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Universal Credit gets a revamp in Autumn Budget

Wednesday 22 November 2017

Amid growing criticism at the way the introduction of Universal Credit as replacement to the six previous benefits, has caused suffering to many claimants and fear of increased homelessness as a result, Chancellor Philip Hammond has finally bowed to the pressure from other politicians and lobbying groups, including ARLA Propertymark.

We've raised concerns with the Government for some time now over Universal Credit payments not being processed quickly enough, which can cause distress and hardship to claimants, and has also led to some landlords deciding not to rent properties to those in receipt of the benefit.

Addressing a packed out House of Commmons, Chancellor, Philip Hammond said:

"...I recognise...the genuine concerns on both sides of the house about the operational delivery of this benefit, and today we will act on those concerns.

"First, we will remove the seven day waiting period applied at the beginning of a benefit claim, so that entitlement to Universal Credit will start on the day of the claim."

"To provide greater support during the waiting period we will change the advances system to ensure that any household that needs it can access a full months payment within 5 days of applying.

"We will make it possible to apply for an advance online. we will extend the repayment period for advances from six months to 12 months, and any new Universal Credit claimant in receipt of Housing Benefit at the time of the claim will continue to receive that housing benefit for a further two weeks, making it easier for them to pay their rent." Secretary of State for Work and Pensions will provide further details in a statement to the house tomorrow. 

Mr Hammond also promised to increase targeted affordability funding over by £125million over the next two years in areas where rents have risen most, benefiting 140,000 people.

The government provided further detail in the Autumn Budget Policy Paper about how they will provide more support to Universal Credit claimants:

  • from January 2018 those who need it, and who have an underlying entitlement to Universal Credit, will be able to access up to a month’s worth of Universal Credit within five days via an interest-free advance. The government will extend the period of recovery from six months to twelve months, making it easier for claimants to manage their finances. New claimants in December will be able to receive an advance of 50% of their monthly entitlement at the beginning of their claim and a second advance to take it up to 100% in the new year, before their first payment date

  • from February 2018 the government will remove the seven-day waiting period so that entitlement to Universal Credit starts on the first day of application

  • from April 2018 those already on Housing Benefit will continue to receive their award for the first two weeks of their Universal Credit claim 

  • the government will also make it easier for claimants to have the housing element of their award paid directly to their landlord

To support these changes the government will roll out Universal Credit more gradually between February 2018 and April 2018, and roll-out to all jobcentres will be complete in December 2018.

Universal Credit also offers new opportunities to support people in low-paid work to progress in the labour market. The Budget allocates £8 million to trial innovative approaches to help individuals on Universal Credit to earn more.

The Government have also said that the taper rate will be kept under review and the Government will continue to consider the case for further changes. 

Results from previous ARLA Propertymark surveys have shown that members believe that the option to have Universal Credit paid directly to landlords would also help minimise delays in getting money to landlords, so Philip Hammond's announcement that the Government has now taken measures to address this issue is very welcome news. 

We would now like the Government to look at giving claimants a choice as to whether they are paid monthly or twice monthly which could help make it easier for claimants to budget according to their individual circumstances.

One aspect of our proposals that wasn’t addressed by the Budget is our suggestion for the Government to look at giving claimants a choice as to whether they are paid monthly or twice monthly which could help make it easier for claimants to budget according to their individual circumstances; something which the Scottish Government have already implemented.

For help understanding Universal Credit, download our Fact Sheet, available exclusively to members. Please note: We will update our fact sheets very shortly to reflect the very latest information regarding the changes announced at the Budget and will also update this article following any further information which is expected to follow from the Government today.