​Why Universal Credit is bad news by Kevin Neil

The government’s ‘roll out’ of Universal Credit’ continues and has already reached most areas of the country, with a few areas still to come. In St Austell & Newquay this is currently scheduled for May 2018 and if you want to check the date in your area you can use the following link. The government also keeps changing the date, so it as well to check!
https://ucpostcode.entitledto.co.uk/ucdate

It’s likely that all of us, if not affected directly, will know someone affected by the government switch to Universal Credit (UC). Labour has campaigned hard over recent months, calling for the Conservative government to ‘fix’ some of the worst aspects of UC before continuing the roll out. Whilst in some areas the launch dates have been put back (for example Exeter is now postponed until September 2018), but in Plymouth the roll out is happening now & St Austell & Newquay hasn’t been delayed. We therefore thought it might be helpful to give Socialist readers a quick overview of what it’s all about.

UC, whose idea was it?
UC was created by the Conservative and Liberal Democrat coalition led by David Cameron and Nick Clegg, so if you hear any Lib Dems whinging about UC, gently remind them that without the Lib Dems it wouldn’t be happening. UC was originally announced at the Tory conference in 2010 by Iain Duncan Smith (remember him?) and he said it would bring “simplicity and fairness” to the benefit system. More of that later!

UC, what is it?
UC is a new benefit for working age people that replaces a number of other benefits. It is claimed online and there will be one monthly payment. The government think that this makes being on benefit feel the same as being in work. Of course, that’s because none of the people behind this have much (if any) experience of being on a zero hours contract, on national minimum wage and being paid weekly. So, if you are just about getting by and suddenly find that your income has dipped dramatically or even dried up, then the first thing you’ll find is that you get no money at all for several weeks. So, more people will be heading to the foodbanks then!

UC, what does it replace?
UC replaces

• Income Support
• Income-based Jobseeker’s Allowance
• Income-related Employment and Support Allowance
• Housing Benefit
• Child Tax Credit
• Working Tax Credit

 
Who does UC affect?
Eventually UC will affect everyone of working age who needs help to pay the bills. Initially though it will only affect people who make new claims, or who have a ‘change of circumstances’. Once the initial roll out is complete, people claiming ‘legacy’ benefits will be migrated across to the new benefit on a rolling program. According to the government this will start in 2019 and be complete in 2022, a full TWELVE YEARS after they started the program.
As a long-standing housing professional I am already aware of many cases where private landlords who used to be happy to accept housing benefit claimants, are starting to exclude people on UC. Unless this system is fixed, then over time anyone who pays rent and needs financial help is likely to find their situation made worse by the introduction of UC.

I’m in work so it won’t affect me, will it?
If you are in work and need to claim any benefit, such as money to help you pay the rent (currently housing benefit), or money to take care of your children (currently child tax credit), then yes it affects you too.

So, what’s the difference?
For the first time, UC means that even people in work can be sanctioned. For example, if you can’t prove that you’re doing enough to find a job on more hours or higher pay. Many commentators and journalists have described this aspect of UC as “punishing the working poor” and with good reason.

UC, what if you are self-employed?
If you have run your own business you will have to have records, such as a business plan, invoices and receipts. Your UC payment will be based on your actual earnings if you have been running your business for less than 12 months. This is called a ‘start-up period’. If you have been running your business for more than 12 months the DWP will assume you earn at least an amount called the ‘minimum income floor’. This is usually 35 times the national minimum wage, minus an amount for tax and NI. Because of this, some people will find though that they are being assessed as having a bigger income than they are actually getting and struggle to make ends meet as a consequence. Worse still, if your income goes up, your benefit goes down, but if your income goes down, UC may not be able to make up the difference.

Who will it hurt?
Anyone who is only just getting by, has no savings and suddenly finds their income disappearing, is in deep trouble. UC has been set up with a built-in delay period of six weeks until you get paid, which the government have since agreed to reduce to five weeks. For many that means getting into rent arrears and even struggling to feed their children. UC will affect the self-employed, people on low pay, people in insecure jobs and those who are suddenly affected by misfortune. Labour believes that UC is a bad system, made worse by the government failing to deal with problems that have been identified. Labour has consistently called for the roll out to be halted, whilst efforts are made to fix the worst problems. Unfortunately, and despite winning some concessions, we have a runaway government that appears unable to manage anything effectively.

​What about vulnerable people?
As with pretty much everything this government does, vulnerable people always seem to bear the brunt. The grim news is that almost 500,000 disabled people, including 100,000 children, will lose up to £2,000 a year (in some cases potentially even more) as a result of the switch to UC. Most of these will initially be unaware as for the time being existing claims will still be getting ‘legacy benefits’. However not only will time eventually catch up with them, but an innocuous event such as moving house, could suddenly cause them a dramatic drop in income.
A further twist is that unlike existing benefits, where a couple can both claim different benefits, UC can only be claimed and paid to one person. Many experts in domestic abuse fear that this could make it far harder for victims to flee, as many will have no access to money and will be wholly controlled by their abuser.

​Help! I think I need advice.
We cannot make this go away and we can’t fix it without driving the Conservatives out of office. However, there is help and advice out there.
 
https://www.entitledto.co.uk/
 
https://www.moneyadviceservice.org.uk/en
 
https://www.citizensadvice.org.uk/
 
If you need help and advice, then use one of these links. Also, if you are unable to pay your rent and fall into arrears, then you need to deal with that as quickly as possible. The Citizens Advice Bureau (see above) may be able to help. Also, you may try Shelter, who have offices around the country.
http://england.shelter.org.uk/get_advice/advice_services_directory/devon
 
 
This summary was originally produced by Kevin Neil for Labour Party members. Please feel free to share with any friends and neighbours who this might be relevant to.