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23 November 2017updated 09 Sep 2021 4:23pm

Can changes to Universal Credit really stop homelessness?

“I'd have thrown myself off the ferry if I had money for the fare.”

By Imogen Groome

It’s indisputable that the gradual rollout of Universal Credit, the benefit that “makes work pay”, is causing a multitude of problems for its claimants.

Faced with increasingly desperate circumstances that rapidly decline after a claim for this benefit, people are forced to go to food banks, end up behind with rent and bills payments, and in some cases simply go hungry, get evicted – and even die while waiting for their claim to come through.

Tory ministers claim that such situations are few and far between, and that the benefit system is becoming more effective. Yet a food bank in Birmingham is bracing itself for an increase in demand as Universal Credit arrives in the West Midlands.

Philip Hammond announced a partial concession by the government during his Autumn Budget 2017. The built-in waiting period of the flagship benefit will be reduced by one week, meaning claimants should have to wait five weeks instead of six from February 2018. They will aso be able to ask for a month’s payment in advance (although this later needs to be paid back). From April 2018, claimants will also be able to receive housing benefit for two weeks after applying for Universal Credit. 

Shelter chief executive Polly Neate said: “For those at the lower end of the income scale, we were pleased to hear changes to Universal Credit including abolishing the seven day waiting period and allowing some people to claim housing benefit for the first two weeks of their new claim so they can continue to pay their rent.

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“Shelter and our supporters have been lobbying for extra help for those living in areas where the gap between housing benefit and private rent is highest so we are delighted the Treasury has listened to us and announced extra help for 140,000 households, through a Targeted Affordability Fund.”

But will these reforms really make it easier for claimants to access benefits without experiencing financial hardship?

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A glitch can make you homeless

Pre-Budget, when Tory ministers claimed that most people would have at least four weeks of wages to tide them over until their money is paid. This did not line up with the facts on the ground. The Resolution Foundation found that around half of Universal Credit claimants had been paid weekly, while MPs themselves can get advances of up to £4,000 when they start work. Meanwhile, housing associations warned of mounting arrears, with half of Universal Credit claimants at least a month behind on rent.

Susan, 58, from Birkenhead has worked all her life. Last year, during a time where she was trying to care for her elderly father and start a business, she was transferred from Jobseeker’s Allowance to Universal Credit.

During the built-in payment delay, she was plunged into poverty. “I was living off nothing,” she told me. “For five weeks, I was borrowing money from my dad, my sister, my son – and pride stopped me from telling them what it was really for. This was just for the essentials; food and toiletries.”

The Budget reforms are designed to plug the benefits gap that have left many like Susan with nothing. But what Hammond didn’t mention in his speech was that sometimes claimants aren’t even told advance payments exist.

“I only got told I could ask for an advance payment over a month into my wait, and only because it came up in conversation,” Susan said. “Even then, I only got £300. It wasn’t enough to cover my rent. And that’s when the eviction threat began.”

The Budget confirmed a more gradual roll out of Universal Credit. But will the fine print also include ensuring work coaches actually tell their claimants that financial aid is available?

Universal Credit is out of touch with reality in another way. Landlords can be untrusting of those on benefits because they know the payments are erratic and unreliable. “No DSS”, is a common condition of many rental advertisements. The chance of a Universal Credit claimant being able to “shop around” for other accommodation is virtually nil.

Will this change post-Budget? Unfortunately, even with the increased flexibility around the application process, the stigma around Universal Credit claimants is likely to remain. This is because there are still issues such as sanctions, cuts and maladministration to consider.

Even when landlords receive housing funds directly from the Universal Credit system, there are cases where repeated mistakes drive claimants into rent arrears and court proceedings.

In Susan’s case, she requested her rent was directly paid to her landlord, a housing association. Since she already had rent arrears, £63 a month was taken out of her payments. But then she discovered the association was not receiving the money. 

