Written evidence from Unite the Union – Essex Community Branch [UCW0082]

Unite the Union – Essex Community Branch

This report is based on evidence given from Universal Credit Claimants across Essex.  Evidence has been gathered from claimants outside Job Centres in Colchester, Clacton on-Sea, Witham and Chelmsford from 2017-2019 and more recently by phone calls to members across Essex made during the Covid 19 crisis and lockdown in April 2020.  As such, this contribution is representative of the views of Universal Credit claimants; from those with direct, lived experience of the impact of Government policy.

It has been well documented that Universal Credit is not fit for purpose.  In 2018 Philip Alston, the UN Special Rapporteur on Extreme Poverty and Human Rights clearly demonstrated that Universal Credit is a systemic failure.  The UN investigation into poverty in the UK clearly identified Universal Credit as a main cause the alarmingly high levels of poverty and deprivation experienced by people living in the world’s fifth largest economy. Philip Alston’s report alerted the UN that Universal Credit was putting the country on a trajectory of increasing poverty and deprivation.

The report to the UN Human Rights Council included some recommendations to the UK Government in the form of measures that would halt and reverse this shameful trajectory. Eliminating the five-week delay in receiving initial UC payments was specifically mentioned in the set of recommendations to the UK Government.[i] It is very clear that Universal Credit must be radically reformed.

Unite Community – Essex is representative of marginalised groups and unemployed workers and as such we welcome this opportunity to contribute to this assessment of the way Universal Credit payments are made.

Please see below points under consideration in bold followed by our responses. 

1 – To what extent have the mitigations the Government has introduced so far (e.g. Advance payments) helped to reduce the negative impact of the five-week wait for UC claimants?

        - What problems do claimants still experience during the five-week wait?

An Advance Payment does not mitigate the hardship of the five-week wait. It merely slows down the inevitable decline into debt and mental health problems. 

People are claiming benefits because they find themselves without money for subsistence needs they are experiencing a high level of stress and anxiety and they deserve to be treated with dignity and respect.

Claimants need to be enabled to return to employment.  This requires optimum health and wellbeing. The reality is that applying for Universal Credit not only plunges claimants into debt but it very often induces serious and long-term mental health problems.

Mitigating measures such as ‘advance payment’ may provide some temporary financial relief. But claimants are still having to make choices between credit for a their phone (essential for job searches), money in the electric meter or paying rent. Advances are repayable and this is always at the forefront of people’s minds so it tends to compound feelings of fear and anxiety. Advance payments provide only very temporary relief and may induce some long-term negative effects

Applying for Universal Credit causes many claimants to experience deep financial uncertainty that sometimes lasts for months. Claims can sometimes take much longer than five weeks to get processed. In some cases it has been reported that if a claim gets interrupted, from a temporary change of circumstances for example, then UC payments are stopped and a claimant will need to begin a new claim. This new claim would be subject to the five- week wait for first payment and the claimant would need to apply for another advance.  This increases a claimant’s debt and they carry that burden.  One claimant reported that he had been living off advances for months while his claims were stopped, and started through various complications.  Eventually he declared bankruptcy and was absolved from the responsibility of making repayments for those advances. This had caused deep anxiety and depression leaving him in a state where he was then unfit for work.

Despite advance payments, claimants are very often reliant on their personal support network for cash to meet their basic needs.  Sometimes this has meant that their debt is offset to the friends and families of claimants.  This can put a strain on the relationships that so essential in supporting people in crisis caused by episodes of unemployment or ill health. 

2. What is the best way of offsetting the impact of the five-week wait?

Eliminate the five-week wait. For claimants migrating from legacy benefits there should be no changes in terms of when how and payments are made.

For new claimants a non-repayable advance would be the most helpful and it should be unconditional and made available for all new claims. 

        - Is it possible to estimate how much this would cost the Department?

No comment

        - Is it possible to estimate any costs or savings to third parties (for example, support organisations)?

In any state, it is the Government’s duty to ensure that all members of society have the means to participate in that society. Citizens pay taxes and rightly, they should expect some state protection.

When people have no income they need access to money to pay for basic needs such as housing, food, transport and Internet access.

If access to state support is unconditional and provided from Day 1 then administration costs are kept low. This would reduce the load on charities and benevolent organizations that are currently providing essential services such as food banks and homeless shelters. Under current policy the state is reliant on charitable organizations to look after those in poverty. Claimants are people (workers) experiencing difficult circumstances and should be spared the indignity of having to rely on the charity of fellow citizens. 

When claimants have been asked how state welfare could be improved a recurring wish is that they would be given some dignity.

Most claimants get through the five-week wait for the first payment by borrowing money from friends and family who are often in strained financial circumstances themselves. They are willing to help during a crisis but it can become burdensome for people and important relationships get damaged. Other claimants have reported that they would rather starve than ask family or friends for help so they isolate themselves and are harmed in other ways. Invariably, the five-week wait leads to increased feelings of stress and anxiety making it more difficult for a person to properly manage their crisis.

Many claimants have reported that claiming Universal Credit had caused a very rapid decline in mental health that has caused disability and long-term unemployed.  Our advice to the DWP is that with the right approach, one that affords financial support and dignity, the state can enable people to bounce back from crises and quickly return to full participation in society.

3. Are different mitigating options needed for different groups of claimants?

No.  Universal Credit has been designed as a simplified system of welfare administration.  Any additional complications in the application process would only serve to delay some claims.  When people are in a crisis they need support to be given with immediate effect and unconditionally.

4. Are there barriers or potential unintended consequences to removing the five-week wait—either for claimants or the Department? How can they be overcome?

NONE – just give people the support they need during times of crisis.  Workers pay taxes and National Insurance contributions; the Government has a duty to support all members of society; including those who find themselves in financial difficulty through ill health or unemployment.

April 2020