Benefits system ‘too inflexible and slow to support people’ during pandemic, report finds

The benefits system has been “too inflexible and slow to adapt to support people” at times during the coronavirus pandemic, a report has found.

The Government must increase the rates of legacy benefits to ensure people who have not yet moved on to Universal Credit do not unfairly miss out on support, the Work and Pensions Committee said.

It should also suspend a controversial policy that means people whose immigration status is not finalised cannot access welfare benefits.

The “no recourse to public funds” condition should be suspended “on public health grounds” while the country starts to recover from the coronavirus outbreak, it added.

Citizens Advice chief executive Dame Gillian Guy said “we strongly urge” the Government to accept the recommendations, warning that “it’s been people in the most vulnerable circumstances who’ve been hardest hit” by the crisis.

The committee, which is holding an inquiry into the impact of Covid-19 on people claiming benefits, also said it was “astonished” that there was no flexibility to suspend repayments of advances.

These are given as loans to help people through the minimum five-week wait for a first benefits payment, but charities have warned this can put people into debt.

While rates of standard Universal Credit and basic working tax credits have been raised by £20 a week for 12 months, those who have not yet been moved over to the new system have not received an uplift.

The Committee said it is “unacceptable” that people have been left to face hardship without the equivalent help “simply because of the outdated and complex way in which so-called legacy benefits are administered”.

The Department of Work and Pensions (DWP) received 2.9 million new universal credit claims between March 16 and May 26, almost doubling the number of claimants before the pandemic.

Committee chairman Stephen Timms praised the hard work of the DWP’s frontline staff, saying that without this “the impact of the pandemic could have been much worse”.

He continued: “But the coronavirus pandemic has highlighted weaknesses in a social security system which at times is too inflexible and slow to adapt to support people in times of crisis.

“The focus has mostly been on the unprecedented numbers of new claims for Universal Credit.

“But in the background, people on legacy benefits—including disabled people, carers and people with young families—have slipped down the list of priorities.

“It’s now time for the Government to redress that balance and increase legacy benefits too.

“It’s simply not right for people to miss out on support just because they happen, through no fault of their own, to be claiming the ‘wrong’ kind of benefit.

“At the same time, people whose immigration status leaves them with no recourse to public funds have been left with no support from the benefits system at all—and at risk of destitution and homelessness.

“Some have had to face the invidious choice between staying at home and facing financial ruin, for themselves and their children, or going to work and risking spreading the disease.

“The Government must suspend these rules for the duration of the pandemic.”

The total number of people who have no recourse to public funds is not known, but the Children’s Society estimates that it is at least one million and at least 100,000 children are affected.

A DWP spokesman said: “We rolled out measures that could be quickly and effectively put into place and that benefited those facing the most financial disruption.

“There have been more than 2.4 million new claims for Universal Credit since March 16 and the system has stood up to the test in a way which the paper-based legacy benefit system could not have, ensuring around 90% of people are paid in full and on time.

“We have made a number of changes to legacy and other working age benefits, such as increasing certain entitlements such as Local Housing Allowance, and introduced a range of additional measures to provide financial protection for those affected by Covid-19, including those with no recourse to public funds.”

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