MSE News: Universal credit - Most claimants unprepared, Citizens Advice says

MissMoneypenny

BigAunty wrote: »

In fact, I don't think UC goes far enough - every benefit should be rolled up into one single monthly payment. Also, council tax and benefits should be on the same system, too, instead of the split between central and local government.

Currently, a benefit claimant can identify their entitlements using an online benefit wizard so can get a single overview of what they should receive in five minutes - then they have to go off and apply for a handful or more separate forms to various separate bodies that get paid at different periods across the month.

It's a shame that all the benefits, allowances and credits can't be applied for online at the same time, held as a single record that warrants a single monthly payment.

The present system isn't fit for purpose and costs too much to run.
I wouldn't be surprised to see all the benefits (and whatever other benefits they give fancy names to) rolled into one payment in the future. The cost of setting it all up would pay for itself in the end. It is going to be a massive job but any future welfare changes will be much easier to implement.

EDIT. One funny thing I read on another site. One person said that if Universal Credit is going to make them increase their work hours from the 24 hours per week they do now between them, to 35 hours per week each at NMW, then they wouldn't be able to claim benefits anymore.

Morlock

MissMoneypenny wrote: »

The present system isn't fit for purpose and costs too much to run.

How much does the present system cost to run compared to when UC is implemented?

Morlock

I think the monthly payment aspect is the least relevant change, although some will struggle to stretch a small amount of money for that length of time.

The most significant change is extending the sanction regime from ESA and JSA claimants only, to Working Tax Credit claimants too. The number of sanctions against claimants, often for spurious reasons, is increasing dramatically. WTC claimants will also get a taste of the punitive sanctions regime, which seems to be the dominating factor in getting people 'off benefits'.

BigAunty

MissMoneypenny wrote: »

...

EDIT. One funny thing I read on another site. One person said that if Universal Credit is going to make them increase their work hours from the 24 hours per week they do now between them, to 35 hours per week each at NMW, then they wouldn't be able to claim benefits anymore.

Sounds like they are a household of 2 parents and kids as 24 hours is the minimum hours required to qualify for Working Tax Credits.

A household on NMW would earn around £150 a week and therefore one with kids is likely to qualify for significant tax credits, housing benefit and council tax discount.

Before the change that bumped it up from 16 to 24, there were 212, 000 households in the UK where one parent in a two parent household worked just part time. I believe that they can do this under the current system until their youngest child leaves full time education or turns 20.

Under UC, I believe that more hours of employment are expected as the children grow older. Therefore, by the sounds of it, the example you came across is a household that would be expected to earn £440 a week (based on 70 hours per week for the two adults on NMW), nearly three times their current earnings.

So yes, this could theoretically lift some households with certain aged children off benefits but some will still qualify for continuing benefits. Not sure where the jobs are going to come from now the previous governments have encouraged a culture of part time employment.

MissMoneypenny

Morlock wrote: »

I think the monthly payment aspect is the least relevant change, although some will struggle to stretch a small amount of money for that length of time.

Some people on benefits have more cash for food and bills every week, than those who work full time! Those working will be paying taxes; travelling costs; work clothes; mortgage/rent and full council tax. Yet they seem to manage to "stretch a small amount of money for that length of time" because they have to.

Morlock wrote: »

The most significant change is extending the sanction regime from ESA and JSA claimants only, to Working Tax Credit claimants too. The number of sanctions against claimants, often for spurious reasons, is increasing dramatically. WTC claimants will also get a taste of the punitive sanctions regime, which seems to be the dominating factor in getting people 'off benefits'.

Tax Credits claimants are often happy to remain on those benefits long term, because they aren't subject to the other income based benefit rules and sanctions! It's right that they too are now included in the sanctions and work programmes if they don't do more to keep their families.

BigAunty

MissMoneypenny wrote: »

Some people on benefits have more cash for food and bills every week, than those who work full time! ...

