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5 October 2018updated 09 Sep 2021 5:32pm

Three million people are about to be forced onto Universal Credit – with grim consequences

Foodbanks have seen a major increase in the proportion of Universal Credit-related referrals. 

By Garry Lemon

In this nation, when we get ill, we expect a doctor to address our symptoms. If a fire begins in our home, we expect the fire brigade to come along and put it out. These are problems – often beyond our control – that we have come together to take collective responsibility for. We pay our taxes and in return we expect support when we, or indeed our neighbours, need it most.

Similarly, in the event of family breakdown, illness, disability or any of the myriad combinations of circumstance that could lead to job loss or reduced income, we expect our benefits system to stave off destitution – to be the anchor that stops us being swept away by the tides of poverty.

As a country that believes in justice and compassion, we believe that no one should be left without enough to afford the absolute essentials in 21st century Britain. That is why the next stage of Universal Credit is so worrying.

Until now, only people making a new benefits application have been able to apply for Universal Credit. From next year, three million people currently depending on our old benefits and tax credits systems will receive a brown envelope on their doormats. This letter will say people’s current payments are to be stopped, and they must apply for Universal Credit. Because of the kind of benefits being rolled into Universal Credit, thousands of people with severe disabilities and physical or mental health conditions will be told that they must make a new application.

Even if everything goes to plan, every single person will be waiting at least five weeks for a first Universal Credit payment – if what we’ve already seen is anything to go by, we know they could be waiting much longer. 

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How would you handle five weeks with no money coming in?

The Department for Work and Pensions has published an initial plan for how this next stage of Universal Credit could look, and by the end of October it will have made a final decision on exactly what the process will look like.

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But this plan does not go far enough. Our new research today shows that over the last two years foodbanks in our network have seen a major increase in the proportion of referrals made for people moving onto Universal Credit.

Our fear is that the current plan will lead to millions of people losing the lifeline of income when they will be ill-prepared to cope. We’ve already seen serious problems at foodbanks across the country. However brief the gap in income in this stop-start process is, it will inevitably lead to financial problems, debt and a downward spiral for many of those undergoing the switch to Universal Credit.

In recognition of the sheer vulnerability of this huge group of people who are about to move onto Universal Credit, the Department has put in place “transitional protection”. This will top up Universal Credit so that no one is worse off when they move onto it. This move will make a real difference to the lives of hundreds of thousands of families and individuals who would otherwise have struggled on lower Universal Credit incomes, but only once they have waited five weeks to receive the new benefit, with the income gap that entails. 

In much the same way that we expect everyone who is able to take responsibility for finding work when supported by Universal Credit, so the government must look at its own responsibility. Sending letters telling people their current payments will stop and they need to make a new claim is just not good enough. We’re supportive of the principles underpinning Universal Credit – ensuring work pays and simplifying the complicated old system makes sense – but we must not allow the most crucial, founding principle of our benefits system to fall by the wayside; Universal Credit must anchor people from being swept into poverty.

If these plans don’t change, potentially hundreds of thousands of families will be left struggling to keep their heads above water. We can be sure that more people will find themselves in foodbanks. Policymakers and parliamentarians need to listen, now. If we don’t see lessons learnt and changes to the current plans, this will be their responsibility.

Garry Lemon is the director of policy and research at The Trussell Trust