The DWP has announced that benefit claimants struggling to pay their bills will be able to get cash advances upfront, Work and Pensions Secretary David Gauke has said. The government has recognised concerns that people moving on to Universal Credit had to wait six weeks to be paid.
The Minister announced he will introduce refreshed guidance that ensures an advance payment will be offered up front to anyone who needs it and paid within five working days.
In response to the developments, Chief Executive of Citizens Advice Gillian Guy said “It is reassuring to see that David Gauke recognises there are problems with Universal Credit, and his commitment to making sure people can access advance payments is welcome. However, we are disappointed he has not taken this opportunity to pause the roll-out to ensure the problems are fixed before it speeds up significantly.”
“Evidence from Citizens Advice and others – including the DWP itself – shows many people risk getting into serious debt as a result of delayed first payments. Advance payments can help people make ends meet during this period, but they must be combined with more action to reduce the number of people waiting more than six weeks for their initial payment. The government also need to make sure people have access to the support they need to help them adapt as they move onto the new benefit.”
“We will continue to closely monitor the effect of Universal Credit on issues such as debt and rent arrears as the roll-out continues, and are committed to working with the DWP and others to ensure the new system works for everyone.”
Citizens Advice has helped people with over 100,000 issues with Universal Credit, and in August the equivalent of 12% of people applying for the benefit turned to the charity for help.
In a report published last month Citizens Advice analysed over 50,000 cases where it has helped people with their debt problems and found that for those on Universal Credit:
79% have priority debts such a rent or council tax, putting them at greater risk of eviction, visits from bailiffs, being cut off from energy supplies and even prison – compared to (69%) on legacy benefits such as Jobseekers Allowance or Housing Benefit.
2 in 5 (41%) have no money available to pay creditors as their monthly spend on essential living costs is more than their income.
Typically people on Universal Credit only have around £3 a month left to pay creditors.
These findings were confirmed by figures from the Department for Work and Pensions (DWP) showed 1 in 5 people applying for Universal Credit are waiting longer than six weeks for their first payment and further DWP research which showed people on the new benefit are falling into rent arrears, with over 2 in 5 saying this was due to problems with the benefit.
Citizens Advice is urging the government to ensure no one applying for Universal Credit waits longer than 6 weeks for an income, and that anyone who needs it gets a payment within 2 weeks that they do not need to repay.