Tax Credits claimants are often happy to remain on those benefits long term, because they aren't subject to the other income based benefit rules and sanctions! It's right that they too are now included in the sanctions and work programmes if they don't do more to keep their families.

Funnily enough I dipped into the Beveridge report yesterday because of a thread in DT and he explicitly warned back in the 40s of the welfare trap that could prevail if the means testing was not appropriately set.

For example, he wrote in his report "in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family".

Having more than 200,000 families with 2 parents where only one works part time and they claim child tax and working tax credits (plus HB for many of them) is the antithesis of this.

Beveridge wanted a system where (large?) families were only paid child benefits during interruptions to employment otherwise they would be better off in unemployment.

Tax credits that take into account children have largely eroded the distinction in income between some fully employed and some non or under employed families in the UK.

Of course, he failed to predict many factors that have led to the majority of people in the UK receiving benefits of one kind or another - immigration, the rise of lone parenthood, the housing crisis, in work poverty, etc.

seven-day-weekend

thornelius wrote: »

Why does it have to be paid monthly? Its alright for those over paid millionaire politicians who have plenty in the bank to not need to worry about running out of milk/bread/nappies but what about the rest of us?! There's no way I'd manage if everything was paid once a month and I'm not in the poorest of brackets. This whole thing is just asking for trouble :mad:

Most employment is paid monthly or four-weekly. People will have to learn (maybe after being taught) to budget their money.

seven-day-weekend

I think UC is a good idea in principal, bringing several Benefits under one banner. I also think being paid monthly, paying rent oneself with the money one is given and and having to be paid into a Bank account is good. Join the rest of the human race, it's empowering.

However there are going to be many people who will need to be taught budgeting skills. Some charities already do this (CAP MONEY course is one : https://capuk.org/i-want-help/cap-money-course); hopefully others will be forthcoming. Other people will need help in opening a Bank account.

But in principle I think it is a good idea if the initial blips can be ironed out.

ALIBOBSY

I think the big issue for alot moving from weekly to monthly is how the process is actioned. I don't think the payments should be 4 weekly where the payment moves around in the month, this makes it extremely difficult for people to budget to cover direct debits and bills, if we want it to be more like work it should be a set day in the month.

Also the changeover needs to have more than just a few weeks notice, they need to write out with an actual changeover date at least a couple of months ahead to give people time to start putting something away for the period when they will have 4 weeks without income. TBH perhaps something could be done with timing so when they start to change people over they get the last weekly payment, then fortnightly for a month, then finally into monthly.

The thing is if you were working and being paid weekly then had to move to a monthly pay you would have enough income to, stand a chance of putting something away as a cushion to get you through the "month in hand", people on weekly benefits often are on lower amounts and may really struggle to in effect live one month on one weeks pay.

We will see how they manage the change over.

Ali x

MissMoneypenny

BigAunty wrote: »

Funnily enough I dipped into the Beveridge report yesterday because of a thread in DT and he explicitly warned back in the 40s of the welfare trap that could prevail if the means testing was not appropriately set.

For example, he wrote in his report "in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family".

Having more than 200,000 families with 2 parents where only one works part time and they claim child tax and working tax credits (plus HB for many of them) is the antithesis of this.

Beveridge wanted a system where (large?) families were only paid child benefits during interruptions to employment otherwise they would be better off in unemployment.

Tax credits that take into account children have largely eroded the distinction in income between some fully employed and some non or under employed families in the UK.

Didn't the Labour MP Frank Field also predict that Tax Credits would be "a benefits trap" and resign his post of Minister of Welfare Reform, when Blair decided to bring in his "vote winner" new benefit, Tax Credits?

BigAunty wrote: »

Of course, he failed to predict many factors that have led to the majority of people in the UK receiving benefits of one kind or another - immigration, the rise of lone parenthood, the housing crisis, in work poverty, etc.

All of which could be attributed to the benefit Tax Credits.