Half of all people who claim the Government’s flaship welfare reform Universal Credit are struggling to keep a roof over the heads, according to new research by a leading UK charity.
Citizens Advice says one in two people who were supported by the charity in claiming Universal Credit had fallen behind on rent or mortgage payments, despite the minimum waiting time for an initial payment being reduced from six to five weeks.
It was also found that 60% of people helped by the charity are asking for advances while they wait for their first payment to come through.
The report also reveals that debt problems are more prevelant among Universal Credit claimants than people claiming other forms of benefit, with 24% seeking advice for debt issues.
According to the report, 47% said they have no money left after essential living costs (such as food, housing and transport) to pay other bills, or are spending more than their total earnings.
More than 4 in 5 (82%) hold priority debt such as council tax, rent arrears or mortgage payments, and energy debts.
Citizens Advice are calling on the government to make ‘Alternative Payment Arrangements’ more widely available, so that housing costs can be paid directly to landlords.
They would also like to see Universal Credit paid more frequently, instead of once per month, and for payments to go to both members of a couple. Charities and others have expressed concerns that the current system can put some people at greater risk of financial abuse by their partners.
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.”
The charity’s new report, ‘Managing Money on Universal Credit’, looked at the experiences of 190,000 people who have been helped with Universal Credit.
Margaret Greenwood MP, Labour’s Shadow Work and Pensions Secretary, said: “This report makes clear that the Government has still failed to fix the fundamental flaws in Universal Credit that are causing many people such severe hardship.
“It cannot be right that people are being forced into debt and rent arrears by the five-week wait only to find it then cut to make repayments on their debts once they do.
“Tinkering at the edges is not enough, the Government must stop the roll out of Universal Credit now.”
A Department for Work and Pensions spokesperson said: “Most people on Universal Credit are happy managing their money, but budgeting support is available for anyone who needs extra help.
“Many people join Universal Credit with existing rent arrears, but this falls by a third after four months.
“We will continue to work closely with Citizens Advice and other stakeholders to develop our approach in order to provide the best possible support for all of our claimants.”