affect my tax credits. The whole scheme is absolute bollocks anything after £111 per week I earn they take money from me to the amount of 65p in the pound which means I am working for well under the minimum wage I’m getting less help and less money per month and I’m doing more work how is that helping single mothers!
Marie Jones
I agree Diane Charlton I am a Carer and I found myself out of work and applied for Universal Credit straight away and the first 5 days are waiting days for what!!! and then you have to apply for jobs every day for 5 hours (35 hrs week) and as you will appreciate in our line of work we have to have a DBS which we have to pay for and can take up to 3 months to come through and if we are offered a job we can’t start until our DBS has been received but in the meantime we have to carry on applying for jobs and attending interviews so we don’t lose our benefit!!!! so every job we apply for in the meantime needs a DBS which we have again have to pay for!!!! Absolute madness whats happening to our Country!! Absolute Dimwits in Parliament Grrrrr
Marie Jones
And we are only asking for the money we have paid in in our NI contributions so technically the govt are stealing in my eyes! How can Univeral Credit be helping anybody? So frustrating !!
ANGELA BAYLIS
I have been temping and enjoy working as I am a hard working individual. When my earning don’t make the month whereby I am allowed a top up. Every payment I have had even if was only 30 pounds top up has been late. I call 3 days before and the day before and they said 3 days they will process on the day before they say we will not beable to process it until the day of payment. Every payment has been late. I had one payment which was 4 days late. It was very hard for myself on my own, trying to get work and Universal Credit I found like to bully you on the phone, when I mentioned why is my payment date today and nothing has been processed. They decided to say to me please do not speak, if you speak I will have to put the phone down. This has happened every time on all payments that are late and never paid on the payment date.