A new report published by the TUC has demanded that the Department for Work and Pensions (DWP) carries out a total overhaul into their "fundamentally flawed" Universal Credit system.
The report has recommended a whole host of changes for the DWP to make, including an increase to payments and work allowances along with an end to sanctions and removing the Minimum Income Floor applied to self-employed claimants.
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Birmingham Live reports that approximately 5.6 million people are on Universal Credit as of right now, which is an increase of around 90 per cent since the pandemic began.
In 2018, the TUC had demanded that Universal Credit be scrapped altogether and replaced with a new system that:
- ends poverty
- helps with the additional costs of childcare
- disability and housing
- allows people to work the hours that fit their family circumstances
The TUC has said: "Achieving these principles requires many more changes to our current social security system than simply replacing Universal Credit. In particular, it is difficult to fully achieve these aims within a predominantly means-tested system of social security.
"Means-tested benefits are a major part of the social security system in the UK. Around 60 per cent of all working-age benefits are now means tested."
The new report, published last month, has looked at the issues with the existing system for benefits, and has highlighted potential solutions. The proposal states: "To improve the adequacy of benefits, the TUC has called for the basic level of Universal Credit and legacy benefits, including Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA), to be raised to at least 80 per cent of the national living wage (£260 per week)."
This news has come at a particularly crucial time in which concerns are beginning to rise about the uprating of benefits next year. As the State Pension is set to get a 10 per cent uplift in April next year, the Government continues to refuse a commitment to similar increases for other benefits.
This has prompted fears that other DWP benefits will only see a 5.4 per cent rise in wage alongside the average wise raise - a massive problem of cuts to social security payments the UK has ever seen.
The TUC have also said that switching all existing legacy benefit claimants over to Universal Credit could see issues up until the end of 2024. They said: "There are also serious concerns about the process of managed migration to Universal Credit.
"Claimants will be contacted to migrate; the process requires claimants to end an existing claim and make a completely new claim. It is not automatic, and the responsibility is transferred to the claimant, resulting in stress and anxiety for them.
"Responsibility for the process of managed migration should be on the Secretary of State (rather than claimants), who should ensure that the termination of existing benefits will not cause undue or unnecessary hardship. And the managed migration process needs to be trialled first and then evaluated."
The key changes recommended for Universal Credit
Below is the full list of recommended changes in the TUC's report:
1. Reduce the Universal Credit taper rate further and look at options for different taper rates for different groups.
2. Work allowances need to be increased and extended to those not currently entitled to them. The second earner should have their own independent work allowance too.
3. Basic level of Universal Credit and legacy benefits, including Jobseeker's Allowance (JSA) and Employment and Support Allowance (ESA), should be raised to at least 80 per cent of the national living wage (£260 per week).
4. Financial support for some disabled people is much lower in Universal Credit. DWP needs to offer more than the current 'transitional protection' to ensure disabled claimants get at least the amount they would have done on legacy benefits.
5. Mixed-age couples where one partner is not yet a pensioner can only claim Universal Credit, which pays less than Pension Credit. The older partner being of State Pension age should entitle the couple to be able to get Pension Credit.
6. Non-repayable grants should be available during the five-week wait for the first payment of Universal Credit, rather than advances that have to be repaid from future benefits.
7. Remove the 'punitive' Minimum Income Floor for self-employed people, which bases their benefits on the assumption they are always working 35 hours a week at the National Minimum Wage even if their earnings fluctuate.
8. Sanctions must be scrapped in favour of proper support to genuinely help people into decent work.
9. Stricter conditions on claimants who are working should be dropped in favour of investment in training and development "rather than wielding the stick of conditionality and sanctions."
10. There should be more options for claiming Universal Credit than online applications and communications, including widely available access to jobcentres for those not comfortable with IT or who do not have access to IT facilities.
11. Managed migration onto Universal Credit from other benefits should be the responsibility of the Secretary of State rather than claimants being required to carry out the transfer process themselves.
12. Transitional protection - to keep benefits at the same level when moving to Universal Credit - should be uprated rather than being frozen so it loses its value over time.
13. Employ more staff at jobcentres and service centres. The DWP announced in March 2022 it planned to close 41 sites, putting thousands of jobs at risk. A recruitment drive would reduce pressure on work coaches and achieve better outcomes for claimants as well as making Universal Credit more flexible, rather than reliant on digital-only services.
14. Review the current rules of monthly assessment periods and introduce an 'earnings disregard' into Universal Credit so that income can go up a certain amount without affecting benefit payments.
15. Also introduce a three to six month assessment period to provide more stability and certainty for claimants.
16. Employees should be compensated for any errors by employers in submitting earnings details to the tax office, which can affect their Universal Credit award adversely if PAYE data is submitted late or incorrectly
17. Free school meals should be available to all those on Universal Credit. At present there is an earnings threshold in Universal Credit of £7,400 per year, creating a cliff edge for entitlement which Universal Credit was expressly supposed to avoid. In the long term, every child in compulsory education should be provided with free school meals.
18. Claimants should have options to be paid Universal Credit twice or four times per month to allow them to budget to suit their circumstances, rather than these being exceptional temporary arrangements. And to have a similar option of the housing costs element of Universal Credit being paid directly to the landlord automatically in the whole of the UK.
19. Review the way Universal Credit is claimed and assessed on a household basis, rather than per person, to ensure access to the cash for both partners and the prevention of financial coercion. Beyond this, there is a need to look further into the individualisation of social security payments.
20. The childcare payment system needs to be redesigned to allow the cash to be paid upfront and directly to the provider. Currently, the claimant must pay the provider themselves and get it reimbursed. In the long term, childcare needs to be free at the point of use.
21. Remove support with childcare costs from the Universal Credit amount. Attempts to simplify the system with entitlement all lumped together in one benefit payment can result in hardship if there are any problems with the claim. Also, look into which other elements can be taken out of Universal Credit and dealt with separately.
The DWP has been approached for comment.
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