‘Universal Credit needs an overhaul’

Universal Credit needs an overhaul as figures show many families are struggling to pay housing costs and risk eviction, according to a report by Citizens Advice.

The Government made some changes to the Credit, reducing the wait for the benefit to arrive from six to five weeks, but Citizens Advice says this does not go far enough. The charity says half of the people on the credit that it helped were in rent arrears or fell behind on their mortgage payments – the same number as when the wait for the first payment was longer.

Citizens Advice also found 60% of people it helped are taking out advances while they wait for payment.

The research also found, however,  that fewer people are falling behind on their bills or going without essentials during the wait period. This is in part due to an improved in payment timeliness – a sixth of people are not paid in full and on time, while previously it was a quarter.

The report, Managing Money on Universal Credit, also shows:

• Debt problems are more common for people on Universal Credit than those claiming benefits under the previous system,
• Nearly one in two (47%) have no money left after essential living costs (such as food, housing and transport) to pay creditors, or are spending more than they take in.
• More than 4 in 5 (82%) hold priority debt such as council tax, rent arrears or mortgage payments, and energy debts.

Citizens Advice is calling on the government to make Universal Credit far more flexible to fit around people’s lives and to make sure people have enough money to live on.

It also wants Alternative Payment Arrangements to be more widely available, allowing for rent to be paid direct to a landlord, more frequent payments, and a payment to go to both members of a couple.

Just 3% of claimants currently receive more frequent payments, while just 20 households in the UK receive split payments to different family members.

Four in 10 of the people helped by Citizens Advice are aware of managed payments to landlords, while just 1 in 6 know payments can be made more frequently.

Gillian Guy, Chief Executive of Citizens Advice, said:“Half the people we help with a Universal Credit claim are still struggling to keep a roof over their heads while they wait for their first payment.

“Changes to the waiting period for first payment have improved things for many people, but our evidence shows they don’t go far enough.

“Universal Credit must continue to be reformed so it works for all claimants and leaves people with enough money to live on.”

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