Government urged to rethink Universal Credit as roll-out resumes

News09.05.227.00 AM by Lucie Heath

A number of major housing bodies are calling on the government to make a series of changes to Universal Credit as the roll-out of the benefit recommences today.

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A number of major housing bodies are calling on the government to make a series of changes to Universal Credit as the roll-out of the benefit recommences today #UKhousing

Social landlords are warning that many of their tenants are likely to be negatively affected by the transition away from legacy benefits and are asking the government to provide more support, particularly given the cost-of-living crisis.

The Department for Work and Pensions (DWP) is today resuming the roll-out of Universal Credit to households on older benefits, after the process was paused during the pandemic.

It now expects that all benefit claimants will be moved over to Universal Credit, which replaces six ‘legacy’ benefits including housing benefit, by 2024.

However, Rachael Williamson, head of policy and external affairs at the Chartered Institute of Housing (CIH), said the body is concerned about the timing of the plan, “given the growing cost-of-living crisis”.

She said moving people onto Universal Credit without additional safeguards “risks pushing many into hardship and debt” and urged the government to “pause its approach until it has addressed financial, safeguarding and well-being risks”.

Before COVID-19 hit, the government was running a pilot in Harrogate to test the process of moving people from legacy benefits to Universal Credit. This was paused in 2020 to prioritise the significant increase in the number of new Universal Credit claimants during the pandemic.

Ministers now plan to transfer the roughly 2.6 million households on legacy benefits to Universal Credit over the next two years. These households can either volunteer to be moved over to Universal Credit or will become part of a “managed migration”.

Jordane Shaw, external affairs manager at the National Housing Federation, said the body “welcomes” the DWP’s emphasis on making sure those who will be worse off on Universal Credit wait to claim, adding that it is “important” households can access impartial advice and are made aware that they will not receive transitional protection if they move over voluntarily.

“We would like to see funding available to support housing associations to continue providing essential guidance to tenants on their Universal Credit journey,” she said.

Geeta Nanda, chair of the G15 and chief executive of Metropolitan Thames Valley Housing (MTVH), said MTVH and other G15 members have increased the number of colleagues available to provide specialist advice to tenants.

The restart of the transition to Universal Credit comes amid soaring inflation. Last week, the Bank of England predicted that inflation will increase to 10% by the end of this year.

However, Universal Credit has been increased by just 3.1% this year, while households no longer benefit from the £20 weekly uplift that was introduced during the pandemic.

Ms Nanda urged the government to consider uprating social security payments, including Universal Credit, to better reflect rising costs.

In March, a survey of over 700 tenants by Riverside found that a third of residents who had made a new Universal Credit claim since the start of the pandemic have had to use food banks while waiting for their first payment, which takes five weeks to come through.

Research by the housing association also found that the rent arrears of households in receipt of Universal Credit is more than three times higher than those on housing benefit or those who don’t receive any support to pay their rent.

Hugh Owen, director of strategy and public affairs at Riverside, said the landlord “broadly welcomes the streamlining of benefits and managed move to Universal Credit”, but said the government must ensure it “mitigates the impact of the switch and prevents it from dragging people into debt”.

Riverside is calling on the government to reduce the five-week wait and change the advance payment system by removing housing costs from any advance and triggering an automatic payment to the landlord.

“These are two simple changes which could fundamentally improve the system to help people better manage their finances and stop thousands from spiralling into rent arrears, ultimately preventing evictions,” he said.

A DWP spokesperson said: “Over five million people are already supported by Universal Credit. It is a dynamic system which adjusts as people’s earnings change, is more generous overall than the old benefits, and simplifies our safety net for those who cannot work. Roughly 1.4 million people on legacy benefits would be better off on Universal Credit, with top up payments available for eligible claimants whose Universal Credit entitlement is less.”