The UK Government knew it’s flaghip new Universal Credit (UC) benefit was pushing vulnerable people into poverty and debt in 2017, an official study reveals.
A joint report from the Department for Work and Pensions (DWP) and HMRC looked at the impact of the new system on tax credit claimants who were moved to UC following a change in circumstances.
It found that nearly two-thirds (60%) of former tax credit claimants who were transferred to the new benefits system were struggling to keep up with bills.
And more than half of those surveyed for the report struggled to cope with the initial six-week wait for UC, which has since been reduced to five weeks but charities and campaigners say this is still too long to wait.
The reported, dated November 2017, was quietly snuck out by the DWP on Thursday morning, almost a year and a half after it was finished. The study took place between October 2016 and July 2017.
A section from the report reads: “Overall, 25% said they were having real financial problems and falling behind with many bills and commitments, 13% said they were falling behind with some commitments, and 13% said they were keeping up but it felt a constant struggle to do so.”
The then Work and Pensions Secretary David Gauke MP decided to press ahead with the roll-out of UC, despite almost certainly knowing about the report and its damning findings.
Margaret Greenwood MP, Labour’s Shadow Work and Pensions Secretary, questioned why the government has only chosen to publish the reports finding now.
“It is shameful that the Government’s own survey should find that nearly eight out of ten of those moving from Tax Credits to Universal Credit are struggling with their bills”, she said.
“Why has the Government only published these findings now, if the research was conducted between October 2016 and July 2017?
“Universal Credit should be helping people out of poverty; instead it is pushing many people into debt and towards food banks.
“The Government must take notice of its own research and stop Universal Credit as a matter of urgency before more people are pushed into poverty.”
Gillian Guy, chief executive of Citizens Advice, said: “This isn’t a surprise to us, despite the data being a few years old.
“This tallies with experiences of the people we’ve helped who have struggled financially when they’ve been moved on to universal credit.
“While the government has made some changes to support people moving on to universal credit since this research, these do not go far enough.
“Half of the people we help while waiting for their initial payment are unable to keep up with bills or rent.”
A spokesperson for HMRC said: “Since January 2018, customers can get an advance of up to 100% of their estimated monthly UC entitlement while they wait for their first payment.”
Last updated at 08:04 (GMT) on 5 April 2019.