Supporting your clients around Universal Credit – what are the issues for you?
This month, the maximum rate at which debts can be recovered from universal credit (UC) was reduced from forty to thirty per cent. This ten percent drop is welcome, yet the reduced rate still means that claimants could lose almost a third of their income in debt repayment every month until those debts are repaid. That translates to a drop in income to just over £220 for claimants aged 25 and over, or a little over £50 a week.
Often debt happens simply because claimants have to wait five weeks before they receive their first payment of UC. With no income, claimants still have to pay council tax, bills, rent and food costs. That mounts up. Although claimants can apply for advance payments to help bridge this gap, this is a loan that has to be paid back, with deductions being taken from future payments. While there is no interest to be paid on this loan, it means that new claimants will start their UC claim in debt, which can take months to pay back and lead to reduced future payments until all the debt is cleared. This means that before people have even received their first payment, they are indebted. We hear from our members that having so little income is pushing people, including those in work, to rely ever more heavily on food banks for the very basics of life.
At the same time as managing their debt, perhaps experiencing the mental health issues often linked with debt, claimants still have to manage their UC claim. Our members across London tell us that, due to DWP’s digital by default regime claim, claim management is a major issue for many clients. One member told us that only around fifty percent of her clients have smart phones. And without a settled place to stay, just keeping the phone charged is a problem.
It’s not just the physical technology that presents a barrier. Many members are telling us that some clients’ levels of literacy and digital literacy means navigating the UC online portal is challenging. For others it’s impossible.
These are some of the issues raised by our members. We are currently being supported by the Trust for London to better evidence the impact of welfare change and identify areas where we can campaign for improvements.
Please take 5 minutes to tell us before 22nd November via this link.
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Sue Christoforou is a Policy Manager at Homeless Link.