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Two-thirds of large housing association’s Universal Credit claimants in arrears
Two-thirds of Peabody tenants on Universal Credit are behind on rent, compared with less than 40% not claiming the benefit, research by the housing association has found.
Of the 10,914 Peabody tenants on Universal Credit, 67% are in arrears and 24% are in arrears that surpass eight weeks’ rent. The average Universal Credit tenant in arrears owes £1,209, the study says.
In comparison, just 39% of Peabody tenants that are not on Universal Credit are in arrears and just 7% are in arrears above eight weeks.
The number of Peabody tenants claiming Universal Credit increased by 133% between March and October last year, which is largely in line with the national surge in claimants due to the COVID-19 pandemic.
A survey of 450 residents who became new claimants during this period found that a quarter waited longer than the government mandated five-week wait to receive their first payment.
Almost a third (29%) had to apply for an advance loan during this period, which means their payments are now docked each month until they repay the government.
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Peabody’s research also found that the number of job vacancies is London is 44% lower than in March 2020.
Just 15% of Peabody residents who lost their job due to the pandemic have found paid work again.
Housing association bodies, including the G15 group of which Peabody is a part, have urged the government to maintain the £20-per-week boost to Universal Credit that was introduced in response to the coronavirus pandemic in March last year.
The Spending Review published by The Treasury last summer indicated that the increase would not be kept in place beyond the current financial year and MPs recently voted against a motion by Labour to maintain the uplift beyond March.
Lord Kerslake, chair of Peabody, said: “That the Universal Credit system has not collapsed under the strain of millions of new applications is positive.
“However, the experience of the majority of people making a claim shows that the system is still failing to provide adequate support.
“The difficult times are set to continue for some time yet, so it is really important that the government gets a grip of the problems as other financial support winds down.
“We need clarity from ministers that the £20-a-week uplift will remain in place, but more changes are needed.
“Five weeks is too long to wait for money, loans just reduce people’s incomes in the longer term, and the system is still complex to navigate and riddled with errors.
“We urge ministers to bring forward a comprehensive improvement plan so that Universal Credit can provide the safety net that is desperately needed in these challenging times.”
A Department for Work and Pensions spokesperson said: “Universal Credit has delivered during this pandemic, providing vital support to millions when they needed it most and we remain committed to ensuring nobody is left behind.
“That’s why we’ve also raised the living wage, spent hundreds of billions to safeguard jobs, boosted that welfare support by billions and introduced the £170m Covid Winter Grant Scheme to help children and families stay warm and well fed.
“We’ve also taken unprecedented action to protect renters, including banning evictions, as well as increasing Local Housing Allowance rates.”
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