The rollout of Universal Credit should be paused until significant problems with it are fixed, says Citizens Advice.
In a major new report, Delivering on Universal Credit – the charity reveals that the requirement to wait for six weeks to receive any payment means people face serious financial insecurity, with many being forced into debt.
The research also identifies a wide range of administrative challenges, including problems with the online system and long waits to get help over the phone, which can make the initial six week wait even longer.
Universal Credit merges six existing benefits into one – including tax credits, housing benefit and Employment and Support Allowance (ESA).
By 2022 over 7 million households will receive Universal Credit and new Citizens Advice analysis reveals over half (54%) of these will be working households.
Universal Credit will be claimed by more than half (52%) of all families with children in the UK and 6 in 10 (58%) households where an adult is disabled or has a long term health condition.
As part of the new study, Citizens Advice surveyed 800 people who sought help with Universal Credit in areas where there is full service – meaning anyone who would have previously have claimed one of the old benefits has to apply for Universal Credit.
It found that over a third (39%) of people are waiting more than the 6 weeks it should take to receive their first payment.
While just over 1 in 10 (11%) are waiting over 10 weeks without the benefit and 3 in 5 (57%) are having to borrow money while waiting for their first payment.
In the last year Citizens Advice supported more than 30,000 people with Universal Credit issues, with a quarter (25%) also needing help with debt issues.
The report also reveals that people are having problems with the application process. These range from difficulties using a computer or with the online system, to issues getting hold of the right evidence to support their claim.
And when things go wrong the research shows people are not able to get the help they need: nearly a third (30%) of people said they had to make more than 10 calls to the Universal Credit helpline during their application process, often having to wait over 30 minutes to get through.
Full service Universal Credit has been rolling out gradually across England and Wales for over 2 years, to around 5 new areas each month. But in October this process is set to speed up significantly, to over 50 new areas every month.
Citizens Advice is calling on the government to pause this acceleration and use the time to fix key problems with Universal Credit, before thousands more people are brought into the system.
The national charity also highlights that, unless addressed, these challenges will undermine the goals of Universal Credit, to simplify the benefits system and offer people the security and support they need to move into and progress in work.
As it stands many people are facing uncertainty about how much money they will receive and when it will arrive. This insecurity filters through to other areas of their lives, for instance making it harder to focus on finding work while they worry about how to keep on top of bills or put food on the table.
One woman turned to Citizens Advice for help when her Universal Credit application was delayed because her childminder didn’t provide receipts on a type of letter headed paper which was required as evidence for her claim. Because of this delay she lost her childcare places and had to take time off work to care for her children. Further delays to her Universal Credit claim then meant she could still not afford childcare, and she has since lost her job for taking so much time off.
Citizens Advice Chief Executive, Gillian Guy, said:
“Universal Credit is already failing too many people, pushing them into debt and leaving them without the means to make ends meet.
“Citizens Advice supports the principles of Universal Credit, but pushing ahead with roll out while the system remains beset with problems will put thousands more families at financial risk.
“The current flaws with the system also undermine the very reasons Universal Credit was introduced: to simplify the benefits system and make sure every hour of work pays. As things stand, too many people are finding Universal Credit very complicated, and problems such as long wait for payments or difficulties getting help with an application mean they are less able to focus on getting into work or increasing their hours.
Debbie Abrahams MP, Shadow Work and Pensions Secretary, and MP for Saddleworth said:
“The Government must address the chaos engulfing Universal Credit. It must pause the programme to tackle the serious design flaws in UC at the same time as addressing its chaotic mismanagement.”
“The Government’s cuts to Universal Credit means that on top of the design and delivery issues, it fails to make work pay, compounding people’s ability to make ends meet. In spite of this Government’s warm words about making Britain fairer, their tax and spending choices have done the opposite.”
“Labour will invest to reform Universal Credit, under our plans to create a social security system that, like the NHS, is there for us all in our time of need.”