Plans for the mass roll-out of a new universal credit benefit have been challenged after Citizens Advice found evidence that it can lead to extra debt and financial insecurity.
The scheme involves consolidating six existing benefits into a single monthly payment; its proponents say this will help simplify the management of funds.
Lengthy lead times
Citizens Advice's survey of 800 people found that 39% of respondents had waited more than six weeks to receive their universal credit payment. 57% found themselves borrowing more money in order to ‘get by’ during that time.
Gillian Guy, Chief Executive of the charity network, said, “Universal credit is already failing too many people, pushing them into debt and leaving them without the means to make ends meet. The government needs to pause plans to accelerate the roll-out of full-service universal credit this autumn and devote the time and resources needed to tackle the key problems which mean the system is not working.”
Additionally, some users have experienced a number of issues with the application system for the benefit itself. Almost a third of people surveyed noted having to make more than ten calls and sometimes having to wait over 30 minutes in order to get help by phone.
How does it affect you?
The benefit is designed to mirror the way people in work receive their money. It creates a monthly payment that can be easily managed, ruling out the need to make ends meet in between multiple payments.
Administrative and design problems are a central issue to the universal credit roll-out. It's thought that one in four low-income tenants have run up rent arrears as a result of awaiting for the single payment to come through, putting the debtor at risk of eviction and landlords in the red.
While Citizens Advice has already supported in excess of 30,000 people with universal credit issues, its Chief Executive Guy argues that “universal credit is already failing too many people, pushing them into debt and leaving them without the means to make ends meet.”
Dukes Bailiffs Debt Recovery offers a range of debt recovery and advisory services; contact us here to learn more.