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CAB Warns Against Universal Credit Acceleration

The Citizens Advice Bureau (CAB) has warned against accelerating the introduction of Universal Credit. Since Universal Credit was introduced in 2013 as part of a raft of welfare reform and benefit changes, there have been concerns raised about the manner of and the delays in payment, after a claim is made.

Changes in 2007 meant that the tenant had no right to specify that the rent should go direct to the landlord; the same applied with Universal Credit and this continues to be a contentious issue. The Government believe it promotes tenant responsibility; the landlords know it promotes rent arrears and tenant debt. For the first time under Universal Credit, social landlords had to accept that their tenants would also receive the rental element of Universal Credit and saw massive increases in rent arrears.

A new report produced by the Citizens Advice Bureau (CAB), ‘Delivering on Universal Credit’, suggests that the ambitious plans to extend this so that there will be 7 million claimants by 2022 be put on hold until the problems with delivery are rectified. Should these numbers be realised, it is estimated that 54 per cent will be working and 52 per cent of all families with children will claim Universal Credit. The Government would have us believe that this is an indicator of more generous benefit levels, but this makes the issues around delivery of the benefits more distressing.

There is a one week waiting period, before a claim can be made. It is then 5 weeks before the first payment is made, making it 6 weeks at least before a claimant receives their entitlement. It can be extended beyond this period, if help is required and the much-vaunted helpline has proved to be a frustrating and long-winded process.  

Their records show that the CAB supported 30,000 people with Universal Credit issues; 30 per cent of them had made over ten calls to the helpline, often waiting more than thirty minutes to get through.

A survey they conducted of 800 people who had sought their help regarding payment of Universal Credit found:

39 per cent had their benefit paid in 6 weeks                                                                                                                                

11 per cent waited more than 10 weeks for their benefit payment

How do families survive if they are waiting so long for benefit? The answer is simple – 57 per cent have to borrow whilst waiting for the benefit to come through. Some will be able to borrow from family and friends. Others will have to rely on pay-day loans, suffering high interest and therefore less available income for the period until the debt is cleared. This cannot be what was envisioned in the aim of empowering tenants and leading them to take responsibility for themselves.

Universal Credit has been applied gradually and sensibly, with many changes along the way, including the repayment of rent arrears. But after four years, it is set to accelerate from October 2017. Until then, five new areas a month have been chosen for implementation. From October, this will increase to fifty new areas each month.

If the results in the CAB report are repeated, CAB will need many more staff to cope with the greatly increased numbers, struggling to cope with a system intended to bring claimants into a mind-set for work.

Private landlords have made their representations, prompted in many cases by real concern for their tenants, and been ignored. Will the CAB, with the amount of political support they get, be treated in an equally cavalier fashion? Or will steps be taken to iron out the issues, to turn it into a seamless system that does what it aims to do To make it a transparent and easily understood procedure that actually benefits the recipients, not lead them to food banks and loan sharks for survival.

For advice on buy to let issues – General Knowledge