Ipswich Unemployed Action.

Campaigning for Unemployed Rights.

Archive for the ‘Tories’ Category

Benefits Freeze Adds to Universal Credit Misery.

with 101 comments

Image result for universal credit cartoon

More than the usual ‘system error’.

The controversy about Universal Credit continues to develop.

Today the Currant Bun, not the Claimants’ chum,  headlines

Universal Credit revolt by THIRTY Tory MPs as they urge Chancellor to plug £2bn black hole which will leave millions worse off.

At least two dozen have signed a letter to the Treasury highlighting their fears to the Chancellor – urging him that an extra £2billion is needed for the reform.

Around a million people are expected to go onto Universal Credit next year as part of the rollout to everyone over the next five years.

The letter reads: “As it stands 3.2million working families are expected to be worse off, with an average loss of £48 a week.

“Enabling hard working parents to keep more of what they earn and thus encouraging them to take up more work is at the heart of Conservative policy.

“This measure would boost the incomes of 9.6million low income parents and children.”

In July 2015, having promised £12 billion of welfare cuts – reportedly on the assumption that the Liberal Democrats would argue this down – George Osborne announced exactly that. Chief among these cuts was a further working age benefits freeze. So no matter what the rate of inflation was, benefits would not be increased in April 2016, 2017, 2018 or 2019.

One thing that risks being forgotten is the impact of the Benefit Freeze.

Last week (October the 13th) the Resolution Foundation published this.

Despite ‘the end of austerity’, April promises another deep benefit cut

Adam Corlett.

How important this nominal freeze would prove to be couldn’t be known exactly in advance – only predicted – as its real impact depends on inflation. At the time, it was thought that inflation would be below 2 per cent in every year, as the table below shows. At first, the inflation forecast actually proved too high, with very small price rises in 2015 and 2016. This meant that the benefits freeze had only a limited impact in its first two years. But with the Brexit vote and resultant price increases, CPI inflation reached 3 per cent in September 2017. Normally, that September figure would have been used to uprate working-age benefits for the next tax year but, due to the freeze, that didn’t happen. And now inflation for September 2018 is expected to be around 2.7 per cent. Working-age families will again be denied that inflationary benefits increase next April.

Overall, the real cut to many benefits from the four-year freeze is over 6 per cent (and that’s before considering separate or earlier cuts).

….

If we exclude pensioners and working-age non-parents, the impacts become even clearer. The average couple with kids in the bottom half of the income distribution will be £620 poorer in 2019-20 than if inflationary uprating had occurred since 2016-17, and the average poorer single parent will be £760 worse off. The April 2019 freeze alone will mean a £210 hit for an average poorer couple with kids and £260 for poorer single parents.

This chart is depressing to look at.

This, the long-term decline in the value of benefits, is significant.

Corlett’s conclusion is important:

Whether or not the final freeze goes ahead, there is also a tough question for the opposition parties. Labour, the SNP and the Liberal Democrats have all said they would end the freeze. But CPI uprating is already set to return from April 2020. The big question is whether those parties would actually undo the real term cuts that have already happened (i.e. though a real terms increase) if they got the chance, or if that £5 billion, 6 per cent cut will simply be accepted as a fait accompli.

The talk of the town may be of ‘the end of austerity’ and ‘Brexit dividends’, but for low to middle income working-age families – particularly parents – the outlook is quite different. On top of weak pay growth, their outlook includes a further benefits freeze, the transition to Universal Credit with its slashed work allowances, the phasing out of the valuable ‘family element’ and phasing in of a two-child limit. Ending the freeze one year early, with benefits rising just after Brexit day, would help to turn that outlook around.

This is exactly the issue, what exactly would the parties do to repair the damage caused by the benefit freeze?

Advertisements

Written by Andrew Coates

October 15, 2018 at 10:30 am

As Revolt Against Universal Credit Grows Esther McVey Tries to Ban Charity Critics.

with 77 comments

Image result for esther mcvey glamour photo

Esther McVey: Needs Protection for her “standing and reputation”.

The world has turned against Universal Credit.

You know that when Gordon Brown attacked it, saying, “Halt universal credit or face summer of discontent” and and was followed by fomrer Tory PM, John Major rubbishing the hare-brained scheme.

And the Tory papers jumping on the bandwagon.

Not to mention yer actual present day Tory MPs:

The House of Commons,

Tory backbenchers have urged the government to slow down the roll out of universal credit. The new all-in-one benefit, which replaces six existing benefits, is being introduced gradually, but in areas where it has been implemented there have been multiple complaints about people being impoverished by having to wait for money. In an interview on the World at One, Nigel Mills said:

If you have any doubts that we can make it work for these volumes, let’s slow down. Let’s not get this wrong for the sake of sticking to a timetable.

