Blog: Universal Credit is creating chaos in family finances

By August 10, 2018Uncategorized

Millions of people on low incomes struggle to get by. They have little in savings. They budget weekly or monthly.

They just about manage, but they worry about the cost of living. Any unplanned financial changes – emergency car repairs, broken household appliances or a large gas bill – can throw their finances into complete confusion.

The last thing they need is for the government to create added chaos for them.

Yet that is precisely what Universal Credit is doing – creating chaos in family finances. People are suddenly finding that their Universal Credit payments either stop completely or fall dramatically simply because of the way they are paid. What’s more they can lose hundreds of pounds.

This is just one of the design flaws in Universal Credit that the new report from the Child Poverty Action Group focuses on.

When Theresa May became Prime Minister she told the nation ‘If you’re one of those families, if you’re just managing, I want to address you directly.’ She pledged that the Government she led would be driven ‘not by the interests of the privileged few, but by yours’.

CPAG’s report shows that people not only lose hundreds of pounds but they may also lose free prescriptions and free school meals because of this design flaw.

UNISON identified this problem in 2016 when a member found her Universal Credit fluctuating wildly when her pay was constant. She couldn’t pay her rent and got into debt as a result. UNISON calculates that she lost about £600.

As part of our campaign we wrote to every MP in June. UNISON’s action in highlighting the issue and MP’s enquiries have forced Employment Minister Alok Sharma to admit there is a problem:

‘for some months these claimants receive two or more sets of earnings during one Universal Credit assessment period’ and that ‘this may reduce, or in some cases result in no award of Universal Credit being paid to the claimant that month’

Yet the Minister is not driven by ‘their interests’ to offer a solution. He simply claims that:

‘the government is working with employers to ensure that they use the most appropriate payment practices and comply with Real Time Information (RTI) guidelines in order to minimise these instances.’

UNISON has heard these claims before. When pressed for names, none are forthcoming.

With the migration of two million families on tax credits just over the horizon, this is further evidence that the rollout of Universal Credit should be halted until these design flaws are fixed.

The article Blog: Universal Credit is creating chaos in family finances first appeared on the UNISON National site.


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