Universal Credit: a briefing

This briefing highlights three priorities for immediate action to ensure Universal Credit achieves its goals and helps reduce poverty:

• Universal Credit waiting time: People risk debt, destitution and eviction while they wait at least five weeks to receive their first Universal Credit payment (an arbitrary seven-day wait before being allowed to claim, plus payment one month in arrears). The DWP should get rid of waiting days in Universal Credit. The impact of payment one month in arrears should also be monitored, and reconsidered if it results in rising debt and destitution.
• Stemming the rise in child poverty: More money directly improves children’s health and development outcomes, while child poverty scars prospects, costing the Exchequer £6.1bn per year in lost tax revenue and additional benefit spending. From April 2017, all families with children making a new claim will receive £545 per year less financial support. Families will also receive no additional support for a third or subsequent child (with a few exceptions).This policy alone is likely to push an extra 200,000 children into poverty in 2020/21. This could be prevented by lifting the limit, at an estimated cost of £1.4bn in 2020/21.
• Supporting good jobs: To help ordinary working families Universal Credit must support people to get into good jobs and to get on at work. This requires employment support and progression services to be well connected to the needs of local employers. The arrival of Metro Mayors offers an opportunity; DWP should work with them to develop a devolution deal for employment support.

Looking forward to the Autumn Budget, JRF will be doing further work on Universal Credit.