“I made over 20 calls to Universal Credit, and each time they would tell me the rent money had been sent, or they’d send an email asking to release it. Then I’d call the association and they’d tell me there was no trace of the payment,” she recalled.

“In the end, it got so stressful I handed in my notice – but I still got taken to court and had to pay another £300 for that.”

Hammond did not mention how he would improve administration errors. And Susan’s story is not unique – such cases are common across the country.

Even with the built-in payment delay reduced, claimants could still be faced with a heightened risk of homelessness under Universal Credit, because of the lack of protection in the rented sector.

The Housing Acts 1988 and 1996 state that landlords can issue a Section 8 – in layman’s terms, a claim for eviction – under Ground 8. This can happen when a tenant owes at least two months in rent both on service of notice and at the time of the court hearing.

A reduction in the built-in wait period for Universal Credit will reduce the likelihood of this situation happening. However, tenants can also be evicted under Ground 11 – the tenant has been persistently behind and inconsistent with rent payments.

If tenants are hit with sanctions, cuts in their allowance, or struggle due to administration errors – which are part of many claimants’ horror stories – people will struggle to pay the rent consistently. And landlords can use this as grounds for eviction.

Less easy to fix than waiting times

Maladministration can mean the wrongful shutting down of valid claims, that then take months to reinstate. Labour MP Frank Field described the errors, which left people severely behind with payments and attending foodbanks, as “some of the worst cases…I have ever seen in the welfare system”.

A Universal Credit claimant could be left a number of months without funds to pay for essential bills and rent – then wait another number of weeks for their first payment. By then, even with the one week reduction post-Budget, it’s likely a landlord will have enough grounds to press for eviction.

There is also an ongoing problem with the number of clients being declared fit for work, despite having serious health problems. Susan knows other people who were trapped in the Universal Credit cycle, and even died during the claim process. “One man, who was in a wheelchair, was sent a letter declaring him fit to work. It arrived at his door the day the police found him.” 

Then there are plans that will add additional struggles to the daily lives of Universal Credit claimants – the mass exodus of Jobcentres from the high street. Over the next seven months, we will see a continued rollout of Universal Credit, while 87 jobcentres close their doors. This means increased numbers of claimants forced to travel further to attend appointments, at a higher cost.

“While there are people on benefits who should go out and get a job, many of them are people who have worked all their lives, like me,” Susan said. “Jobcentres don’t even feel like workplaces. They’re full of advisers nattering away about their Christmas plans, while rows of tired-looking, hardworking people sit there with literally nothing.”

And of course, many won’t be able to celebrate Christmas this year the way they want to due to lack of funds. Susan struggled last Christmas on Universal Credit. “It’s not all about buying the flash TVs, the expensive gifts,” she told me. “But you want to get at least something – that just isn’t possible under this system.”

Susan was forced to move in with her son and his wife, and spoke of the impact this had on her mental health. “I would have got on the ferry and thrown myself into the Mersey,” she said. “But I didn’t even have the money to cover the fare, so I couldn’t.” She paused, and laughed dryly. “I suppose in that sense, Universal Credit saved my life. But in the most twisted way possible.”

“There’s no magic money tree,” Theresa May told a nurse earlier this year after she complained she had not had a pay rise in eight years – despite an increase in living costs. So why is it that the Conservative council responsible for Grenfell Tower, where at least 71 lost their lives, had stockpiled a £274m budget surplus and offered rebates to residents paying the higher end of the council tax scale?

There’s clearly money somewhere – but those at Grenfell didn’t see it when they died in the blaze. The anorexic mother who died in her freezing flat waiting for Universal Credit didn’t see it. The people forced to food banks under the built-in Universal Credit delay – regardless of its length – don’t see it. Those forced into rent arrears, inconsistent payments and eviction aren’t seeing it.

According to Shelter, over 250,000 people are homeless in the UK right now. How many of those people, between now and 2022 – when the benefit rollout that “makes work pay” is complete – will have a backstory that contains the words “Universal Credit”?