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Universal Credit to be even more unpopular

Can Universal Credit become even more unpopular? Yes it can if a recent edition of ‘Inside Housing’ is to be believed. New regulations were enacted in Parliament, week commencing 9th March, which stated that from 6th April 2016, tenants would be expected to save something themselves to cover for future periods of unemployment.

The Department of Work and Pensions (DWP) calculates the Universal Credit payable to applicants on a monthly basis, with a threshold set for maximum earnings. Although there is a more generous taper on earnings, if the threshold is exceeded, the entitlement is reduced, or worst case scenario removed altogether. Under the new legislation, the claimant’s earnings for the previous six months will be used in the calculation. Large earnings in one month, even with a reduction the next, may mean that claimants cannot claim universal credit for up to six months.

To confuse the issue further, the new rulings only apply where there are repeated claims within six months of the previous claim ending. It seems those people desperate to work and taking jobs that may not be long term, but anything to work, will be penalised over the people that may not make much effort at all. A job of 4 or 5 months, whilst preferable to benefit, will not allow much scope for saving, should they be prohibited from claiming immediately their job ceases. Often the claimant will be using his wage to pay back loans, perhaps buy appropriate work clothing. Whilst it may be reasonable to expect that claimants who have been in long-term employment should have accrued some savings, short-term contracts and casual work do not allow for this. Will people be discouraged from taking season work? Almost certainly, once they realise what that could do to their claim.

Bad as this situation may be for tenants in the private sector, social landlords are also worrying, feeling that 200,000 tenants could be hit by this new ruling, leading to increased rent arrears and, eventually, eviction. The measures put in place in December 2014, where 20% would be deducted from the remaining benefit when a landlord asks for direct payment due to rent arrears and then repaid to the landlord, would not apply, of course, where he cannot make a claim.

There will be no escaping the penalties of short-term working; Her Majesty’s Revenue and Customs (HMRC) website is now automatically linked to the DWP. This will make fraud a lot harder to perpetrate, but will also mean that the information on salary payments, dates and amounts, will be at their fingertips.

There were 31,080 people claiming Universal Credit on 8th January 2015 – 100,000 are expected to be claiming by May. It is anticipated that 11 million people will eventually claim Universal Credit. These are high numbers and will put stress on the offices dealing with the claims on a national basis. It is to be hoped that the 200,000 it is anticipated will wait 6 months for benefit are not joined by countless others, struggling whilst their claims come through and not advised of the help available in hardship funds, advanced payments etc. as was shown in the recent ‘Despatches’ television programme.

Always keep the lines of communication open with your tenants, tell them to ask for payments if they find they cannot manage whilst waiting for benefit to come through. It is distressing that instead of encouraging people to ask for help, the tenant must do what he may feel is humiliating – to make it clear he is in dire need of assistance.

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