Countering DWP Myths about Universal Credit

We are exposing some DWP myths about Universal Credit

1 DWP Myth: Universal Credit is a system that really works

The department says that UC supports people back into work, every step of the way.

Fact: The principle of simplifying the benefit system is welcome but pushing people into further debt and misery is completely counter to the principles on which the welfare state was founded.

The mix of cutbacks and increased individual responsibility has been particularly harmful to renters enrolled on to Universal Credit. Unlike housing benefit, the housing element of Universal Credit isn’t automatically paid to the claimant’s landlord. Research from a collective of housing federations across the UK reveals that nearly 3 in 4 UC claimants are in rent arrears, compared to 1 in 3 of all other tenants.

UC has been beset with serious and wide-ranging problems since its inception. The roll-out timetable has been pushed back several times, with the entire programme having to be reset in early 2013. The independent National Audit Office judges that UC has neither saved public money nor helped people into work. But it has left thousands of vulnerable claimants penniless, while others are forced to turn to food banks to survive and even lose their homes.

The well-respected parliamentary public accounts committee says that the benefit is causing unacceptable hardship and difficulties for many of the claimants it was designed to help.


2 DWP Myth: Universal Credit works for staff and clients

Fact: Our union has had serious concerns from the outset on the development, implementation and effect of the government’s Universal Credit programme (UC). Universal Credit remains a disaster because it is driven by the Tories’ political choice to cut public spending – the system is almost £3billion a year than the one it replaces - and to denigrate people who rely on social security support.

As the Guardian reported in March the digital-by-default benefit is causing problems for up to half of all claimants, according to the DWP’s own figures. Our members are on the frontline, and are suffering as a result of the government’s chaotic welfare ‘reforms’, staff cuts and office closure programme. Our members see first-hand the devastating effect government policies have on the most vulnerable in our society, yet their voices and concerns are too often ignored by the Tory government.


3 DWP myth: Universal Credit is designed to reflect the time we live in now

The DWP says that increasing numbers of people want to work flexible hours in order to fit around family life and commitments.

Fact: The fact is there is a total lack of choice for many people needing to work to try to make ends meet. Zero-hours jobs are often the only work available to people and such unreliable, low-paid work can make it a huge struggle to pay rent, mortgage, bills and buy food.

The TUC report the Gig Is Up highlights how over three million people – 1 in 10 of the UK workforce – now face insecurity at work. Not only do they often face uncertainty about their working hours, they also miss out on rights and protections that many of us take for granted, including being able to return to the same job after having a baby, or the right to sick pay when they cannot work.

4 DWP Myth: Universal Credit helps people to take charge of their personal finances more effectively

Fact: The emphasis on the individual responsibility element of Universal Credit is of particular concern for those who are vulnerable or have financial literacy issues. Research from UCL and the University of Cambridge found that 1 in 3 cannot work out the correct change from a shopping trip while 4 in 10 could not apply a simple discount.

Research from Policy in Practice has also shown that more families (40%) stand to lose out on universal credit than those families who stand to gain (30%).


5 DWP Myth: Your jobcentre can pay you an advance

Fact: These government loans supposedly designed to tide people over until their first Universal Credit payments reach them, are causing more harm than good, a new report has suggested.

Charities StepChange and the Trussell Trust said advance payments to help 'people get by' are only fuelling more hardship because of the repayment thresholds. Advance payments are not a solution for many households already at risk. Deduction levels are fixed by the DWP and these can be hard to challenge, even if you fall into financial hardship while repaying. The DWP can deduct up to 40% of your Universal Credit allowance to repay debts. This will fall to 30% in October this year.

The National Audit Office findings showed that one in four payments in the last 12 months were made late. 40% of new claims were made to wait 11 weeks for their first payment.


6 DWP Myth: Claimants are online and digitally skilled, and confident enough to claim and maintain benefits digitally

Fact: The Department of Work and Pensions’ (DWP) own survey data suggests 46% of people claiming Universal Credit need help applying online. The same data shows that a quarter of applicants who fail to submit their claims online put it down to difficulties accessing computers or the internet.

The government expects people to make and manage their claims online, but last year the UN’s rapporteur on extreme poverty, Philip Alston, noted that just over half of people on low incomes in the UK do not have home broadband and 21% of the entire population do not have basic digital skills. Alston said the digital-by-default design of the universal credit system may be contributing to the third of claims never reaching payment, and accused ministers of putting up digital barriers “that effectively obstruct many individuals’ access to their entitlements”.

Mr Aston said that Universal Credit has built a digital barrier that effectively obstructs many individuals’ access to their entitlements. Women, older people, people who do not speak English and the disabled are more likely to be unable to overcome this hurdle.

While jobcentres offer online access, the rapporteur said that there is very little digital assistance available “and official policy is to keep ‘face-to-face’ help at a minimum”.

Serious implications

Charities warn such digital requirements could have serious implications for 3 million existing claimants, including thousands unable to work because of disability or illness, due to be moved over to UC from 2020. Initially, 10,000 people will be transferred in a pilot starting this July. They will then be followed next year by millions of people claiming disability and unemployment benefits.

Mental health charity Mind is concerned that vulnerable claimants may be left penniless when they have to make claims online, as the government has refused to transfer people over to the new system automatically.

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