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Welsh Minister expresses concerns over Universal Credit

Wednesday 18 July 2018

Housing and Regeneration Minister at the Welsh Assembly, Rebecca Evans AM has written to the Secretary of State for Work and Pensions Esther McVey, with concerns surrounding the impact Universal Credit (UC) is having on some of Wales’ most vulnerable people.

In the letter, the Assembly Member stated that, “foodbank use in areas where Universal Credit has been rolled out has increased by 30% according to National Audit Statistics, compared to a 12% increase in non-Universal Credit areas. This is extremely worrying”.

Evans backed up the statistics with figures from Esther McVey’s Department for Work and Pensions (DWP) UC claimant survey. Which indicated that four out of ten claimants were experiencing financial difficulties, and 46% needed help to make their claim online.

Universal Credit replaces six existing benefits (Income-based Jobseeker’s Allowance; Income-related Employment and Support Allowance; Income Support; Child Tax Credit; Working Tax Credit; Housing Benefit or Local Housing Allowance). The new system is based on a single monthly payment (rather than every two weeks) paid in arrears directly to a bank account. Payments include all eligible housing costs meaning that claimants will be responsible for paying their rent themselves.

The Housing and Regeneration Minister is calling for the DWP to provide ‘Universal Support’ for UC claimants who struggle with their finances, as well as those, “who are struggling with digital access”.

The letter also indicates that local authorities, housing associations and private landlords are seeing an increasing number of rent arrears since the introduction of UC. This is despite measures announced by the Chancellor of the Exchequer Phillip Hammond last November. Since January this year, UC claimants have been able to access up to a month’s worth of the benefit within five-days via an interest-free advances.

In February, the Government removed the seven-day waiting period for claimants, which means their entitlement for UC starts on the first day of application. Significantly, the Chancellor also announced that it was the Government’s intention to make it easier for claimants to have the housing element of their award paid directly to their landlord. Despite this, Rebecca Evans has said that the issues arising chime, “with many concerns raised and reported to me by the housing sector in Wales”.

The most vulnerable people in society are who the AM thinks are being most affected by Universal Credit. The Housing and Regeneration Minister stated in her letter, “the National Audit Office highlighted that the system is lacking in ways to identify vulnerable people, which makes it difficult to see how they are getting the right support, from the outset when they apply for UC”.

The letter acknowledges that whilst alternative UC payment arrangements are available for the most vulnerable in society, there is inconsistency in the way this is offered to claimants. From the DWP claimant survey, it was revealed that 48% had to request these alternative payment arrangements themselves as opposed to, “being offered it proactively”.

ARLA Propertymark is on the DWP Strategic PRS Landlord Group, and we continue to actively lobby the government to make urgent changes to the benefit. We have long raised concerns with the Government over UC payments not being processed quickly enough, which can consequently lead to some landlords opting not to let to those in receipt of the benefit.

Previous ARLA Propertymark surveys indicated that our members believed that it would be beneficial for the housing element of UC to be directly paid to landlords. ARLA Propertymark proposed this to the Government, and it was acted upon in the Autumn Budget Policy paper last year.

ARLA Propertymark believe that the Government should consider giving claimants a choice as to whether they’re paid monthly or twice monthly, which would make it easier for claimants to manage their budgets more effectively to their individual circumstances. This is something which has already been implemented by the Scottish Government.

Earlier this month the DWP informed us of updates to Universal Credit, including: Managed Payment to Landlords, Universal Credit for couples and Work Allowance rate changes.

Read the Department for Work and Pensions guidance document, ‘Universal Credit and rented housing: guide for landlords’ here.

Universal Credit is currently being rolled out in stages across the UK by postcode area. Log into the members’ area to download our Fact Sheet.