Is Universal Credit prepared for two million new claimants as winter arrives?

New research from Citizens Advice has found that out of 500 people surveyed who have applied for Universal Credit as a result of the coronavirus outbreak, more than half (53%) have faced hardship during the five-week wait for their first payment.

The charity, which is presented evidence on the five-week wait at last week’s Work and Pensions Committee, has supported almost 90,000 people with Universal Credit issues since the lockdown began.

June 10th was the final day employers could sign up their employees for the Job Retention Scheme. Citizens Advice is calling for urgent changes to the five-week wait given the potential for a new surge in claims as the furlough scheme unwinds.

Various forecasts of unemployment by the year-end range from 8 to 10 per cent – adding potentially as many as two million people to the Universal Credit system.  A report by the Learning and Work Institute says the “sharpest ever rises are taking unemployment to historic highs” and expects unemployment to reach 10 per cent or 3.3 million people in total.

Research from Citizens Advice shows one in seven surveyed (14 per cent) who’ve applied for Universal Credit since the lockdown hasn’t been able to afford essentials like food and heating while waiting for their first payment. Further to this, one in five (19 per cent) have borrowed money from family and friends.

Cases seen by the charity’s frontline advisers include people who have had to skip meals, rely on hot water bottles for warmth, and sell personal possessions for income during the five-week wait.

A hint of things to come came when a top government minister lashed out against a tirade of criticism against the Universal Credit system as figures revealed that more than a 250,000 new applications made during the Coronavirus pandemic have been refused by the Department for Work and Pensions (DWP).

Around 264,000 of the 800,000 applications made during the first two weeks of March were either rejected or closed and some are still waiting on a final decision from the DWP. Since then, up to 2.3 million households have made a fresh claim for Universal Credit since the start of the lockdown and as yet it is not known how many have been accepted or rejected.

Whilst many people used to dealing with Universal Credit have low expectations of how the system works, two million recently unemployed workers will expect the system to work properly and efficiently. They will especially expect the system to work in the midst of winter.

 

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