The truth about Universal Credit
http://welfarenewsservice.com/the-truth-about-universal-credit/
http://welfarenewsservice.com/the-truth-about-universal-credit/
Nine out of 10 benefit claimants are not ready to deal with the government's welfare changes and are likely to lose out when it is introduced nationally in October, according to the first independent survey of recipients.
Over nine months, Citizens Advice collected data from almost 1,800 people in Birmingham, North Dorset and Wales who would have to access universal credit, a new scheme that will roll six benefits into a single payment.
The charity said its survey showed that many people would struggle to budget, did not have the right bank account or could not manage their benefits online – with the result that many could end up facing hardship and debt.
The survey results come as work and pensions secretary, Iain Duncan Smith, faces a grilling by MPs this week on universal credit's spluttering start. The charity says its findings should sound alarm bells in the government, especially as the scheme begins in October and has been dogged by rumours of IT failures.
Universal credit will require claimants to access benefits online; to pay rent themselves, rather than housing benefit going directly to landlords; and to have a bank account which can handle direct debits. Eight out of 10 people affected, says Citizens Advice, "don't have the basic information about what is about to happen".
The charity asked respondents whether they felt they would be able to cope with five possible problem areas: budgeting, monthly payments, banking, staying informed and internet access. Ninety-two per cent said they felt unprepared for the new system in at least one area.
There are concerns Two-thirds said they would need help to "get online and manage my universal credit account". Three-quarters said they could not on their own "keep track of my money on a monthly basis".
Typical is Derek Mallet, from Birmingham, currently receives employment and support allowance, due to long-term depression and more recently a heart attack. His wife is disabled and the pair's benefit income is less than £600 a month.
Mallet said he was "concerned about having to use the internet in order to set up and get benefits. I have never been on a computer." Citizens Advice said this unpreparedness was "widespread across people of all backgrounds and ages".
Gillian Guy, Citizens Advice chief executive, said: "Our report shows that an overwhelming majority of people do not feel ready to deal with universal credit. Our findings must act as a wake-up call for government.
"The results demonstrate yet again how vital it is that implementing universal credit is not left to chance. There is clearly a breakdown in the system if 90% of potential claimants are not ready to deal with this major change to their payments, and ministers must act urgently to address this problem."
She called on the government to allow claimants to request fortnightly rather than monthly benefit payments, and for recipients to ask that their rent continues to be paid directly to their landlord for the first year of the new system.
Labour said universal credit "is clearly in deep trouble". The party's work and pensions spokesman, Liam Byrne, said: "Universal credit is now in real danger of becoming universal chaos. This flagship programme is supposed to be ready in just months, but every aspect of the scheme still seems woefully under-cooked."
A Department of Work and Pensions spokesperson said the government was working with "councils, social landlords and community groups, including Citizens Advice, to offer support" to claimants.
"We have always been clear some claimants will need extra support ahead of universal credit. The four-year rollout of the new benefit will give us time to prepare people and give them the right help."
The UK government's controversial plans to cut and shut benefit payments into one system was defended today by Work and Pensions Secretary of State Iain Duncan Smith.
Just as Duncan Smith took his seat for a relatively easy grilling from the Work and Pensions Select Committee, his department put out a statement about the progress of Whitehall's Universal Credit project. The statement confirmed the system would be deployed to just six dole offices come October.
A national rollout of Universal Credit was due to go fully live by the autumn after rounds of testing that should have kicked off in April. The department hopes to overhaul Britain's benefits system with the new project by merging six government handouts into one regular payment that can be claimed and managed online.
However, the pilot scheme, dubbed Pathfinder, has been hamstrung by delays, which meant that only one job centre - a Jobcentre Plus in Ashton-under-Lyne - was up and running on 29 April as planned.
A pilot project in Wigan began at the start of this month, while dole offices in Oldham and Warrington won't begin testing Universal Credit until the end of August.
But the scheme came under fire today from MPs on the Work and Pensions Select Committee who questioned the "simplistic" nature of the testing that is currently taking place for Universal Credit.
At present, newly unemployed workers who are single are the only claimants being spotlighted under the scheme.
Labour MP Anne Begg, who is the committee's chair, asked Duncan Smith if the government's Universal Credit system was on track and to explain why "more complicated claims" were not being processed at the Pathfinder stage.
"We will start off with our national footprint using the same criteria," IDS insisted.
Begg shot back: "Won't that be terribly slow?"
Duncan Smith said he was simply responding to demands from the panel of MPs, who had called on the DWP "not to go too fast" and get things wrong.