Another Tory backbencher, Johnny Mercer, said UC was “politically undeliverable” in his Devon constituency, and called for a planned increase in income tax thresholds to be scrapped in order to make the benefit more generous. The MPs spoke out as Esther McVey, the work and pensions secretary, said some claimants would be worse off under UC, despite Downing Street saying otherwise. (See 4.59pm and 5.04pm.)

Guardian.

One of the things that stuck in the craw was McVey’s claim that if people lost money under Universal Credit they could always earn the shortfall by working more.

But, there you go….

Then there was this yesterday (Independent):

Some people “could be worse off” when they switch to universal creditEsther McVey has admitted – directly contradicting Theresa May’s pledge to “protect” them.

The work and pensions secretary said “tough decisions’ had been made which would hit claimants – following reports that she told the cabinet their loss could reach £2,400 a year.

The admission comes just one day after the prime minister told the Commons that current claimants “will not see any reduction”, promising: “They will be protected.”

Thin-skinned Esther is not one to take this lightly.

The Independent reports today:

Charities working with Universal Credit claimants required to ‘sign contracts to protect Esther McVey’s reputation’

Charities and companies working with Universal Credit (UC) claimants have reportedly been required to sign clauses pledging not to damage the reputation of Work and Pensions Secretary Esther McVey.

At least 22 organisations – covering contracts worth £1.8 billion – have been required to sign the clauses as part of their involvement with programmes getting the unemployed into work, The Times reported.

Officials at the Department for Work and Pensions (DWP) denied they were “gagging clauses” intended to prevent criticism of ministers or their policies, insisting they were just “standard procedure”.

However a spokesman confirmed that the contracts did include references to ensure both parties “understand how to interact with each other and protect their best interests”.

Eagle-eyed observers will have noticed in recent weeks a string of stories about charities, such as CAB,  being contracted to do the DWP’s work….

As in, “Citizens Advice to provide support to Universal Credit claimants.”

The Department for Work and Pensions (DWP) will fund Citizens Advice to provide Universal Support from April 2019, the government has announced.

The support scheme will help claimants through every step of making a Universal Credit claim. It will offer people the comprehensive and practical support they need to get their first payment on time and be ready to manage it when it arrives.

Universal Support provides advice and assistance to help claimants manage their Universal Credit claim, with a focus on budgeting advice and digital support. Since 2017, Universal Support has been delivered by individual local authorities, funded by grants from DWP.

From April 2019 Citizens Advice (England and Wales) and Citizens Advice Scotland will take on the responsibility for delivering a strengthened Universal Support service, a move which will ensure a consistent and streamlined service for claimants across the country.

Secretary of State for Work and Pensions Esther McVey said:

Since becoming Secretary of State in January, I have listened to the concerns of claimants, constituents, charities, welfare organisations and colleagues and I have made significant changes to the system, like extra support for those with mental health conditions, more support for vulnerable young people and more support for families who look after other family members’ children.

I have always said we will steer a new direction and work with partners to deliver vital services, and get Universal Credit right. The state cannot, and should not work in isolation and must reach out to work with independent, trusted organisations to get the best support to vulnerable people.

This brand new partnership with Citizens Advice will ensure everyone, and in particular the most vulnerable claimants, get the best possible support with their claim that is consistently administered throughout the country.

Citizens Advice are an independent and trusted organisation, who will support people as we continue the successful rollout of Universal Credit.

But….

The signatories to contracts must undertake to “pay the utmost regard to the standing and reputation” of the Work and Pensions Secretary, the newspaper reported, adding that they must “not do anything which may attract adverse publicity” to her, damage her reputation, or harm the public’s confidence in her.

A DWP spokesperson said: “It’s completely untrue to suggest that organisations are banned from criticising Universal Credit. As with all arrangements like this, they include a reference which enables both parties to understand how to interact with each other and protect their best interests.

Even the Murdoch press is turning:

As the Mirror says,

The Times said at least 22 organisations signed the pledge as part of contracts worth £1.8 billion to run projects getting the unemployed into work

Written by Andrew Coates

October 12, 2018 at 11:04 am

Poverty Crisis Worsened by Universal Credit.

with 20 comments

Image result for poverty Social Metrics Commission

” total number of people living in poverty is 14.2 million.”

Poverty, anybody could see with their own eyes, is growing.

I was struck, visiting my old homeland, Haringey, by this recently.

It was not so much that seeing the homeless people on the streets was a surprise – we have plenty in Ipswich. Though I must admit that, coming out of Wood Green Tube station, the sight of a geezer with a sleeping bag sprawled out in front of the ‘Spoons on Spouters’ Corner was unexpected.

It was that walking from there to Turnpike Lane most people looked, well, not well off.

