Universal Credit is a new social security benefit that’s currently being rolled out across the UK.
Hang On, What Even is Universal Credit?
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Essentially, Universal Credit (UC) will replace a range of existing benefits. It is the core part of a long-running programme of welfare reform from the Conservatives, which aims to save £18 billion.
It’s also hoping to simplify the benefits system, increase incentives to move off benefits and into work, and to reduce worklessness and poverty.
Universal Credit (UC) is a new benefit for people on low incomes, both in and out of work. It is means-tested, paid on a monthly basis, and paid to households rather than individuals.
The new scheme began to roll out in 2013 and was supposed to completed by 2019. However, IT and admin issues meant it kept being pushed back, and it is now expected to be complete by 2022, with an acceleration from October 2017.
The Right Kind of Social Reform?
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Many people across the political spectrum agree that the UK social security system needs reform, namely replacing a range of benefits with a single, simplified payment.
But UC aims to do more than merely simplifying the social security system – it intends to save the Government billions by reducing or removing entitlements for many people in an effort to incentivise work over benefits. The wider effort to reduce public spending led to a range of additional cuts to UC entitlements, even before it was fully rolled out.
While an impact assessment was carried out on the original UC design in 2012, it was not updated to reflect subsequent cuts. The Government stand by the changes not “fundamentally altering the service”. However, the Resolution Foundation says they“have taken Universal Credit too far from its original purpose [and] unless changes are made it risks being reduced to little more than a very complicated vehicle for cutting the benefits bill.”
A Five Week Wait For Payment
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One of the more controversial parts of the plans is so-called “waiting days”, which are designed to discourage people applying for benefits to cover short-term periods of unemployment or sickness. For example, the waiting time for Jobseekers’ Allowance (JSA) used to be 3 days, which was then increased to 7 days. Now JSA is being replaced by UC, which is paid monthly in arrears, this waiting period has dramatically increased to 5 weeks (7 waiting days plus one month in arrears).
During this 42 day period, there is a risk that people may fall into rent arrears, debt, homelessness, reliance on foodbanks, or crime. Advance payments are available, but these are loans that have to be paid back through deductions to UC payments. The waiting time could directly affect a claimant’s rights to life, education, family and private life, property and even inhuman or degrading treatment through poor living conditions.
New Systems of Sanctions
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Sanctions are reductions or suspensions of benefit payments because a person has not met the conditions. This could be failing to attend jobcentre appointments or refusing to accept a job.
UC claimants are placed into four groups based on their ability to work. Different levels of sanctions apply to each group and everyone in the ‘all work-related requirements group’ can receive the highest level sanction, with payments stopped or cut for 91 days for a “first sanction” and up to 1,095 days for a third.
The problem is that many of these initial sanctions are overturned on appeal, but any hardship payments during the sanction period are repayable through UC at a rate of 40%.
Research commissioned by Salford Council suggests that a sudden loss of income by removing benefits could damage mental health, create tensions within family relationships and cause individuals to commit crimes. This clearly has implications for claimants’ human rights, especially as the Government has admitted sanctions were applied wrongly in 30% of cases.
A Change in the Household Dynamics – Especially For Women
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UC is paid on a monthly, household basis, whereas traditionally benefits have been paid to individuals every two weeks. The Women’s Budget Group argues the change reinforces the idea of a male breadwinner, discourages second earners and is likely to increase women’s financial dependence on their partners, making them more vulnerable to financial and other abuse. The Human Rights Act protects us from discrimination on the basis of gender and race, amongst other things, and from torture or inhuman and degrading treatment such as domestic abuse.
Another technical, but significant change is that the single payment is given directly to claimants to cover all costs, including housing, which was traditionally paid directly to landlords. Pilot schemes found claimants prioritised other costs over rent payments, leading to significant increases in rent arrears and evictions. Recent reports also found that three councils whose tenants have already been moved on to UC had built up about £8 million in rent arrears, meaning more than 2,500 tenants were now at risk of eviction.
Limited Support for Children and Young People
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Two other changes to UC’s design arguably have an impact on claimants’ right to not to be discriminated against on the basis of their age, gender or ethnicity.
In 2015 the Government announced that the family element (which awards extra money for each child) would be restricted to the first two children in a family. The impact assessment acknowledged that this measure was most likely to affect women and ethnic minority families.
From April 2017, young people age 18-21 year are no longer entitled to the housing costs element of UC (with some exceptions). The measure aims to “ensure young people in the benefits system face the same choices as young people who work and who may not be able to afford to leave home”. Organisations against the measure say that it represents the removal of an “essential safety net” for young people at risk of homelessness. The Government’s equality analysis shows that men are more likely to be affected by the policy.
Social security and human rights
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As we’ve explored in articles on the welfare state and poverty, people on low incomes are (sometimes entirely) reliant on the Government for their existence and fulfilment of rights, from decent education to social housing, and job creation to welfare policy. The Government acknowledged some of the problems with Universal Credit, for example by lowering the taper rate at which a UC payment reduces as someone moves into work from 65p to 63p, and providing extra money for discretionary housing payments.
While decisions about Universal Credit work allowances or withdrawal tapers may seem technical, they represent important choices that the Government has made about how to support the most financially vulnerable people. These choices have a significant impact on the fulfilment of these peoples’ basic human rights.