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31 October 2017

The government’s own logic shows Universal Credit makes no sense

Controversial monthly payments are supposed to reflect the world of work. 

By Julia Rampen

Universal Credit, the new “simple” benefit that has made life infinitely more complex for those being moved onto it, comes in a monthly rather than fortnightly payment. Mounting evidence suggests claimants are finding it hard to budget over this time period, leading to debt and eviction notices, while the six week wait before the first payment is leaving some close to starvation.

The government, though, has maintained the idea that payments should be monthly. The reason for this, it argues, is because a monthly payment mirrors the world of work.

There’s only one problem. It’s not true.

The Resolution Foundation and Lloyds Banking Group examined bank transactions, and found that among new Universal Credit claimants who were jobless, 58 per cent were paid either fortnightly or weekly in their previous job. The vast majority of those – nearly half of all claimants studied – were used to being paid weekly.

It’s certainly the case that among all workers in all jobs, two-thirds are paid at the end of the month. But Universal Credit claimants aren’t all workers. They are the recently unemployed with little savings to fall back on (anyone with £16,000 in savings or more cannot claim in the first place), the low-paid workers previously receiving tax credits, and those unable to go into full-time work for caring or health reasons. 

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According to the government’s own logic, then, a system that reflected the world of work would pay claimants weekly, rather than monthly. Yet another reason to pause the roll out.