Same pound shops, charity shops, though a Mall looked a bit more prosperous than ours.

This is the real London, not Made In Chelsea.

Bounds Green, where I grew up, is (wrote the Guardian in 2013 and it’s still true), is “ordinary north London, like wot even Muswell Hill used to be: an endangered species these days.”, was another destination on this tour.

On a  round circuit from the Tube to my old gaff (a short 15 minutes)  I came across at least 10 off-licences and newsagents/food stores selling cheap booze.

Encouraging to see that people still appreciate white cider and 9% lager, no “shops selling single-estate, organic, truffle-dusted flat whites”.

But then………..

This report, then, does not come out of the blue.

More than two million Brits at risk of falling into poverty, report warns

The UK Government has been urged to take action at the Budget in order to tackle Britain’s growing poverty crisis, in response to the publication of a new report which shows that 2.5million people are at risk of falling into poverty.

The Social Metrics Commission has published a new framework for measuring poverty in the UK, which takes into account a wider range of interplaying factors which cause people to fall into poverty – including material resources, the cost of disability, and the cost of childcare.

Sam Royston, director of policy and research at The Children’s Society, said: “While we would welcome these changes to how poverty is measured being included in official statistics, concrete action is needed to tackle the shameful scale of poverty among our children, with all the damage it can do to their wellbeing, education and life chances.”

The Commission found that more than one in ten (12.1%) of the total UK population (7.7million people) live in persistent poverty. While a further 2.5million people in the UK are less than 10% above the poverty line – meaning relatively small changes in their circumstances could see them fall below it.

Philippa Stroud, the commission’s chair, said: “We want to put poverty at the heart of government policymaking and ensure that the decisions that are made are genuinely made with the long term interests of those in poverty in mind.”

The UK Government abolished child poverty targets under the Welfare Reform and Work Act 2016 – a moved condemned by the SNP who have reintroduced them in Scotland and have called for their reintroduction across the UK.

These are the conclusions of the above report:

The SMC report, available here,  reveals numerous key findings and challenges. The total number of people living in poverty is 14.2 million with the composition of poverty moving towards a better identification of children (4.5 million) and working-age adults (8.4 million). The good news is the shift away from pensioner poverty with far fewer pensioners living in poverty following a significant reduction of poverty amongst pension age couples, over the last 15 years.

The report reveals that people with a disability are much more likely to be living in poverty than previously thought, with around half of the 14.2 million people in poverty living in families with a disabled person.

The report also reveals the persistence and depth of UK poverty. More than one in ten (12.1%) of the total UK population are in poverty now and have been in poverty for at least two of the previous three years. A further 2.5 million people live less than 10% above the poverty line and are close to falling below it with relatively small changes to their circumstances; and around 2.7 million people live less than 10% below it.

 SMC KEY FINDINGS

  1. 2 million people in the UK population live in poverty: 8.4 million working-age adults; 4.5 million children; and 1.4 million pension age adults.
  2. Over half of those in poverty (58.2%) also live in persistent poverty. This means that more than one in ten (7.7 million) of the total UK population are in poverty now and have been in poverty for at least two of the previous three years. Persistent poverty is highest in families more than 10% below the poverty line, in workless families and families where someone is disabled.
  3. People with a disability are much more likely to be living in poverty. Nearly half of the 14.2 million people in poverty live in families with a disabled person (6.9 million people equal to 48.3% of those in poverty). The SMC metric recognises the inescapable costs of disability, accounting for them alongside the value of disability benefits, to reflect the lived experience of living with a disability.
  4. Far fewer pensioners are living in poverty than previously thought, with a significant fall in pensioner poverty over the last 15 years. Poverty rates amongst pension-age adults have nearly halved since 2001, and have fallen to one in ten, a drop from 17% of the total population in poverty in 2001 to 11% in 2017. There are, however some pensioner groups still experiencing high levels of poverty. For example, the poverty rate for pensioners who do not own their own home is 34.2%.

You can only note that all this is about to get a lot lot worse:

The Universal Credit Rollout Will Cause Liverpool Untold Harm – The Government Must Pause And Rethink. 

Joe Anderson Mayor of Liverpool

Huffington Post.

In a city described by the Joseph Rowntree Trust as having the second worst affected in the country when it comes to ‘destitution,’ Liverpool needs Universal Credit like a hole in the head.

Nevertheless, from this week, the remaining parts of my city not already covered by UC will start being migrated across to the new benefit.

The dread I feel is because we know what happens next.

Already, we can see a spike in hardship and a rise in council tax arrears from those who have already transitioned to UC. Not to mention the snaking queues at foodbanks and the families struggling with things like school uniform costs.

