Budget: Government signals changes to Universal Credit scheme after criticism

Changes to the Government’s flagship welfare scheme are to be made after strong criticism that low income families were suffering.

Chancellor Philip Hammond announced that the wait for the initial payment for Universal Credit claimants will be cut from six to five weeks.

MPs, unions and charities have been warning that the six-week wait for claimants before receiving their first payment is unfair and has caused hardship.

Mr Hammond told MPs he had earmarked a £1.5 billion package to cut the waiting period for payments and announced moves to make it easier for claimants to receive an advance.

He said he would remove the seven-day waiting period so entitlement for Universal Credit starts on the day of the claim, adding that any household needing an advance can access a full month’s payment within five days of applying.

Mr Hammond said the repayment period for these advances – effectively a loan for struggling claimants – will also be extended from six to 12 months.

Work and Pensions Secretary David Gauke will unveil further details on changes to the welfare policy on Thursday.

The Chancellor said: “Universal Credit delivers a modern welfare system, where work always pays and people are supported to earn.

“But I recognise the genuine concerns on both sides of the House about the operational delivery of this benefit.”

Labour MP Frank Field, who chairs the Work and Pensions Committee, said: “These are the beginnings of a rescue package for Universal Credit.

“But by God does it need a rescue package.”

The Chancellor also announced that any new Universal Credit claimant in receipt of housing benefit will continue to receive it for two weeks.

The Treasury said this means that from April 2018 housing benefit will be paid for the first fortnight of Universal Credit claims, where otherwise it was stopped, meaning that 2.3 million households will be £230 better off on average.

Rosie Ferguson, chief executive of single parent group Gingerbread, said: “Cutting Universal Credit waiting times and extending the repayment period for advances are welcome changes for which Gingerbread has been calling, but it is the tip of the iceberg – with significant welfare cuts continuing to undermine the Government’s mantra that it will ‘make work pay’.”

Alison Garnham, chief executive of Child Poverty Action Group, said: “What happens to Universal Credit will shape the future for children in low-income and just managing families.

“The budgets of ordinary families will not be fit for the future until the work allowances in Universal Credit have been restored to support parents who want to bring home higher wages.”

Kamran Mallick, chief executive of Disability Rights UK, said: “Disability Rights UK welcomes the removal of the Universal Credit waiting period, but it is an inadequate solution that will still leave people waiting up to five weeks for their first actual payment.

“Every claimant should be able to receive fortnightly payments as of right, and not have to apply for a loan for money that they qualify for.”

Children’s Society chief executive Matthew Reed, said: “The six week waiting period for Universal Credit has been plunging families into hunger, destitution and problem debt.

“Cutting this by a week and extending advance payments – which immediately get families into debt – simply does not go far enough and it will leave too many parents desperately trying to find a way to feed their children and pay for other essentials.

“We believe that the longest anyone should have to wait to receive their entitlement to Universal Credit is two weeks and that, from then on, claimants should get payments weekly if that’s what they want.”

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