"There's rushing it and there's a snail pace," Begg observed.
Some members of the committee tried to get Duncan Smith, Welfare Reform Under Secretary of State Lord Freud and Universal Credit boss Howard Shiplee to confess that deadlines on delivery of the system had slipped.
But Lord Freud refused to be pinned down, preferring instead to tell the panel: "I don't want to be a hostage to fortune," before adding that he wanted to see Universal Credit have a "safe and secure landing by 2017".
The peer told the MPs that it was important to "test these systems so that they work" for claimants. To which Labour MP Glenda Jackson responded:
"But you're not, are you?"
She continued:
The people you are actually testing are a small number, the simplest of cases. How an earth are you going to achieve the evidence that you keep telling us you are going to learn from when the cohort is so narrow and so simple?
You entered into this and you say you've learned from what you didn't know. You're now attempting to tell us that it's all going to be easy-peasy because you are going to learn in this way, so when are you going to introduce the testing of the most complex cases? How many people will be in that when apparently according to this new ministerial statement there are going to be six national centres apparently dealing with everybody who will be a claimant and will eventually come on to Universal Credit?
Lord Freud's response was weak. He said simply that vulnerable groups would be tested under Universal Credit "pretty soon", at which point IDS interjected: "It's part of the October rollout ... to do those kind of cases."
Jackson chided: "That's when you start learning?"
Duncan Smith told the MP: "Post October we'll be selecting some more difficult groups to run through the process to ensure that we understand how that works - against our expectations, because we've done a lot of profiling and testing in this process."
Jackson pushed the minister again to provide firm details about when the process would begin.
Shiplee, who was brought into UC in May as a replacement for Philip Langsdale who died suddenly late last year, then revealed that the project had in fact been parked for 100 days to allow him to "reflect on where we've got to and start to look at the entire and total plan going forward".
To which Jackson retorted: "You have absolutely no evidence at all to make that retrospective assessment."
But IDS thundered: "That is simply not true." The minister, whose Cabinet position - sources have claimed - could be under threat, then defended the DWP's position by saying it was an old hand at dealing with extremely complicated cases.
Later in the hearing, Begg wondered if the government's 2017 deadline for deploying Universal Credit across the country was looking increasingly fanciful.
"We are bound to the timetable set," Duncan Smith insisted.
The minister also downplayed the significance of the technology-driven project, which has been heavily criticised for many months on end. Earlier today, The Register uncovered that skilled IT staff working on the UC trial are having to enter data by hand.
It has not helped that the project has been dogged with problems relating to a number of significant management rejigs as well as claims that contractors were walking off the job after the programme was halted.
"We get fixated on things like IT; the reality is it’s about a cultural shift," IDS told the MPs.
The dole offices earmarked by the DWP for Universal Credit from October are: Hammersmith, Rugby, Inverness, Harrogate, Bath and Shotton. Duncan Smith's department added that another 6,000 "internet access devices" would be installed in job centres in the autumn.
But the Public and Commercial Services Union attacked the DWP's supposed progress on Universal Credit.
"This is an admission of the abject failure of ministers," said PCS General Secretary Mark Serwotka. ®
This UC souds like a fucking mare
I heard the Govt spent upwards of 12 Billion on it !!!!
as opposed to their first estimate in 2009 of 2 billion
Some people say the system is so fucked that the total bill will be 20 billion
Google paid £7.3 million tax on a uk turnover of 3 billion quid last year
who are the real crooks?
You're in danger of appearing to have socialist leanings. I like to push people who are leaning, so that they might fall over![]()
i gave up on politics a long time ago, now i follow david icke
people think he is a nutter but he speaks a lot of truth Imho
if i HAD to align myself to anything i guess it would be libertarian
this is a factCount me in getting nuff shit atm trust .
But if you analyse me you will find the dna of a hustler baby :D
let's hope with some really genuine health problems i'll be cushty eh
Remind me, what was the original purpose of universal credit? Department for Work and Pensions minister Lord Freud writes this week, with silky certainty: "The simplicity of universal credit will allow people to see that a move into work or increasing their hours at work will be simple and financially worthwhile." That was always the philosopher's stone in the infinite complexity of benefits policy. So have they fixed it?
A hard blow to that boast is delivered this week in figures on universal credit from the Joseph Rowntree Foundation. Here's the real shocker: families who work full-time can easily find themselves with less money in hand than if they work part-time. Everyone is better off moving into work – as they generally were under Gordon Brown's tax credits – but if a family with young children works more than 10 hours they will generally earn virtually nothing extra, and some will end up with less. This is because universal credit is withdrawn at a steep rate as people earn more.