Around 55,000 Liverpool households will eventually see their claim move to Universal Credit. So far, we estimate that up to 2,800 people in Liverpool are affected by changes in work allowances in Universal Credit, resulting in a loss of income to families of between £40 and £200 each month.

The Council’s various discretionary schemes, set up to protect people in hardship, made 13,700 awards last year at a cost of just under £2.7million. 71% of all Discretionary Housing Payments made in Liverpool are to help people who have been hit by the ‘under occupation penalty’ – or as we know it, the bedroom tax.

It’s so frustrating because as a council, we have one of the best records in the country when it comes to maintaining discretionary benefits for the poorest and most vulnerable in our city. We are left picking up the pieces from failed central government changes.

Despite losing two-thirds of our government funding since 2010 (£444million), we have stretched our finances as far as we can in order to preserve basic human dignity, but also because it makes sense to address problems upstream before they swim downstream and cost even more to fix.

This is often down to the scandalous time lag between applying for Universal Credit and receiving a first payment. This is often as long as twelve weeks, with the National Audit Office recently reporting that four in ten applicants had experienced financial difficulties while transitioning across to UC, while one in five were not paid on time.

So my message to ministers is simple: pause this roll-out and listen to those of us on the frontline. It’s possible to reform Universal Credit to keep the original intention of simplifying the benefits system without deliberately causing misery for tens of thousands of people in my city and millions more across the country.

Drop the ideology for a start. There is no good reason to make desperate people wait for their benefits, simply because eight years ago Iain Duncan-Smith wanted to teach them budgeting skills. Pay up straightaway and take that terrible burden off the backs of some of the poorest people in our society.

Unnecessary delay simply throws vulnerably families into the clutches of payday lenders and loan sharks. This is a simple concession that Esther McVey could make that would transform the lives of millions of people for the better and show that the Department for Work and Pensions is listening to evidence about the ill-effects of UC.

I would also urge her to work with councils rather than ignoring us. Along with the voluntary sector, we are working to pick up the pieces of botched welfare changes. But give us the tools to do it. Provide ring-fenced funding so councils can create a local welfare scheme to address acute hardship.

But it’s also about practical steps, like understanding the system simply isn’t flexible enough for people on zero hours contracts and have no guarantees about their work situation from week to week. Also, the DWP could dramatically reduce the waiting time for connection to the DWP advice and information lines.

Before people in Liverpool are exposed to these poorly-conceived and badly implemented changes, I am asking Esther McVey to pause and #RethinkUC.

 

Written by Andrew Coates

September 18, 2018 at 9:23 am

Labour Needs Policies to Replace Universal Credit to Rebuild the Welfare State.

with 65 comments

Image result for mark Serwotka speech

“We need to see a Corbyn government commit to overturn decades of attacks on and ridicule of benefits claimants and return to the founding principles of a properly-resourced welfare state”  PCS General Secretary Mark Serwotka.

A number of our commentators have been, rightly, dissatisfied with the lack of a strong Labour voice, above all, Labour Party Policy, on welfare issues.

These range from silence on the benefit freeze (which needs to be ended), to an alternative to the Universal Credit car-crash.

There remains talk about a pause to implementing Universal Credit (a 2017 petition – a bit late now).

The acting Shadow Secretary for Work and Pensions, Margaret Greenwood, seems to have said little since just before the long summer holidays, apart from continuing to criticise government policies (“Delays in payments of Universal Credit are sending victims back to abusive partners – Margaret Greenwood.” August the 1st).

Basic Income aside what are Labour policies, from funding to changing the whole miserable punitive structure of the benefit system?

What are Labour’s plans to fix Universal Credit?

No straightforward ideas seem available.

Although there is this:  John McDonnell attacks Tory disability cuts and vows to address suicides linked to welfare reforms.  Kitty S Jones

This suggested Contemporary Motion for the coming Labour Conference  (from the Clarion site) suggests some starting points:

SUPPORTING THOSE IN NEED: REBUILD THE WELFARE STATE

We note
• the 8 August ONS figures showing that improvement in life expectancy has virtually stopped.
• the 6 August Child Poverty Action Group report on how Universal Credit’s flaws are leading to low-income families arbitrarily losing as much as £258 a month!
• the July Resolution Foundation figures showing the poorest third’s incomes fell last year, even before inflation.

The situation is shameful. We must reverse the drive, accelerating since 2010, to make welfare less and less about supporting those in need and more and more stingy, punitive and coercive.

Neither Universal Credit nor the existing framework (JSA, ESA, etc) are good. We must redesign benefits in close consultation with recipients, workers and their organisations.

This must be part of a wider anti-poverty program, with a goal that by the end of our first term foodbanks disappear.

