Vulnerable universal credit claimants may struggle, say MPs
The introduction of the universal credit benefit system next year could leave the most vulnerable claimants struggling to cope, MPs have warned.
The Commons Work and Pensions Committee said it had "serious concerns" about how those without bank accounts and internet access would adapt to the new consolidated monthly payment.
The timetable for its implementation was "very ambitious", they added.
Ministers said the changes would make it easier for people to move into work.
In the biggest shake-up of the welfare system for years, the universal credit will replace a number of existing working-age benefits - the income-based jobseeker's allowance, income-related employment support allowance, housing benefit, working tax credit, child tax credit and income support.
The shake-up, intended to increase incentives to work, reduce in-work poverty and simplify the system, will be piloted in the north of England next April before being rolled out nationally for new claimants starting in the autumn.
- From October 2013 to April 2014, about half a million new claimants will receive universal credit instead of jobseeker's allowance, employment support allowance, housing benefit, working tax credit and child tax credit
- At the same time, another half a million existing claimants and their families will be transferred to the new credit when their family circumstances change significantly, for instance if they get a job or have another child
- From April 2014 a further 3.5 million claimants and their families will move to universal credit
- And from the end of 2015 to the end of 2017 a further three million people will be moved over, focusing on housing benefit claimants
Millions of existing claimants will be transferred onto the new system over a period of about four years, with the expectation that most people will apply for benefits and manage them online.
Nearly 80% of working-age benefit recipients say they already use the internet to make some claims.
The cross-party committee said it believed the majority of claimants would be able to access the new system and the shake-up would help "ease the transition" from benefits to work.
But, in a report on its implementation, the MPs said it was clear some people would have difficulty adjusting, while those used to receiving support each fortnight and budgeting accordingly would find it challenging moving to a monthly time span.
The committee is urging the government to address these issues before the pilots begin and then carefully monitor the impact on people of the changes from the outset.
Its recommendations, which will be debated in Parliament on Thursday, include:
- allowing claimants whose rental costs are currently paid directly to their landlord to continue this arrangement, should they wish, for a transitional period
- evaluating the impact on tenants of paying them their housing costs to identify those who are struggling and may fall into arrears and those for whom such a process is unsuitable
- ensuring there is a no fall in the value of support for the disabled, particularly if their circumstances change
- putting in place contingency plans for any glitches in the IT system to be used to calculate payments based on earnings
- future-proofing the delivery systems before the national rollout, to head off potential problems
- giving more support to advice groups and advocates to help people with claims
Labour MP Dame Anne Begg, who chairs the committee, said the government should reflect on the "possible consequences" of the shake-up on the most vulnerable and take action.
"We have serious concerns about about how more vulnerable people will cope with the changes, especially the online claims system and the proposed single monthly payment," she said.
"The measures the government plans to put in place to help these claimants may be difficult to access and slow in identifying whose these people are, with the risk that they fall into debt and hardship before extra support can be provided."
The government, she added, "should consider modifying its implementation timescale if those consequences cannot be adequately addressed before national rollout begins".
The government says there will be flexibility in how the universal credit is implemented - with people able to get help to claim over the phone or in person and to keep fortnightly payments - as well as transitional support for those who need it.
"Universal credit will be paid monthly and accessed online because that reflects the experiences of working people," a Department for Work and Pensions spokesman said.
"The system needs to make it easier for people to move into work, but we've been clear from the outset that we will take steps to ensure vulnerable people don't miss out. We're already working with councils and the financial industry on the best ways to support individuals."