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Recommendations to improve Universal Credit

Two research papers, recently published by the Joseph Rowntree Foundation (JRF) and Cardiff Metropolitan University, put forward recommendations to improve the Universal Credit (UC) system. Universal Credit will be introduced in Northern Ireland on a phased geographical basis from September 2017.

Whilst JRF suggest policy related recommendations for change, the Cardiff Met. paper focuses on the tenant experience and makes practice related recommendations for improvement.

Joseph Rowntree Foundation recommendations for Universal Credit

In their report, JRF consider UC to be “an important tool for tackling poverty”  but warns policymakers that the risks and opportunities presented by UC must be recognised.  JRF propose 3 priorities for immediate action to ensure UC achieves its goals and helps reduce poverty:

1. Reduce waiting time for Universal Credit payments

With the current UC system,  new claimants must wait at least 5 weeks for the first payment: a 7-day wait before being allowed to claim, followed by a payment made 1 month in arrears.  UC combines multiple major benefits into a single payment, which can leave people with few, or no, other sources of income.  Living for a sustained period with a very low income increases a person’s risk of poverty and destitution (when someone cannot afford to eat, stay warm, dry and clean - Fitzpatrick et al., 2016).

JRF recommends the 7 waiting days are removed and the impact of payments in arrears is monitored and reconsidered if it results in rising debt and destitution.

2. No restriction on child element of Universal Credit

The abolition of the First Child Premium and the restriction of the child element of UC (and Tax Credits) to the first 2 children only, means families will lose a proportion of their income.  The Institute of Fiscal Studies (IFS) project an additional 200,000 children will be living in absolute and relative income poverty in 2020/21 as a direct result.
Growing up in poverty results in lower earnings and higher benefit claims as an adult, costing an estimated £6.1bn per year in lost tax revenue and additional benefit spending (Bramley et al., 2016). 

JRF recommends the child element of UC is not limited to the first 2 children only, at an estimated cost of £1.4billion in 2020/21.

3. Change the Work Allowance system

Recent UC Regulations have reduced the support available to low-income working households.  This is due to changes to the Work Allowance (WA) - the amount people can earn before income support starts to be withdrawn.  The IFS (2017) predict that WA reductions are responsible for 25% of the projected increase in poverty among children in working households by 2020/21.  Previous research by JRF shows that raising the WA reduces poverty more cost-effectively than lowering the taper rate (the speed at which benefits are withdrawn, once earnings exceed the WA) (JRF, 2016).

JRF recommends the Work Allowance system be reformed so that low-income working families keep more of what they earn before benefits start to be withdrawn.

Cardiff Metropolitan University recommendations for Universal Credit

Cardiff Metropolitan University has examined the impact of UC in Wales, using data collected by housing association tenants.  The peer researchers engaged tenants in discussion about their awareness and experiences of UC and found that:

  • the wait for money caused anxiety, with several participants turning to food banks as a direct result of the waiting time;
  • application processing time and the payment amounts caused confusion;
  • there were barriers to engaging with their social landlord about UC, the most common of which was illiteracy.

Participants were encouraged to suggest solutions to problems they had experienced.  The solutions offered related to:

Rent arrears letters

Words used by participants to describe rent arrears letters included: threatening, scary and blunt. Participants suggested that letters could be more “gentle, kind” and be presented as “a personal reminder”.

Communication with tenants

Participants valued the focus groups because they could talk to each other. Some suggested UC could be explained to small groups by a government representative.  Many participants mentioned illiteracy as a barrier.  A visual approach to information was a popular solution to the communication issues experienced by participants.

Working with social landlords

The participants suggested that open surgeries/IT hubs, to help them access information and look for work,  and a friendly approach would improve the relationship between landlords and tenants.

Following analysis of the findings, Cardiff Met. recommends that social landlords and the government consider the following areas for improvement:

  • the impact and effectiveness of formal rent arrears process;
  • the methods of communication around UC and the timing of support;
  • ways to improve the relationship between landlord and tenant.

Recommendations for Change to Universal Credit: policy and practice

Both JRF and Cardiff Met. highlight that they do not object to the introduction of UC, but they want to ensure that the system responds to the evidence of its impact in practice.  By addressing priorities around waiting times, barriers to engagement, rising child poverty and living standards, the UC system could be improved and be more able to help people.  Failing to address these issues risks continuing to disadvantage the most vulnerable people in society.
 

Welfare Reform Training from Housing Rights

As Universal Credit roll out date approaches, Housing Rights has a training courses on 27 April in Belfast and 1 June in Derry will ensure you know how Welfare Reform will affect the housing situation of vulnerable and low income households in Northern Ireland. Book online or email us.  

Tagged In

Research, Welfare Reform, Affordability

Author

Lizzie Scott