We commit to
1. Ending the benefit freeze; uprating with inflation or earnings, whichever is higher.
2. Reversing all cuts/reductions; increasing benefits to afford a comfortable, not minimum, income.
3. Entitlement conditions that are straightforward, inclusive and available to all, including migrants (scrap ‘No recourse to public funds’).
4. Paying benefits for all children and dependents.
5. Abolishing all sanctions.
6. Scrapping Work Capability and similar assessments.
7. Relevant health issues being addressed using medical professionals with appropriate knowledge of individuals’ conditions and impairments.
8. Delivery by paid public servants via networks accessible to everyone, including provision of face-to-face support for all who need it. Reversing DWP cuts and privatisation.

Whether this gets onto the agenda or not there are people calling for some serious policies.

‘Labour must return to the founding principles of the welfare state’, says union boss

Welfare Weekly reports (12th of September),

Labour must commit to over-turning years of cuts to social security benefits and end the stigmatisation of benefit claimants seen under Tony Blair and the current Tory Government, PCS General Secretary Mark Serwotka said at a TUC Congress fringe meeting on Tuesday.

Mark told the meeting held in Manchester that the current benefits system in “broken” and “causing much difficulty for people claiming benefits”, whilst adding the Tory Government is seeking to cause divisions between “people in work, those who work in DWP and those in receipt of benefits”.

He added that a future Corbyn-led Labour Government must “return to the founding principles of the welfare state that it is for all people and provide dignity for all people at all stages of their lives”.

Mark also said the rollout of Universal Credit needs to he halted because the new system is in chaos and there aren’t enough DWP staff to deliver it.

“We need to stop a system that is causing so much difficulty for people claiming benefits,” he said. “The benefits system is broken, under-resourced, inadequate and understaffed.”

He added: “The starting point of the debate on welfare needs to be the founding principles of the welfare state that it is for all people and provide dignity for all people at all stages of their lives.

Mark continued: “We had a system that wasn’t perfect but gave people money when they needed it. Almost exclusively people claim benefits because of a crisis out of their control.£

Mark said that ‘New Labour’ took stigmatisation of welfare claimants to new levels and there was a lot of work to do to put that right. He said we need to see some radical welfare polices from a future Labour government that gives everyone a welfare system that we can all be proud of.

£34bn has been cut from the welfare budget since 2012, with a further £12bn of cuts planned before 2022.

“More money is needed as we have some of the lowest rates of benefits in Western Europe,” said Mark.

PCS DWP Group assistant secretary Steve Swainton said: “Universal Credit has been understaffed and underfunded at every stage. Our members are doing everything they can do to mitigate the worst of the system but we need a radical redesign.”

Colin Hampton, co-ordinator of the Derbyshire Unemployed Workers’ Centres (DUWC), told the meeting: “If we can spend money on bombing people we can spend money on putting people into work.

“The benefits issue is fundamental to the trade union movement. What happens to people on benefits affects what happens to people in the workplace and wider society.”

“We need to restore dignity and respect to people in and out of work”, he added.

The PCS site carries further details, including this:

Written by Andrew Coates

September 12, 2018 at 10:46 am

Crunch Time for Failing Universal Credit Scheme.

with 38 comments

Image result for universal credit better off in work

Please Verify £3 Billion Extra Funding.

Theresa May has been told that she must inject nearly £3 billion into controversial benefit reforms as the policy reaches its most delicate stage in parliament.

MPs will be asked this autumn to approve the extension of universal credit payments to 2.1 million less well-off families who at present claim income-linked benefits. These include about one million families in which parents work in low-paid jobs. This group of people who are “just about managing” have previously been identified by the prime minister as her political priority.

The Times.

Government faces crunch decisions this Autumn as Universal Credit enters its ‘most difficult phase’.

The Resolution Foundation says,

The government must get the final phase of Universal Credit (UC) right this Autumn if it’s to reboot the reputation of its flagship welfare reform programme and support millions of low income families, according to a new report published today by the Resolution Foundation.

The benefits of moving focuses on the final, and in many ways most difficult, phase of UC, which involves moving 2.1 million families currently claiming benefits (such as tax credits and Employment Support Allowance) onto the new system. This includes around a million ‘just about managing’ families who are in work.

The details of the crucial final phase are due to be decided upon in parliament this Autumn and rolled out from July 2019 onwards. This ‘managed migration’ is the most difficult phase yet for UC because it involves people that have not chosen to apply for the new benefit.

The report notes that the principle of Universal Credit has consistently enjoyed cross-party support on the basis of two key advantages – improved financial incentives and higher-take up for the simplified benefit.

However, the first advantage has been undermined by cuts in Summer Budget 2015 that reduced the generosity of the scheme. The small print of UC’s design also means that the financial incentives for single parents and second earners to enter and progress in work are weak.

