Universal Credit

Baroness Sherlock Excerpts

Thursday 9th March 2017 Lords Chamber

Asked by

[Baroness Sherlock]

To ask Her Majesty’s Government what assessment they have made of the impact on claimants of the time taken between applying for Universal Credit and receiving payments.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Henley) (Con)]

My Lords, the universal credit assessment period and payment structure is a fundamental part of its design, reducing welfare dependency by mirroring the world of work. Safeguards are in place to help the minority of claimants who are in genuine need to transition to universal credit. This includes advances and budgeting support. We continue to work closely with landlords, local authorities and other organisations to ensure claimants are supported.

[Baroness Sherlock (Lab)]

My Lords, if only it were that simple. In 2013 the Government introduced a rule that when you first claim benefit you are not entitled to any money for the first seven days. The problem is that universal credit is paid monthly in arrears so it means you get no money at all for six weeks. That does not sound very long, but the typical family in social housing has only £200 in savings and some people are in debt. Social landlords are now saying that tenants are getting into big arrears and people are turning to payday lenders and even loan sharks. Even the noble Lord, Lord Freud, recently told the Work and Pensions Select Committee that the seven-day waiting period should be dropped. Please can the Minister not be complacent about this. Will he go back to his department, look again at the evidence and please take action before anyone else is pushed into debt?

[Lord Henley]

My Lords, I repeat what I said in my original Answer. It is a fundamental part of the design. That argument was put forward by my noble friend Lord Freud during the passage of the Bill and was debated at great length. We recognise that this does not necessarily suit everyone. That is why I again made clear in the second part of my Answer that there are safeguards in place. We introduced universal credit advances for new claimants. Claimants can apply for an advance immediately if they are in need and can receive up to 50% of their indicative award soon afterwards. To go back to the original point, it is important to make sure that we mirror the world of work where 75% of employees are paid monthly.