Universal Credit six years on
Universal Credit is now six years old. Older than Brexit and fidget spinners combined, and to some, just as frustrating. As with any new method of public service delivery, there have been issues, winners and losers. Some claimants have benefitted from the streamlining of the benefits system, while many others have found navigating the new process incompatible with daily life.
Whatever view you take on Universal Credit (UC), one aspect that tends to lead to agreement is the significant change that UC has gone through over the past six years.
Some of those improvements includes: reduction in waiting time, extension of legacy benefits into the UC claim and the ability to keep more of the UC claim when entering work.
But the changes, as welcome as they are, are yet to build a system that passes the test of delivering timely support and covering the cost of living.
Of course, underlying all of this system change is the actual amount of money received in each UC payment. For most working age benefits, this amount has been frozen since 2016, amounting to an average 6% cut to the income of people claiming working age benefits. The recent announcement from UK Government that they will end the benefit freeze in 2020 will prevent the situation worsening and allow benefits to rise with inflation, but does nothing to address the drop in relative living standards caused by the freeze.
So where are we at with UC in Wales?
The full service (the current model of UC, for which most working age people are eligible) has been available across the whole of Wales since December 2018, following a gradual rollout. There are around 125,000 UC claimants in Wales, 25% of the estimated total of half a million expected to be claiming UC at the end of the rollout process, currently projected for the end of 2023, when existing working age legacy benefit claimants will be required to claim UC.
There remains a long way to go before parts of the legacy benefit system can be switched off, and a significant number of lessons yet to be learned before Universal Credit can be deemed fit for purpose for all who claim it.
What has Community Housing Cymru been doing to secure further improvements to Universal Credit?
Earlier this year we launched the latest iteration of our joint campaign with our sister housing federations, the Six Asks. This campaign majors on ensuring that Universal Credit is delivered quickly and covers the cost of living. We have made progress, securing a proposed end to the benefit freeze and making improvements to the operation of UC for housing associations, but significant issues with UC remain, including the initial five week wait for payment.
To support our work, and our member housing associations, CHC has monitored the impact of Universal Credit on housing associations and their tenants since its inception. Most recently, we commissioned an in depth 18-month impact study, the final report for which is published today.
What does it tell us?
The report shows us that the anticipated impact of UC on rent arrears has occurred, and has not yet improved significantly following improvements to the system. 84% of tenants claiming UC owe some rent to their housing association, whether through non-payment or technical issues arising from the Universal Credit system. Those tenants on UC who are in arrears owe more than double the amount of rent when compared to their peers claiming Housing Benefit under the old system. The reasons behind this are complicated, with reticence to claim UC contributing to arrears and the change to monthly payments causing budgeting issues for claimants.
It is difficult not to attribute some of the rise in arrears to the initial five-week wait for UC, leaving claimants without money to pay rent for a significant period of time and driving some into the arms of doorstep lenders or worse. These additional arrears are despite a significant rise in the resource being invested by housing associations in financial and related support for tenants, as evidenced in the report.
With political parties now campaigning for next months’ General Election, welfare needs to be a priority for manifestos.
You can read our Universal Credit impact report here.