The Foundation says that upholding the second key advantage of UC – encouraging higher take-up – should therefore be a top priority for government as it seeks parliamentary approval for the legal rules that will govern the upcoming managed migration this Autumn. It argues that the potential gains from higher take-up are significant, with the OBR estimating that 700,000 families could gain around £2.9bn in total.

The benefits of moving says that a smooth final phase of the rollout, which prevents cash losses and encourages more families to claim their full benefit entitlement, could help to reboot the reputation of UC. However, it warns that further design flaws – which need to be resolved this Autumn – risk further undermining the roll-out and could put people off claiming UC altogether.

The Foundation’s recommendations to make a success of the most difficult phase of UC include:

  • Speeding up UC payments. The government should show that 90 per cent of new claims to UC are paid on time and in full before it rolls out the managed migration process. In February 2018, 83 per cent of claims were paid in full and on time, with little improvement since June 2017.
  • Reducing financial risks. The government should ensure that the state, rather than individuals, bears any financial risk that may arise from teething problems in the managed migration phase. No existing claim should be closed until a new UC claim is in place, so that people don’t lose support altogether.
  • Boosting financial incentives. The government should introduce an earnings disregard for those being forced to move onto UC to prevent claimants with volatile earnings (such as self-employed workers or those on zero-hours contracts), or who have a short-term boost in pay, from losing out financially from the transition. More broadly, the government should improve incentives by increasing single parent work allowances and introducing one for second earners.

David Finch, Senior Economic Analyst at the Resolution Foundation, said:

“Universal Credit enjoyed almost universal support when it was first announced. But its reputation has been undermined in recent years by significant cuts and payment delays that have left too many claimants in difficult financial straits.

“But despite these problems, the rollout of Universal Credit is still going ahead and is in fact about to enter its most difficult phase as two million families already claiming benefits start to be moved onto the new system – including one million just about managing families.

“Get this final phase of the rollout right and it could help to reboot Universal Credit’s reputation, but get things wrong and UC’s reputation risks taking another battering, and worryingly some families could be put off claiming UC altogether.”

 

Calls for further delays to fix flaws before million working families move on to benefit

Failure to manage the critical next phase of universal credit, during which about a million low-income working families will be moved on to the benefit, could sink the controversial welfare programme altogether, experts have warned.

The Resolution Foundation says ministers should consider further delays to the rollout of the benefit so that design flaws can be fixed and further safeguards put in place to protect claimants from risks of financial hardship.

There is concern that universal credit could prove politically explosive for ministers when the large cohort of “just-about-managing” working families in receipt of tax credits are subjected to its well-documented problems with payment delays.

More than 2 million households – including about a million working families, as well as 750,000 disabled and ill claimants unable to work – will be transferred to universal credit under so-called “managed migration” over three years from next July.

Meanwhile:

‘Debt, tears and suicidal thoughts’: This is the reality of universal credit in Cardiff

Carer Vivien Soloman, 60, from Tremorfa, has been told she cannot receive anything as her partner’s pension counts towards the maximum household income they’re entitled to under Universal Credit.

Despite being signed off work after breaking her wrist in April last year and suffering from stress, she is now without any income.In six years time, when she turns 66, she will be entitled to receive her own state pension yet under Universal Credit she is not entitled to any benefits.

Vivien recently received a letter from her housing association telling her she is nearly £1,000 in arrears and faces being forced out of her home after 24 years.She and her partner have seen their council tax bills jumped up by over double – rocketing to over £90 a month when she used to pay £24 a month.

That’s on top of a maxed out overdraft of £2,000, with bank charges of £35 a month, paying her sister £30 a month for credit card debt and still paying for her father’s funeral after he died in April.With no savings, she can’t afford to pay it back, and it’s making her have suicidal thoughts.Vivien, whose partner is a retired painter and decorator, feels trapped.

Written by Andrew Coates

September 8, 2018 at 11:45 am

Universal Credit and In-Work Poverty in East Anglia.

with 27 comments

Related image

“In-Work Poverty” Keeps People in this Spider’s Web.

Many, many, indeed, many, if not many,  local papers have reported on massive problems created by and increased by  the introduction of Universal Credit.

Well, the East Anglian Daily Times and the Ipswich Star have now got round to the issue.

Their angle is about people in work claiming the benefit – nothing about the bungling system itself, or the bungling it’s caused around the country..

‘In work poverty’ is a big, serious problem.

But a walk around Ipswich would reveal – as no doubt a keen newshound could find if it’s not too much trouble to do more than phone round various local charities and Food Banks –  that people are begging on the streets.

One of the principal reasons is that they do not get benefit at all.

Thanks to the compliance criteria, and sanctions.

There is also the fact that Universal Credit benefit rates are frozen.

A real newshawk might take the difficult step of going to the supermarkets, glancing at a few bills, and looking at the rising cost of living.

