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| Universal credit wait reduced to five weeks | Universal credit wait reduced to five weeks |
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| Tories welcome changes to hardship loans and housing benefit but Labour calls for welfare rollout to be paused and fixed | |
| Rowena Mason Deputy political editor | |
| Wed 22 Nov 2017 17.27 GMT | |
| Last modified on Sat 2 Dec 2017 17.47 GMT | |
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| Universal credit claimants will only have to wait five instead of six weeks for their first benefit payments after Philip Hammond bowed to pressure to ease hardship caused by the new welfare system. | Universal credit claimants will only have to wait five instead of six weeks for their first benefit payments after Philip Hammond bowed to pressure to ease hardship caused by the new welfare system. |
| Conservative MPs had threatened to revolt over the suffering caused by the long wait, which charities and councils have said was leading to evictions and increased use of food banks. | Conservative MPs had threatened to revolt over the suffering caused by the long wait, which charities and councils have said was leading to evictions and increased use of food banks. |
| The chancellor will also allow housing benefit to continue for an extra two weeks after the start of a universal credit claim to reduce the threat of eviction. | The chancellor will also allow housing benefit to continue for an extra two weeks after the start of a universal credit claim to reduce the threat of eviction. |
| However, the changes will not come in time to help claimants struggling before Christmas, as they only take effect from next year. | However, the changes will not come in time to help claimants struggling before Christmas, as they only take effect from next year. |
| His U-turn was partially welcomed, but Labour and other opposition parties said it did not go far enough in addressing problems with the new system, which is designed to roll six existing benefits into a single monthly payment. | His U-turn was partially welcomed, but Labour and other opposition parties said it did not go far enough in addressing problems with the new system, which is designed to roll six existing benefits into a single monthly payment. |
| Jeremy Corbyn, the Labour leader, called on the government to “pause and fix” the rollout instead of making minor changes, as people were still facing delays with their claims and threats of eviction. | Jeremy Corbyn, the Labour leader, called on the government to “pause and fix” the rollout instead of making minor changes, as people were still facing delays with their claims and threats of eviction. |
| Under the measures announced in the budget, the chancellor cut the time people have to wait for their first payment by seven days and promised that hardship loans could be repaid over a year rather than six months. | Under the measures announced in the budget, the chancellor cut the time people have to wait for their first payment by seven days and promised that hardship loans could be repaid over a year rather than six months. |
| The measures to ease the financial difficulties of new claimants amount to about £300m a year. In the small print of the budget book, it was revealed the rollout of universal credit was being slowed down, with a more gradual introduction to jobcentres by December 2018. | The measures to ease the financial difficulties of new claimants amount to about £300m a year. In the small print of the budget book, it was revealed the rollout of universal credit was being slowed down, with a more gradual introduction to jobcentres by December 2018. |
| Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits. | Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits. |
| The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule. | The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule. |
| The original design set out a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress. | The original design set out a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress. |
| Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks. | Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks. |
| Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. | Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. |
| The dozen Conservative MPs who fought for changes to the system were delighted with the one-week reduction after the government had initially refused to reduce the wait. | The dozen Conservative MPs who fought for changes to the system were delighted with the one-week reduction after the government had initially refused to reduce the wait. |
| David Gauke, the work and pensions secretary, had defended the working of the system as recently as Tory party conference in October, announcing only minor changes to the hardship loans at the time. | David Gauke, the work and pensions secretary, had defended the working of the system as recently as Tory party conference in October, announcing only minor changes to the hardship loans at the time. |
| Heidi Allen, the Conservative MP leading the calls for change, said the announcement was “a victory for common sense and compassion”. | Heidi Allen, the Conservative MP leading the calls for change, said the announcement was “a victory for common sense and compassion”. |
| She told the Guardian: “The government had struggled to technically get the system to reduce any further than five weeks, but what they have done instead, by offering housing benefit to be carried across for two weeks, is tremendous. All the risks of homelessness and rent arrears, it deals with it straight away.” | She told the Guardian: “The government had struggled to technically get the system to reduce any further than five weeks, but what they have done instead, by offering housing benefit to be carried across for two weeks, is tremendous. All the risks of homelessness and rent arrears, it deals with it straight away.” |
| Iain Duncan Smith, the former work and pensions secretary who was behind the introduction of universal credit, said: “The chancellor is absolutely right to make advances more readily accessible for claimants waiting for their first instalment of benefits. No one should have to wait excessive periods to receive their first payment.” | Iain Duncan Smith, the former work and pensions secretary who was behind the introduction of universal credit, said: “The chancellor is absolutely right to make advances more readily accessible for claimants waiting for their first instalment of benefits. No one should have to wait excessive periods to receive their first payment.” |
| However, opposition parties, charities and trade unions were underwhelmed by the changes. | However, opposition parties, charities and trade unions were underwhelmed by the changes. |
| Frances O’Grady, the general secretary of the Trades Union Congress, said it was a “small step forward, but big changes are needed or working people will be left thousands of pounds a year worse off”. | Frances O’Grady, the general secretary of the Trades Union Congress, said it was a “small step forward, but big changes are needed or working people will be left thousands of pounds a year worse off”. |
| Corbyn said the verdict on the frontline was that food bank use increases 30% wherever universal credit is rolled out. | Corbyn said the verdict on the frontline was that food bank use increases 30% wherever universal credit is rolled out. |
| “This chancellor’s solution to a failing system causing more debt is to offer a loan. And the six-week wait, with 20% waiting even longer, becomes a five-week wait,” he said. | “This chancellor’s solution to a failing system causing more debt is to offer a loan. And the six-week wait, with 20% waiting even longer, becomes a five-week wait,” he said. |
| “This system has been run down by £3bn cuts to work allowances, the two-child limit and the perverse “rape clause”; and caused evictions because housing benefit isn’t paid direct to the landlord. So I say to the chancellor: put this broken system on hold, so it can be fixed, and keep a million more children out of poverty.” | “This system has been run down by £3bn cuts to work allowances, the two-child limit and the perverse “rape clause”; and caused evictions because housing benefit isn’t paid direct to the landlord. So I say to the chancellor: put this broken system on hold, so it can be fixed, and keep a million more children out of poverty.” |
| Stephen Lloyd, the Liberal Democrat work and pensions spokesman, said the rollout “must be paused before even more of our most vulnerable citizens are made to suffer on the ideological anvil of this Conservative government”. | Stephen Lloyd, the Liberal Democrat work and pensions spokesman, said the rollout “must be paused before even more of our most vulnerable citizens are made to suffer on the ideological anvil of this Conservative government”. |
| Universal credit | |
| Benefits | |
| Budget 2017 (November) | |
| Welfare | |
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