Government urged to make changes to Universal Credit scheme
The Work and Pensions Select Committee said cutting the waiting time would remove a “major obstacle” to the success of the policy.
Theresa May faced further pressure to make major changes to the Government’s flagship welfare reform as an influential committee of MPs called for the waiting time for Universal Credit (UC) to be cut.
The cross-party Work and Pensions Select Committee said there was evidence that the six-week wait before claimants receive their first payment was causing “acute financial difficulty” and should be reduced to one month.
The committee said cutting the waiting time would remove a “major obstacle” to the success of the policy.
The delay between people making a claim and receiving their first payment is designed to mimic waiting for a first pay cheque after starting a job.
But Tory Work and Pensions Committee member Heidi Allen said: “Despite the clear support for Universal Credit, there is cross-party recognition that the six week wait does not honour the original intentions of the system.
“To truly represent the world of work, the payment cycle must mirror how the majority of people are paid i.e. monthly.
“Universal Credit will only be the success it deserves to be if it works with claimants to find work, and not against them.”
The committee said that advance payments, loans typically repayable over six months via deductions from UC, could “mitigate some of the unwelcome consequences of the current design of Universal Credit, but they do not address their underlying foundations”.
The report concluded: “The baked-in six week wait for the first payment in Universal Credit is a major obstacle to the success of the policy.
“In areas where the full service has rolled out, evidence compellingly links it to an increase in acute financial difficulty.
“Most low income families simply do not have the savings to see them through such an extended period.”
Mrs May defended the UC programme at Prime Minister’s Questions on Wednesday under pressure from Labour leader Jeremy Corbyn.
She acknowledged that people had raised concerns with UC and stressed “we have been listening to those and changes have been made”.
The programme is aimed at replacing six different benefits with a single payment, making the system simpler to understand and administer.
Some 8% of current benefits claimants are on UC, which will increase to 10% by the end of January with the roll-out due to be completed by 2022.
Work and Pension Committee chairman Frank Field said the waiting period for the first payment was “cruel”.
“No one can give us any real justification for it,” the Labour MP said.
“Such a long wait bears no relation to anyone’s working life and the terrible hardship it has been proven to cause actually makes it more difficult for people to find work.
“It is not too late for the Government to avert a Christmas disaster.
“They must act now.”