Low wages mean hundreds more workers are claiming Universal Credit.

Ipswich Star.

Michael Steward

Hundreds of workers across Suffolk and Essex are claiming Universal Credit as their low wages are not enough to live on.

Charities say that the “shocking” number of in-work applicants is due to low wages and housing costs.

In some areas, workers claiming the payment represented nearly half of the total people on Universal Credit, according to latest figures from the Department of Work and Pensions.

Universal Credit is a new benefit, slowly being rolled out by the Government, which replaces six legacy benefits and merges them into one payment.

It includes income support, jobseeker’s allowance, employment and support allowance, housing benefit, child tax credits, and working tax credits.

Here the journalist give some figures,

In Colchester, there were 240 employed claimants on Universal Credit in July 2018, equating to 47% of the 516 people receiving the payment.

This was 93 more people than the previous month and one of the highest percentages of employed claimants in Britain.

In St Edmundsbury, the number of in-work claimants for July was 943, 142 more than the previous month and around 43% of the total.

In Suffolk Coastal, 169 people out of 413 claiming Universal Credit in July were employed (41%) and in Mid Suffolk, 259 people out of 648 were in-work (40%).

The figures for Babergh showed that 451 employed people were claiming Universal Credit – 39% of the total – and 63 people out of 172 claimants in Forest Heath (37%) were in-work in July.

Overall, there were 1,824 people on Universal Credit in Ipswich, 395 more than in the previous month, with 644 in-work – which is around 35% of the total.

There were 305 employed claimants in Tendring on Universal Credit in July – about 34% of the total – 25 fewer than the previous month.

Here the journalist phones around a few people.

Maureen Reynel, MBE, of foodbank FIND, which helps people in Ipswich and the surrounding areas who are experiencing poverty, said the charity has seen a increase in demand from a wide variety of people.

“It has been very noticeable for some months now,” she said.

“It isn’t just food, but also household items, which people aren’t able to replace.

“Everyone thinks of families, but it’s also the single people, males and females, who are really struggling.

“Some people have received Universal Credit but are finding huge deductions and have nothing to fall back on.

“It’s definitely had an impact.

“Many people who are working also have childcare costs or work part-time because of childcare and part-time jobs are very often low paid.”

Pritie Billimoria, from Turn2us, a charity which helps people who are struggling financially, said it was “shocking” that such a high number of workers earn so little that they are forced to rely on benefits.

“Every day we hear from working people who are living hand to mouth and facing impossible decisions about whether to buy food or pay their rent.

“We know that the rise of in-work poverty and in-work claimants is complicated. Households are dealing with low pay, the rising cost of living and changes to welfare support, which are all having a compounding effect on the daily lives of families across the UK.

“Work needs to be a route out of poverty so people are not left dealing with the intolerable stress and anxiety that their wages don’t cover their basic costs of living.”

Note: It would have been helpful for the ace reporters of the Star to mention that, “Turn2us”  links to this centre which helps rough sleepers and people who are homeless or socially excluded.

Ipswich Housing Action Group – Chapman Centre
Chapman Centre
1 Black Horse Lane
Ipswich
IP1 2EF

Public phone: 01473 232 426 / 01473 213102

Email: admin@ihagcc.co.uk

Website URL: http://www.ihag.co.uk

Service offered: The Chapman Centre provides advice and support to marginalised and vulnerable people over 18, including homeless people and rough sleepers, on issues such as housing, welfare benefits, money advice and health issues. The Centre also provides access to computers, shower facilities, use of phones, post collection, lunches, clothing and food parcels; and offers meaningful activities to enable and encourage individuals back to sustainable independence by supporting in their journey back into social inclusion – through structured training sessions and self-confidence boosting activities.

Target group: Rough sleepers and people who are homeless or socially excluded.

This Blog is very very far from convinced that, “a national charity helping people when times get tough. We provide financial support to help people get back on track” is in any sense whatsoever the real long-term way to deal with poverty and homelessness.

Written by Andrew Coates

August 20, 2018 at 4:02 pm

Universal Credit Leaves Families in Debt.

with 18 comments

Protests as Universal Credit is rolled out in Clacton (6th August)

One of the first things you noticed in the changing High Street of the last decade was the invasion of loan companies, and pawn brokers and companies like BrightHouse,

Got no money but need a new TV? No problem. BrightHouse will sell you one in instalments… for a huge mark-up

Then there’s the Wonga, QuickQuid, and licenced loan sharks ads all over the telly.

Debt, the cause and the result of this has become a major problem.

But there’s nothing that Universal Credit can’t make worse.

Universal credit flaws leaving families in debt, campaign group says

Low-income working families are losing hundreds of pounds each year – and being wrongly denied free healthcare entitlements – because of flaws in the way universal credit is designed, campaigners say.

