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New British benefit system leaves recipients desperate and destitute

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MIDWEST CITY, Okla.- Universal Credit was introduced in the United Kingdom in 2013. This system was designed to replace the following six benefits and credits individuals may be entitled to: Jobseekers allowance (unemployment), Housing benefits (support for rent for low-income individuals), working tax credits (a supplement for low-income workers), child tax credit (a monthly credit similar to child tax refund),  income based employment and support allowance (for those unable to find a job due to disabilities or long-term illnesses), and income support (support for low income individuals working less than 16 hours for an acceptable reason).

The system was designed to simplify the above benefits and credits into one monthly payment. It also aimed to solve the issue in the old system where people received more on benefits than if they actually started to work. With Universal Credit, for every 1 pound earned over your allowance 63 pence will be deducted from benefits, allowing benefits to slowly decrease rather than immediately being cut off. There is also a stronger incentive for many to find work over 35 hours, putting in place stronger requirements and obligations for individuals to receive their maximum benefit entitlement.

However, the system that should have been rolled out nationwide in 2017, has experienced costly delays, administrative errors and technical problems, forcing it to only be rolled out to only a few locations and a predicted roll out to 7 million people by the year 2022.

In those few locations, the biggest problem has been the initial waiting period. An initial claim has a waiting period of seven days, then there is a waiting period of one month for payments to be paid in arrears, and after this period it should take no longer than seven days for the money to deposited into an account. Therefore, should there be no administrative errors, the earliest the claimant can expect to receive any money is six weeks. The Department of Work and Pensions has reported that one in four claimants are waiting longer than six weeks. 

The result has had the biggest impact on housing with landlords evicting tenants and refusing to accept Universal Credit as a form of payment, unhappy with being paid in arrears and with the uncertainty and instability of the system.The fact that a physical address is required on most job applications means that an evicted claimant is unable to search for work.

Claimants being unable to support their families during the wait has been widely reported, with food banks in Universal Credit areas seeing increased traffic by as much as 97 percent, resulting in a food shortage. There have been many reports of families unable to provide basic necessities for their children leading to the fear that social services (Child Protective Services) will have to get involved. Claimants have turned to desperate measures: selling possessions, making desperate deals, and taking out loans which may lead them to a world of spiraling debt. Due to all of the above, the wellbeing of claimants is also a concern, with many becoming depressed and overwhelmingly stressed.

So far, Universal Credit has only been applied the unemployed; however, it will soon be rolled out to those considered low-income. The Universal Credit’s incentives to find more hours of work also comes with sanctions should search requirements not be met, with increasingly harsher sanctions for each failure. Sanctions, which are currently present in the existing system, have been shown to be applied unfairly, not taking into account situations beyond the worker’s control. The sanctions have also been shown to stress workers out, making them a less effective worker, ultimately affecting their ability to do their job properly. Sanctions would also negatively affect those on zero work hours, that is those who are not guaranteed work on their contract and unable to attend appointments because of their irregular work hours.

The media is reporting claimants in dire straits, the Labor Party called an emergency debate in an attempt to force the government to stop and fix the system, and parliament voted unanimously to pause and fix the Universal Credit system before it affects any more people. However, Prime Minister Theresa May and her Conservative government appear to have ignored all the protests and are pushing forward with its implementation.

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Red Dirt Report was launched July 4, 2007 as an independent news website covering all manner of news, culture, entertainment and lifestyle stories that affect and interest Oklahoma readers and readers outside of our state. Our mission is to educate, promote civic engagement and discourse on public policy, government and politics. Our experienced journalists provided balanced in-depth coverage of news stories that affect Oklahomans. Our opinion/editorial stories come from a wide range of political view points. We carry out our mission by reporting, writing, and posting news and information. read more

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