A Universal Credit inquiry | Part 1

With millions of people thrown out of work by the economic effects of the Covid pandemic, many are encountering the cruelty of the Tories’ reformed welfare system for the first time. What follows is the first part of a two-part article based on interviews carried out by Pete Cannell with Universal Credit recipients and with a welfare rights adviser.

Between 12 March 2020 and 8 October 2020 there were 3.7 million new claims for Universal Credit (UC), with the result that by the latter date, a total of 5.7 million people were registered as claimants. These numbers will continue to rise as the impact of the pandemic and the failure of the Westminster government to adopt a Zero Covid strategy bites even deeper. I spoke to one of the new claimants, and to a welfare rights advisor, about the human cost of the UC system.

A new claimant’s story

A is based in Cumbria. She went on to UC around the beginning of lockdown. She didn’t find the application stage easy and needed help from a friend who works for Citizens Advice. She is currently classified as medically unfit for work but the first stages of establishing this status were difficult, requiring the submission of evidence that wasn’t straightforward to get hold of. Apart from one initial face-to-face meeting, everything is online. A is reasonably confident with IT and has a computer and reasonable internet access – she can’t imagine how much harder the process would be for someone with any combination of limited digital skills, poor internet access, or being reliant on a mobile phone to get online. It took five weeks before she received any money. Looking back on the application process, A says:

I would not have been able to complete the process at all if I didn’t have the support from my friend at Citizens Advice, my mum, and also the evidence from health professionals and my family. These were invaluable and can’t be gained for some people. I almost feel I cheated the system somehow by not needing to have an interview, but they weren’t doing them at the time I was applying.

A comments that she would really struggle on the lowest rate of UC. She’s only able to manage because she receives a higher rate for health reasons. Because she is not having to look for work, A finds the routine of UC relatively unobtrusive. However, she does have to keep an online journal and gets email messages that ask her to log into the journal. She feels that she has had the relatively benign end of the UC experience, but nonetheless it has a heavy emotional impact.

A welfare rights and debt advisor’s story

B is a welfare rights and debt advisor based in Scotland. She works for an organisation that runs foodbanks. Over the time she’s worked in the role she’s always had a significant caseload of people who are in difficulties and need support, advice and guidance – often these problems are long-term. Since the onset of the pandemic, she has had an influx of new clients, many of whom are in financial difficulty for the first time in their lives. For some of them the situation is made worse because they have fallen sick and unwell.

B noted that the system encourages applicants to go into debt. Claimants are offered the ‘choice’ of waiting five weeks with no support or accepting an advance payment of up to one full month of their maximum UC. This can be up to a £1000, which must be paid back over at least 12 months.

She supports people through the process of applying for UC. Many of the people she helps have initially struggled to find support and need help with the application process. They face barriers as a result of low levels of digital literacy and poor internet access. To make the application they need a functioning email address and a bank account. They are also asked to produce forms of identification that they may not have or that they find technically difficult to provide. This has been made more difficult as everything has moved online, and it hasn’t been possible to visit the job centre to enable verification. There has been some relaxation, but the main method, Verisign, is dysfunctional and time-consuming. Claimants are asked to verify their status by enrolling with a credit reference agency, or use the passport office, a driver’s license or Barclays Bank. Three quarters of her clients don’t have these kinds of identification.

Basic levels of UC are inadequate. A £6 increase ion 6 April 2020 from £317.82 to £323.89 followed a five-year freeze. It went no way at all to bridge the gap or keep up with price inflation. In this context the temporary changes made during the pandemic by Chancellor Rishi Sunak did make some difference. An additional £20 a week, together with a reduction in the cap on deductions (money subtracted from a claimant’s UC payments because of their ‘debt’ from a prior advance or an overpayment) from 40% to 30%, was welcome. So was the temporary suspension of deductions at the start of the pandemic – but this was removed again in July 2020, and had an enormous negative impact. The increase also meant that some other payments – for example housing benefits – increased as well. Apparently, the uplift of local housing allowance will be permanent; this is welcome, and will alleviate tenants having to pay any previously large shortfall of rent out of their UC.

The Covid-19 temporary £20 per week increase in Universal Credit and working tax credits has enabled some low-paid working families with full-time jobs to get close to – or even just above – a minimum acceptable standard of living. This is with no frills – not by any means above relative poverty median levels.

If Sunak fails to make the £20 a week supplement permanent from April 2021, B believes that there will be a tsunami of debt, with a huge number of people pushed deeper into abject poverty. She has no words adequate to describe what would be a callous, cruel and deliberate act.

B concluded by reflecting on the human cost of the Universal Credit system. A large proportion of her clients have long-term health conditions; their mental health is poor and getting worse week on week. It’s common for her to have to support individuals on the brink of committing suicide. And advisors are overworked and exhausted and often have little or no support, although there is a support service for advisors run by Money Advice Scotland.