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11 November 2019

New report demonstrates continued serious impact of Universal Credit on claimants

Today we release research demonstrating the serious impact of Universal Credit (UC) on housing association tenants.

Our data shows 84% of housing association tenants claiming UC owe an average of £556 in rent. This level of debt has increased over the past 12 months despite improvements to the new UC system.

The figure is more than double that owed by tenants receiving Housing Benefit through the old system.

A main cause of debt is the current five week waiting time for UC payments. With the festive season coming up, this means people claiming after this week won’t receive their payment until after December 25th.

With the added pressure of Christmas, we are concerned this will cause significant hardship for many people who are facing shortfalls in income this month.

Housing associations in Wales have reported that food bank use among people claiming Universal Credit has increased over the past six months. This means thousands of families could be facing Christmas without the luxuries many people take for granted – turkeys, mince pies and presents.

To fill the income gap many claimants opt to apply for an advance Universal Credit payment, which acts as a loan that will then be deducted from future payments. For many people, however, repaying this loan can mean losing up to 30% of their future Universal Credit payments.

We are calling for the UK Government to significantly reduce the five week waiting period to several days to limit avoidable debt levels.

Will Atkinson, Policy and External Affairs Manager at CHC said:

“Despite some improvements to the Universal Credit system, the increase in food bank usage and surge in rent arrears shows it is still causing unnecessary hardship for people.

“The policy is also having an impact on resources and services in the social housing sector. Staff working for Welsh housing associations are spending two to six hours a day supporting tenants with Universal Credit related issues, showing the policy is not yet fit for purpose.

“With political parties now campaigning for next months’ General Election, welfare needs to be a priority for manifestos.

“We are now calling on the next UK Government to recognise the impact Universal Credit has had by ending the five week wait and delivering a first payment within days rather than months.”

Read the full report here.