New evidence from the Child Poverty Action Group (CPAG) has recently put the spotlight back on to the controversial Universal Credit (UC) benefits system. CPAG published a report which argues that the benefits system, which was first piloted in 2013 is, in fact, causing workers to be out of pocket largely due to the rigid monthly assessments carried out on claimants income and circumstance.
Universal Credit was implemented to overhaul the welfare benefits system, replacing six previous benefits which were being paid fortnightly or weekly.
The assessment runs over a calendar month starting from the date UC is awarded, at the end of each month claimants circumstances and income are assessed to determine their ongoing entitlement to UC with the next payment made a week later in arrears. This means that if a claimant has a payday on the first or second assessment date or are paid one or two days early because of a weekend or bank holiday they are classed as having two paydays in one assessment month and none in the one after.
This would then mean a lower UC payment in month one due to “higher” wages and then can actually be lower again in the non-payment month due to the benefits cap on people who do work or have low earnings (under £520 a month).
CPAG have set up an early warning system which gathers cases from advisers working with families and social security recipients and have scrutinised 400 cases since 2017. They found 1 in 20 had issues relating to the assessment period.
The report has claimed; “In the worst cases, workers are losing hundreds of pounds each year simply because their pay-days clash with the monthly ‘assessment periods’ in universal credit (UC). Far from offering much-vaunted simplicity, UC rules leave many workers unable to predict what their payments will be from one month to the next. People who happen to move house at the ‘wrong’ point in their assessment period can also lose hundreds of pounds in help with rent.”
This was also found in a report in June 2018 by Money Saving Expert which revealed a fifth of claimants are still receiving their first payment late, finding that on top of the mandatory five-week waiting period that is given for the first payment, they often had to wait up to four extra weeks on top of that concluding approximately 300,000 claimants will be paid late this year.
Fears were first raised on delays in payment during part of the rollout in December 2017 when Laura Pibford Labour MP highlighted potential problems with payment dates during Prime Ministers question time asking the PM;
“The DWP (Department of Work and Pensions) proposes to roll-out the UC system in my constituency over Christmas time; this is either gross incompetence or calculated cruelty?”
The Prime Minister Theresa May argued at the time that the DWP had been performing much better and stated that “figures had shown an improvement in terms of people getting payments on time and have increased substantially”.
The issues surrounding UC are also affecting taxpayers as a whole according to the National Auditors report which attacked the system earlier this year, concluding that the programme may end up costing more than the system it replaced and can not prove it helps people to work. The NAO Report paints a damning picture of the system which had a £1bn investment put into its creation.
However In June this year in a speech to the Reform think-tank, Welfare Secretary Esther McVey said UC was adapting the welfare system to changing patterns of work and using the latest technology to create an agile service offering “tailor-made support”.
But in an almost unprecedented official admission that not all is going well with the benefit, which is six years behind schedule, she said changes were needed.
However, criticism does continue and the government continues to roll out the UC at present with the latest rollout with the various roll out across the UK this month and when challenged recently the DWP stood by the system stating;
“We continue to listen to feedback and make any necessary improvements during the rollout without test and learn approach”.