The Child Poverty Action Group (CPAG ) said arbitrary rules built in to the way universal credit is calculated leave some families unable to predict how much they will be paid each month, leaving households in debt and unable to budget.

It can lead to claimants being wrongly benefit-capped – a penalty designed to “incentivise” jobless or low-earning households by severely limiting their benefits – because the system fails to spot they are working and earning enough.

In other instances, the problem means claimants doing the same job and earning identical salaries can end up being paid different amounts of universal credit simply because their respective claims begin on different days of the month.

The complication, which occurs when pay dates fall close to the start of universal credit assessment periods, can result in claimants who are parents or disabled losing up to £258 of work allowance each month, CPAG has estimated.

The charity has called for universal credit to be halted in order to fix the problem before the benefit is extended to over two million people – including many families who are currently in receipt of working tax credits – from July 2019.

It says erratic payments have left families stressed and in hardship: “Claimants are often left flummoxed by how much – or how little – universal credit they will receive from one month to the next,” said the CPAG chief executive, Alison Garnham.

The full report is:

Rough justice: problems with monthly assessment of pay and circumstances in universal credit, and what can be done about them

The lengthy press release from the Child Poverty Action Group says that it’s people working who are hit hard,

Universal credit assessment system is leaving claimants out of pocket

Working people claiming universal credit are having their benefits capped when they shouldn’t be, and losing the effects of ‘work allowances’ worth up to £258 per month simply because of the dates on which their paydays and universal credit ‘assessment periods’ happen to fall, new evidence from Child Poverty Action Group (CPAG) shows. Last month the Work and Pensions Secretary acknowledged the need to look at “ … payment cycles for those in work.” (3)

In the worst cases workers are losing hundreds of pounds each year simply because their paydays clash with the monthly ‘assessment periods’ in universal credit (UC). Far from offering much-vaunted simplicity, universal credit rules leave many workers unable to predict what their payments will be from one month to the next. People who happen to move house at the ‘wrong’ point in their assessment period can also lose hundreds of pounds in help with rent.

One in 20 cases coming in to the charity’s Early Warning System – which gathers case evidence from welfare rights advisers across the UK – indicates a problem with the monthly assessment system in UC. ​

Universal credit assessment periods run for a calendar month, starting from the date Universal Credit is awarded. At the end of each month, claimants’ circumstances and income are assessed to determine their entitlement to UC, with payment made a week later in arrears. But where a claimant’s monthly payday is on or close to the first day of their assessment period and they are paid a day or two early some months, because their normal payday would fall on a weekend or bank holiday, they are then recorded as having had two paydays in one assessment period and none in the one after.

Two pay cheques in one assessment period can leave claimants facing unexpectedly low universal credit awards as well as losing the effect of one month’s work allowance (see below). Claimants can even lose help with prescription charges or travel costs for NHS treatment because when paid twice they appear to earn more than they do. And if they appear to have no earnings in the following assessment period – because they received two pay cheques in the preceding one – then rather than seeing their universal credit increase to compensate for this they may find that they are in fact subject to the benefit cap (which was designed to limit how much support is paid to people out of work or with very low earnings) so their support for that month is reduced too. Had they simply received one paycheque in each assessment period they would have a consistent UC award and would be recognised as earning enough not to face the benefit cap.

Claimants whose assessment period start-date and payday are both close to the end of the month are especially likely to miss out, as bank holidays are often in the last days of the month.

A worker paid on the last working day of each month in 2018, with assessm​ent periods dated 30th – 29th of the month will have:

§ 6 assessment periods with one payday

§ 3 assessment periods with two paydays

§ 3 assessment periods with no paydays.

People who are paid weekly, fortnightly or four-weekly will also have different numbers of paydays in different assessment periods over the course of a year, which makes budgeting challenging and also means that they may be eligible for passported help with health costs in some months but not others, or may be benefit capped in some months but not others, when their pay has not in fact changed at all.

For couples where both partners work on different pay cycles, the variability of their UC award month to month can make budgeting almost impossible – see case study Katie and Luke (page 9 of full briefing).

There is a lot more.

They conclude:

Commenting on the findings from CPAG’s Early Warning System, the charity’s Chief Executive Alison Garnham said:

“Universal Credit isn’t working for working people. Our Early Warning System shows​ claimants are often left flummoxed by how much – or how little – universal credit they will receive from one month to the next.​ But we believe most of the problems created by the monthly assessment system can be fixed relatively easily if the political will is there. The mass migration of families on to universal credit should not begin until these fundamental problems are resolved.”

And:  Child Poverty Action Group is taking legal action on the rigidity of assessment periods

Just to remind people where this ends:

Written by Andrew Coates

August 8, 2018 at 12:17 pm