Sunday, October 08, 2017

Looking at the issues surrounding Universal Credit

We had a presentation this week at Gateshead Civic Centre about the role out of Universal Credit. Later this month, UC will arrive fully in Gateshead. The presentation looked at how UC has been created from the merger of 6 separate benefits and will be paid monthly in an attempt to reflect the circumstances of those in work who receive their pay and have to budget a month at a time. I have no particular problem with that but the key issues in my view are the 6 week delay in making the first payment and the rejection of most applications to have the housing benefit element paid directly to landlords (in many circumstances they are social landlords).

Whatever the reason for a household being on the breadline, failing to pay benefits for 6 weeks simply makes a bad situation worse and in no way reflects the typical circumstances of households in employment. While it is typical for someone's salary to be paid partly in arrears, there must be very few employers who pay two week after the end of the month.

Where pilot schemes for paying UC have already gone ahead, rent arrears have mounted. I did ask at the presentation what the outcomes of applications for direct payments to landlords were but the answer was that nearly all are rejected. Since the taxpayer is providing this money to cover a person's rent, it seems reasonable to require that the money is actually used for the rent payments rather than other purposes. Ideally, the recipient should be budgeting for this but if, for whatever reason, they don't, the taxpayer, footing the bill for this benefit, should have a realistic expectation that the money they pay for a recipient's rent is used for that purpose.

So, ending the 6 week delay and allowing more direct payment of rents are two key issues to solve before UC will work properly.

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