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A recent report by the think-tank Joseph Rowntree Foundation (JrF) has found that once the roll-out of Universal Credit is complete, 10.7 million people in “out of work families”, will be worse off. The report does say that 12.9 million in work, will benefit but, why are the most vulnerable taking the hit yet again?

The recent report by JrF seems to have gone largely un-reported by most of the press. Birmingham Live did however cover it as can be seen here.

The report titled; “Where next for Universal Credit and tackling poverty”says that;

“There continues to be a high risk that UC will fail to realise its potential and even increase hardship for some of those moving on to it in 2019 and beyond.

The reports main findings were as follows;

1. “UC is likely to reduce the number of people in poverty in working families by 300,000; but sweep 200,000 more people in out-of-work families into poverty.
2. “5.5 million people in poverty should see increases to their income, the majority in working families. However, it is not right that 3 million people in poverty are set to see their incomes reduced, the majority also in working families.
3. “The Government must also take more and faster action to speed up payments, increase the control claimants have over frequency and timing of payments, and ensure deductions for debt do not drive claimants into destitution.”

It must be noted that JrF are generally in favour of Universal Credit, as long as changes are made to the current system.

The think tanks latest study reports that while 300,000 families, (12.9 people) will be better off, 200,000 families (10.7 million people) will be worse off.

The Losers

Those who”ll be worse off are;

• 3.9 million people, in a family were nobody works.
• 6.8 million people, in working families were they’re either self employed or in private rented accommodation.

The issues around Universal Credit and self employment have long been known. The main issue being the so called “minimum income floor (MIF).”

This is the amount the Department for Work and Pensions (DWP) use when calculating self employed persons earnings. It works as follows;

They’ve decided that you must earn the national minimum wage at 35 hours a week, otherwise they’ll use the MIF. If you’re over the above amount they use your actual earnings.

This makes it incredibly difficult and sometimes impossible, to be self employed on Universal Credit. Basically you earn less one month but they don’t give you any help like they do to those on zero hour contracts.

Due to the shortage of social housing across the UK, more and more people are taking up private rented accommodation. The issue here is, the amount of housing support given on Universal Credit, often doesn’t cover the full rent amount.

So because of successive governments failure to build enough houses, your left picking up the pieces.

If you’re lucky enough to have children and happen to have more than 2, you’re also likely to feel the squeeze.

This is down the the government’s two child policy. Any family with a third child born after April 2017 will not get Universal Credit’s “child element,” (the replacement for Child Tax Credit).

This was meant to begin to apply to all children regradless of birth date but Amber Rudd cancelled that change in January. This means families with children born prior to April 2017 will receive the Child Element for all children, thus creating a two tier system.

The Winners

To quell any assetion I only cover the bad news it’s only fair I include those who will benefit from UC. “5.6 million people in working families are likely to see an increase in their incomes as a result of switching from the legacy system to UC.

Many of the people who gain will do so because they are either in social housing or emergency accommodation were the full rent is usually fully covered.

Those with two children or less are also more likely to gain depending on their living situation but, the report notes that this may not be enough to left 2 million people out of poverty.

What they advise

JrF gave several recommendation of which I think the DWP will enact zero.

They advised on the ending of the reliance of providing advances to claimants to tide them over until their first payment. This is something that has been raised by every Tom, Dick and Harry from here to Timbuktu.

The government don’t see putting claimants into debt from the begining as an issue. They just say they’ve listen and reduced the amount they recoup at a time to 30%.

That’s another point the study says needs to change. 30% doesn’t sound like much but when benefits aren’t rising with inflation but retail prices are, literally every penny counts.

I know the harsh reality of this. After bills, I was left with £10.50 a fortnight for my food shopping. So no that won’t change either.

It is suggested that they give claimants more flexibility on payments. In Scotland you already have this right automatically. However, in the rest if the UK you need to give a reason.

TIP; Say you have issues budgeting to receive flexible payments

There is a small scaled study underway by the DWP to assess flexible payments but it’s unclear if they will go forward with a full roll-out of the plan.

The final recommendation is another we,ll voiced issues. While Universal Credit will pay 85% of childcare costs, you have to magically find the money yourself first. The Work and Pensions Committee cited this as a barrier to work for in most cases women.

TIP: Amber Rudd announced in early 2019 that the DWP would use the Flexible Support Fund to help claimants with upfront childcare costs, and that this would not need to be repaid. However, take has been low as many work coaches don’t know about it. Now you do though.

In summary the JrF as they always do have tried their best to outline that Universal Credit can work. The fact it’s so far down the rabbit hole, the burrow’s caving in around it.

Nearly half of everyone who will end up on it will be WORSE off. The government aren’t going to change much as they think that it’s working and to be completely honest, the name Universal |Credit is so tarnished it isn’t savable.

The only thing Universal Credit is fit for is the scrap heap. We need a humane system that doesn’t punish people for being sick, disabled or in an area where finding work is difficult.