Written evidence from Southwark Law Centre [UCW0024]
We would say very little. Many claimants will have pre-existing debt and for many, this will include priority debt such as rent arrears. The vast majority of those who need to claim UC have negligible or no savings. And, until this year, there has been no increase in the rates of benefits for the past five years. All of which makes it impossible for many claimants to budget. Very many claimants will therefore often be understandably reluctant to take on further debt in the form of advance payment – particularly when the rate of recovery of the advance is so high. So far as we are aware, the mitigations introduced have not seen any reduction in things like use of and reliance on food banks – something one would expect to see if the measures were proving effective.
It is also worth pointing out that advance payments are themselves not without problems;
- What problems do claimants still experience during the five week wait?
- Is it possible to estimate how much this would cost the Department?
The Department should have the figures and data to answer this question. However, it should not be forgotten that the move to monthly payments with UC was never promoted as a cost cutting exercise. Instead, if we are to be honest, it was trailed as an exercise in social engineering; we were told that it would help claimants to budget, to behave ‘more responsibly’ and that, as the vast majority of employers now pay monthly, it would also help claimants prepare to return to work. All of these are nonsense, but the last particularly so – for many UC claimants, the type of employment they might be expected to obtain is very often not paid monthly.
Further, we should be clear that our proposal to return to fortnightly payments is also a proposal to do away with monthly assessment periods. We do not view this as something which need pose a significant problem. The DWP has long experience in assessing the earnings of the employed and self-employed for those whose benefit is paid fortnightly (i.e. in the context of legacy benefits). The legislation for this already exists for legacy benefits and provides an already proven template for the amendments that would be needed to the UC regulations.
- Is it possible to estimate any costs or savings to third parties (for example, support organisations)?
Unsure. Those organisations which now run/provide foodbanks in addition to their ‘core’ services ought to see considerable savings.