Written evidence from Homeslink [UCW0088]

1. Introduction

1.1.  Homeless Link is the national membership charity for frontline homelessness agencies. With over 750 members, we work to improve services and campaign for policy change that will help end homelessness and ensure that everyone has a place to call home and the support they need to keep it.

1.2.  We are a member of the Making Every Adult Matter Coalition (MEAM), alongside Clinks and Mind, formed to improve policy and services for people facing multiple needs. Together the charities represent over 1,300 frontline organisations that have an interest in the criminal justice, substance misuse, homelessness and mental health sectors. We support partnerships across the country to develop effective, coordinated approaches to multiple needs that can increase wellbeing, reduce costs to public services and improve people’s lives.

1.3.  This response incorporates evidence from some of our members’ beneficiaries. Homeless Link would be glad to elaborate further on any of the information provided. For any questions about this submission, please contact Sue Christoforou, Policy Manager at sue.christoforou@homelesslink.org.uk.

2. 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?

2.1.  Built into the regulations that complement the original legislation is provision for an assessment period of one calendar month followed by a further seven days’ delay in payment – the five week wait. Between February 2018 and January 2019, well over half (57%) of UC claimants needed an advance payment to cover this initial five week period without income.

2.2.  This means claimants without sufficient resource to pay their living expenses are immediately indebted and, once deductions to repay the advance are made, are left with an extremely low income that will often mean they are unable to purchase essential items such a sufficient food, clothing, footwear or toiletries. Claimants in such circumstances will have to survive on these extremely low incomes for up to the maximum repayment period (currently a year).

2.3.  Problem debt is damaging. The negative impact of debt on mental health is well-documented, as is the reality that living with mental health issues, such as depression and/or anxiety, makes dealing with debt so much more difficult.[1]

2.4.  We believe that a loan is an inadequate response to support claimants whose circumstances have meant they have been unable to save and who have no income.

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

3.1.  Whilst three quarters (74%) of claimants on legacy benefits have priority debts, more than four fifths (82%) of UC claimants had priority debt. Whilst less than a third (31%) of people on legacy benefits have rent arrears, this rises to over two fifths (44%) of UC claimants.[2] Rather than add further to that debt, we believe the current advance, which is a loan to be repaid, should be provided on a grant basis. Were the advance made available on a grant basis, claimants would not be immediately indebted/further indebted from the very outset of their claim.

3.2.  Additionally, when deciding whether to loan a claimant a UC advance, DWP makes an assessment of the claimant’s ability to repay that loan. Where it’s determined that a claimant cannot repay the advance within the designated time period (currently 12 months), the claimant does not receive an advance. In these instances, claimants have extremely limited options: sleeping rough; relying on charities for food; resorting to survival crime. Were the advance a grant, this extreme deprivation would not occur.

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

4.1.  We know that some of our members have had to divert funds away from enrichment activities designed to support people out of homelessness to fund the urgent, basic needs of their clients. This reduces their resources to provide strategic support, which in turn means the route out of homelessness is slower. It is difficult to quantify the financial cost of delayed recovery. It is more difficult still to quantify the psychological impact of that delay. Were the UC advance provided on a grant basis, our members would be better able to maintain investment in strategic support activities.

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

5.1.  As we understand it, DWP take the position that the necessary re-coding of the UC software to switch the UC advance from a loan to a grant is challenging. However, the DWP response to the covid-19 pandemic has demonstrated that challenges can be overcome and that the necessary technical adjustments can be made.

April 2020