Universal benefit changes driving more people to doorstep loans says debt manager
The woman who heads up a debt management service in the Northern Ireland town where Universal Credit will be first implemented tomorrow has expressed serious concerns about the impact the new social security system will have on the area.
Myra McKeown is the manager at Step Change within Limavady Community Development Initiative (LCDI) and says the introduction of Universal Credit is already steering more and more people into greater debt.
Universal Credit is the overarching form of social security that has replaced the six strands of payment that made up the previous benefits system. It will replace Jobseeker's Allowance, which was support based on income; Employment and Support Allowance, which was also related to income; Income Support; Child Tax Credits; Working Tax Credits and Housing Benefit.
The system was first announced by Work and Pensions Secretary Iain Duncan Smith in 2010 with the stated aim of bringing "fairness and simplicity" to the British Social Security system.
However, speaking to the Belfast Telegraph, Myra McKeown said: "Already the introduction of this system is pushing people towards more debt. The switch also from Disability Living Allowance (DLA) to Personal Independence Payment (PIP) and the assessment process involved is also causing hardship and anxiety.
"People are being left without money and so are resorting to taking out doorstep loans. We estimate that the average household is losing around £60 per month. That's £720 per year, which is a lot to those on benefits," she said.
The North West town perenially ranks second only to Londonderry in terms of Northern Ireland's worst unemployment rates.
Step Change estimates the current level of debt being dealt with at the Limavady-based centre is around £4.5m.
Ms McKeown also expressed concerns that applications can only be made digitally, leaving some people potentially unable to do so.
"People are also used to getting money either weekly or fortnightly, but the new system is monthly and they are not ready to handle it, as they haven't had to budget like this before," she said.
One young man from the area said he is very worried by the new system. Dylan Young (20) has a learning difficulty and told the BBC: "I would love a job but I have no qualifications. I tried, but there is no hope for me. I'm worried about the changes and that if I lose my money I won't be able to live."