DWP told to make 14 radical changes to Universal Credit - here's what it means for your benefit payments
Some major changes are coming to the Universal Credit Scheme that is currently in use. According to a new parliamentary report, the current system is leaving households with less money than their entitlement. The Economic Affairs Committee in the House of Lords has completed its review of the welfare scheme and some changes have been recommended.
It was stated in the report that "The Government is using Universal Credit to recover debt-mostly £6bn of historic tax credit debt”
This system allows the deduction of up to 30 percent or more of the standard allowance from claimants, leaving fewer households with less money than they are entitled to.
Although the report revealed that the controversial scheme is currently “Failing millions of people”, a complete shut down of the scheme was not recommended since it still retains most of its original aims and objectives. Instead, the committee suggested a major shakeup and substantial reform.
According to the new report, up to 14 major changes were recommended regarding the design and implementation of the system. These changes will see to the wellbeing of the poorest in the society that are the most adversely affected by the current system.
One of the recommended changes is that payments should be fixed for three months. Under the current credit system, claimants receive their Universal Credit only once per month after the assessment of their finances for the previous month. The implication of this is that their payment for any given month may go up or down.
According to the report fixing the credit awards on the same level for at least three months will give claimants a certain level of security and certainty. This may encourage them to work for more than they would normally work since they are sure that an increase in income will not cause a reduction in their benefit.
Another recommendation is to give claimants a two-week grant. Currently, claimants will have to wait for a minimum of five weeks before they get their first payment. However, the new report noted that the five-week wait is a cause of insecurity in the Universal Credit systems as it disproportionately harms the vulnerable and increases their debt. Instead of following this method, the new system will see the DWP introduce a two-week initial grant to claimants which is non-payable.
Parts of the new recommendations is the possibility of making split payments. Unlike the previous system that only allows the credit to go into one account for each household, the committee recommends that there should be an option of separate payment for each person because the single payment account can exacerbate risks of financial coercion in certain scenarios and make it more difficult for individuals under any form of abuse to escape.
Lord Forsyth of Drumlean who was the chairman of the committee that reviewed the Universal Credit system said the committee report shows that the system needed a major revamp as more and more people have been relying on food banks to survive due to the failure of the system.