Take a typical single parent with two children: if she works a day and a half on the minimum wage, it's worth her while and she takes home, with the credit, £268. But if she decides to work three days a week she only earns £6 more. If she goes full-time, she is actually worse off, falling back with £2 less. This, explains economist Donald Hirsch, author of the JRF report, is because as she earns more the withdrawal of universal credit, taxation and childcare costs are so steep.
With two-parent families the disincentive story is the same. In a family with two young children, if one partner works there is no incentive in universal credit for the second partner to take a job. Don't glaze over, look at these figures: if one parent is working full-time on the minimum wage taking home £346 a week, when the other gets a full-time job, their income generally only improves by £29 for her five days at work. (And she earns less full-time than if she worked three days).
This reversal is a direct result of benefit cuts, not counted into early universal credit plans. Instead, ministers continue to make claims they must surely know to be false. Here's Lord Freud again: "As people move into work and work more hours, they will know that universal credit will be on their side and will mean they are better off from working. This is because universal credit will be withdrawn at a consistent and predictable rate as their earnings increase." Freud and Iain Duncan Smith know this is not true – but they have devised a remedy. Is it to restore the cuts causing this, or to soften the taper so universal credit is withdrawn more slowly? No, there are no new carrots, only their new stick. For the first time people in part-time work will be sanctioned with benefit stoppages if they don't prove they are looking for more hours: "in-work conditionality" is the phrase. Many part-timers desperately want more work but can't find it. Couples who couldn't find 24 hours of work last year had their benefits cut by a huge £4,000, leaving people frantic for extra work. The hidden under-employed are now to be punished as skivers.
The roll-out of universal credit is slowing down, wisely. "Simplification" of merging benefits turns out to be devilishly complex. It will not now go national in October; there be just a few pilots, covering only single young people without children to make the sums easy. Council tax doesn't fit inside universal credit, and DWP can't say how or if free school meals and many other benefits fit in.
One blunder follows another. In case you think raising the tax threshold helps the low-paid, the Lib Dem flagship clashes into universal credit. Taxpayers gain £200 for each £1,000 of personal allowance, but those on universal credit only get £70. As for the mad marriage tax break, if couples get £150 a year, workers on universal credit only get £50. Wasn't it meant to get the poor to the altar?
Policymakers always wanted to merge the tax and benefits system to smooth moving in and out of work. But this small administrative efficiency is suffering computer meltdown, say voices within. Universal credit never could be the great "culture change" Duncan Smith and Freud keep claiming, because every benefit system is forever bound by the same dilemma: how to be generous enough to keep the needy above misery without risking work incentives? How do you taper benefits gently as people earn more without rising too high up the scale? Any system has cliff edges. Benefit cuts make these far worse than under tax credits.
So let's hear no more empty boasts about how universal credit does "simplification" and "making work pay", parroted by Tory MPs clueless about how any of it works. Let's look at incentives. What makes people work? A work ethic so deep-dyed in humanity that mighty battalions of people push brooms, clean toilets, labour in call centres and care homes for not that much more than benefits would pay. Few people make those nice calculations – they just work, as no doubt they will under universal credit's rotten incentives.
Let's look what else is happening. The Trussell Trust reveals that three times more households are turning to food banks in desperation in the three months since benefits were cut. The latest JRF report has also shown how far and fast benefit levels are falling below what surveys say the general population regard as a minimum standard of living: a spare pair of shoes, a one-week self-catering UK holiday, one modest birthday present. The Express and Star report that more than 2,000 people applied for 30 part-time, minimum-wage jobs in a West Bromwich cinema, 66:1. The ONS reports the top 20% pay 35.5% in income tax, while the bottom 20% pays 36.6%. The Resolution Foundation reveals that if interest rates rise by the expected 2%, 800,000 families will be tipped over the edge, spending half their income on mortgages and other debts.
What else about work incentives? The Spectator's editor, Fraser Nelson, points out, as Duncan Smith often does, that the present benefit system can take 98% away from claimants as they earn more, in some rare cases. Universal credit is intended to solve that, he writes, bemoaning the "glacial pace" of its roll-out. "It has never been more urgently needed."
What he doesn't say is that universal credit will withdraw 65p from every pound its recipients earn. High earners protested they wouldn't get out of bed when top tax was 50%, so the chancellor obligingly cut it to 45%. While hard-working, honest people on universal credit leave home at dawn, blinds would certainly stay down in Mayfair mansions if they had to pay a 65% tax rate.