Universal Credit: Charity urges end to five-week wait amid coronavirus and poverty fears
Universal Credit has an advance payment system in place which is designed to help claimants cover their bills while they wait for the first official payment. While this advance is interest free, it still a loan from the government which must be paid back. Because of this, there have been many reports of people falling into debt spirals.
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In the recent budget Rishi Sunak announced a relaxation of rules concerning Universal Credit and the general benefits system.
This was largely in reaction to the coronavirus outbreak, as the Chancellor of the Exchequer confirmed: “To make sure that time spent off work due to sickness is reflected in your benefits, I’m also temporarily removing the minimum income floor in Universal Credit.
“And I’m relaxing the requirement for anyone to physically attend a jobcentre; everything can be done by phone or online.
“Taken together, these measures on ESA and Universal Credit, provide a boost of almost £0.5bn to our welfare system.”
On top of this, changes were made to the advance payment system which means that claimants shouldn’t struggle too much with repayments.
Advance payments will soon be repaid over 24 months rather than 12, although these changes will not come in until later in the year.
Despite the positive movements, some are calling for additional changes to be put in place.
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Emma Revie, Chief Executive of the Trussell Trust, called on the government to end the initial five week wait for initial payments.
Ms Revie said: “The Chancellor is right when he says that coronavirus represents an unprecedented challenge for the UK, and to introduce measures to strengthen the safety net for the most vulnerable people.
“We welcome the extra financial support announced, particularly the £500million hardship fund for local councils, which can play a key role in anchoring us all from poverty.
“But as coronavirus unfolds, more people could need this safety net than ever before – especially those who aren’t eligible for sick pay or have unstable jobs.
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“For many of these people the five-week wait for a first Universal Credit payment could cause real hardship, despite measures announced in today’s Budget.
“We know the five-week wait is already pushing people to food banks, trapping many in debt and making issues with housing, ill health, disability and domestic abuse worse.
“In his statement, the Chancellor said that he will continue to review the situation”
“As more people look likely to move onto Universal Credit as a result of the outbreak, the most effective way to help would be to end the five-week wait for a first Universal Credit payment by giving people grants, rather than loans that have to be paid back further down the line.
“We can prevent more people being locked into poverty as the outbreak develops by ending the wait now.”
The government provides support in many ways for claimants who may be in financial difficulties.
As it stands, the state have made no announcements about any changes to the five week wait system but they detail that help and advice can be sought from the following organisations:
- A Jobcentre Plus work coach
- Citizens Advice
- Money Advice Trust
- The Money Manager tool from Money Advice Service
- My Money Steps
- National Debtline
- Shelter for help with housing and homelessness
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