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Millions 'face benefit hardship' Stop benefit change, say Lib Dems
(about 22 hours later)
More than two million people who get social security benefits could be left without money for a week when the payment system is changed. A top Liberal Democrat has called on the government to cancel changes which will leave millions without their social security benefit for a week.
Those affected include lone parents, widows, and disabled and unemployed people who are paid weekly. Lone parents, widows, disabled and unemployed people paid weekly are to move to fortnightly payments.
Over two years they will be moved to a fortnightly cycle leaving them without a week's payment as the change is made. The Department for Work and Pensions says no-one will lose out as they will be offered a loan to cover the gap.
The Department for Work and Pensions will offer them loans and says no-one will lose out. But Steve Webb MP says he will ask Parliament to reverse the change when MPs return after Easter.
However, the Liberal Democrat shadow social security secretary Steve Webb MP told BBC Radio 4's Money Box programme: "The whole thing is going to cause huge disruption to people who are already having a hard time. The Liberal Democrat shadow secretary of state told BBC Radio 4's Money Box: "I was appalled when I heard the department was going to change the rules. It is driven by bureaucrats.
"To make them go without and then borrow the money back is bizarre. For the 12 weeks they are repaying the loan, they will be living on less than the poverty line." "The whole thing is going to cause huge disruption to people who are already having a hard time.
Arrears "There will be additional hassle as they apply for a loan to get the money they thought they were going to get anyway and then will be worse off for 12 weeks while they repay it."
At the moment most social security benefits are paid weekly in arrears with a few paid weekly in advance. For someone on basic Jobseeker's Allowance of £64.30 a week, it would mean a deduction from their benefit of £5.35 a week for 12 weeks.
Over the next two years they will all be moved to fortnightly payments in arrears, which for some time has been the standard way for Jobseeker's Allowance to be paid. 'Crazy'
When they are moved, they will be offered a loan of one week's money - which they will have to claim before the change is made.
The money will be repaid in equal instalments deducted from their next six fortnightly payments.
We want to make the process simpler and improve the service to customers DWP Minister Rosie Winterton
For someone on basic Jobseeker's Allowance of £64.30 a week, that would mean a cut in their benefit of £5.35 a week for 12 weeks.
About 120,000 widows who are currently paid weekly in advance will be moved in two stages - first to weekly payments in arrears when they will be given an extra week's benefit to cover the gap.About 120,000 widows who are currently paid weekly in advance will be moved in two stages - first to weekly payments in arrears when they will be given an extra week's benefit to cover the gap.
And secondly to fortnightly in arrears when they will be offered the loan.And secondly to fortnightly in arrears when they will be offered the loan.
We have tried to work out a system where we are simplifying it in a way that causes minimum disruption DWP Minister Rosie Winterton
Rosie Winterton, Minister of State at the Department for Work and Pensions told Money Box: "No-one will lose out as a result of the change but we want to make the [payment] process simpler and through that improve the service to customers.Rosie Winterton, Minister of State at the Department for Work and Pensions told Money Box: "No-one will lose out as a result of the change but we want to make the [payment] process simpler and through that improve the service to customers.
"We are moving to how most people in work are in paid - in arrears.""We are moving to how most people in work are in paid - in arrears."
And she said the loan would be affordable: "It is paid back in a very gradual way. What we have tried to do is work out a system where we are simplifying it in a way that causes minimum disruption."And she said the loan would be affordable: "It is paid back in a very gradual way. What we have tried to do is work out a system where we are simplifying it in a way that causes minimum disruption."
The process of converting customers began on 6 April and will continue over two years up to 31 March 2011. But Steve Webb said: "Lib Dems will be pressing for them to stop this change. We've got two years of hassle for people and Parliament has to say 'this is crazy, stop it'".
The process of converting people began on 6 April and will continue over two years up to 31 March 2011.
The new system has applied to all new claims from 6 April 2009.The new system has applied to all new claims from 6 April 2009.
BBC Radio 4's Money Box will be broadcast on Saturday 11 April 2009 at 1204 BST.BBC Radio 4's Money Box will be broadcast on Saturday 11 April 2009 at 1204 BST.
The programme will be repeated on Sunday 12 April 2009 at 2102 BST.The programme will be repeated on Sunday 12 April 2009 at 2102 BST.