Call for financial support during wait for first Universal Credit payment

Evidence given by a Fuse academic has been cited in a report calling on the Government to provide financial support to people waiting for their first Universal Credit payment.

It recommends that starter payments should be made to ensure that everyone has enough money for basics such as food and heating.

Fuse Associate Mandy Cheetham from Northumbria University addressed the House of Commons Work and Pensions Select Committee in June on the impact of Universal Credit and the problems that claimants experience during the minimum five week wait for a first payment.

Dr Cheetham had previously led research published in BMJ Open (2019) which found that people moved onto Universal Credit are fighting to survive and being forced into debt, rent arrears and extreme hardship, with serious consequences for their health and wellbeing.

The Committee’s newly published report finds that the current wait leaves people with a difficult choice: five weeks with no income, or the risk of debt and hardship later.  Some of the evidence the committee heard suggested that people on Universal Credit are more likely to need a food bank or have rent arrears than people on the legacy benefits that it replaces, and that moving to Universal Credit may lead to a rise in psychological distress.

The report recommends that:

• A starter payment - equivalent to three weeks of the standard allowance - would be a simple way of ensuring that new claimants have the money they need for basic living essentials.
• The Department of Work and Pensions (DWP) should make the move for people on existing benefits seamless and pay a starter payment in other cases.
• Advances should still be available for people who need further support to get by, but they should be renamed ‘new claim loans’ to make clear that they will need to be repaid. The DWP should also recognise that a request for a loan is a clear indication that someone is struggling and offer support as early as possible.
• Changes to the way that historic tax credit is clawed back from people when they move to Universal Credit, and for DWP’s debt collection to follow best practice in the private sector.
• The Government make permanent the £20 per week increase in the standard Universal Credit allowance announced in response to the coronavirus pandemic.

"The changes made to Universal Credit are welcome, but the increase needs to be permanent"

                                                         Dr Mandy Cheetham

Dr Cheetham, Research Fellow at Northumbria University, said: "This report is timely given the increasing numbers of people who are moving on to Universal Credit as a result of COVID-19, which has shown up the stark inequalities facing people in North East England.

"The changes made to Universal Credit are welcome, but the increase needs to be permanent. The need for a supportive, accessible and non-judgemental safety net is essential to help people through these difficult times."

Mandy’s research focused on the experiences of vulnerable people and advice and support staff supporting them in North East England. It found that the aims of Universal Credit, to simplify the benefits system and move people into work, are simply not being met.  Instead, people moving onto Universal Credit, who participated in the study including those with disabilities, health problems or complex lives, reported lengthy delays before receiving their first Universal Credit payment in full.  As well as this, once the payment is received, deductions for advance payments, historic overpayments and rent arrears are leaving people without enough money to eat or pay essential bills.

The researchers also submitted written evidence to the House of Lords Economic Affairs Committee about the impact of Universal Credit, which was published earlier this year, and have been involved in developing CREDIT, a Universal Credit theatre performance, in collaboration with Cap-a-Pie theatre company, drawing on the research, funded by Newcastle University, Arts Council England, The Catherine Cookson Foundation and Gateshead Council.

More information:

• House of Commons Work & Pensions Committee report: Universal Credit: the wait for a first payment
• Research publish in the BMJ Open (2019): Impact of Universal Credit in North East England: a qualitative study of claimants and support staff.  Commissioned by Gateshead Council, and undertaken with support from Fuse, led by Dr Mandy Cheetham (Northumbria University), and colleagues Dr Suzanne Moffatt (Newcastle University) and Dr Michelle Addison (Northumbria University).

Picture credit: calculator and money by Images Money. Creative Commons Attribution 2.0 Generic (CC by 2.0)

Last modified: Tue, 27 Oct 2020 14:51:50 GMT