Universal Credit 5-week wait for cash is ‘pushing people into debt’

A FIVE-week wait for Universal Credit is pushing vulnerable people into debt and hardship, a new report has found.

StepChange and the Trussell Trust are warning that the Government's "advance payments" offered to cash-strapped Brits while they wait for their benefits are not working.

The debt and food bank charities said that the loans are "not a solution" to the wait-time which is plunging claimants further into debt.

The Sun's Make Universal Credit Work campaign is calling for the gap to be reduced to two weeks.

It will help people like single mum-of-two Kylie Goodyear who is now living in a caravan after being evicted because Universal Credit delays meant she couldn't pay rent.

And nurse Therese Nakitende, 28, who was so desperate for cash while she waited that she sold her kids' toys so she could afford to buy food.

Dad Martin Weaver now lives in a caravan because he ran out of cash during his four-week wait.

The loans can be equal to one month's benefit but they have to be repaid within 12 months of them being taken out.

According to the report, a quarter of all Universal Credit claimants had payments slashed by more than 20 per cent to pay back debts, including advance payments, while two fifths saw benefits cut by 10 per cent.

The worst hit are families on low incomes, especially when their benefits are designed to provide only a minimum amount to live on.

For some households, these debts are on top of tax credit repayments.

StepChange believes that a deduction of just 5 per cent would push nearly half of the people it helps who are on benefits into arrears.

The charity's previous research showed that a quarter of those on Universal Credit cut back on buying food to make ends meet and repay the debts.

While the Government's flagship benefit system aims to get people back into work, the report found that 15 per cent of workers with debt woes said they had a negative impact at work, such as arriving late or taking more time off.

A group of MPs issued the same warning about the five-week wait back in January this year.

In February, DWP Secretary Amber Rudd admitted that Universal Credit has pushed people to food banks since being rolled out in 2013.

In November last year, she hinted that the wait-time could be cut down but still nothing has changed.

Now, the charities have teamed up to launch the #5WeeksTooLong campaign to "showcase the harmful impact the five week wait and deductions can have".

Garry Lemon, from the Trussell Trust, said: "It's no surprise that taking money off these already low payments to pay back advance payments pulls people deeper into crisis right at the very point when support is most needed."

Peter Tutton, from StepChange, added: "Benefit deductions for debt repayments are leaving households short of what they need to get by, with many forced to borrow to make up the difference.

"With over a million people already using high cost credit to fill holes in their monthly budget, it must be a priority to not make this debt trap worse."

A DWP spokesperson said: "With Universal Credit your first payment is available on day one as an advance, so people are able to access money right away.

"This is deducted over 12 months in a managed way and we are increasing the number of months that deductions will take place over.

"We understand the burden that debt can place on people and our work coaches provide tailored help with managing finances, including signposting to budgeting support and setting up more frequent payments. Meanwhile safeguards are in place to ensure that deductions are affordable.”

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