Supplementary written evidence submitted by Citizens Advice Scotland (WPS0022)

Follow up evidence for Scottish Affairs Committee – Welfare in Scotland – Universal Credit’s Changing Demographics

Citizens Advice Scotland | January 2021

Scotland’s Citizens Advice Network empowers people in every corner of Scotland through our local bureaux (CAB) and national services by providing free, confidential, and independent advice. We use people’s real-life experiences to influence policy and drive positive change. We are on the side of people in Scotland who need help, and we change lives for the better.

Scottish Citizens Advice network data replicates what is commonly thought regarding the upsurge in claims to UC and the changing demographic of who is making UC claims. Between April and August 2020, CAB evidence indicated that:

›        A quarter (27%) of clients seeking UC advice for the first time lived in SIMD quintiles 4 and 5 (the least deprived parts of Scotland). 30% of new UC clients lived in the most deprived parts of Scotland (SIMD 1).

›        Over 1 in 4 (28%) new CAB clients seeking UC advice were homeowners, who will receive no UC mortgage support for 39 weeks.

›        1 in 10 (11%) new CAB clients seeking UC advice were self-employed, in comparison to 5% of repeat UC clients.

CAS has long called for the level of UC payment to be lifted to a more adequate level. This is particularly pertinent when many people now find themselves claiming UC for the first time and are likely to have financial commitments that outstrip the level of UC payments. Moving to UC from paid employment often entails a significant income shock and UC recipients in these circumstances may face particular financial risks if the £20 uplift is removed, including higher rent and mortgage costs, costs associated with self-employment, and even the cost of transport for those in low-paid jobs which are harder to do from home.

Chart 1 shows UC clients between April-August by Scottish Index of Multiple Deprivation (SIMD). The trend has been that CAB are seeing a greater proportion of new clients from quintiles 4 and 5 (the least deprived). Housing costs and some other services can be more expensive in less deprived areas.

Chart 1. UC clients by Scottish Index of Multiple Deprivation (SIMD) (CAB data between Apr-Aug)

Similarly, Chart 2 shows an increase in the same time period of the proportion of new clients who are owner occupiers or renting from a private landlord. Both groups are likely to experience specific difficulty with UC covering housing costs. Mortage payers are not entitled to any support with housing costs until 39 weeks of claiming UC, and Local Housing Allowance rates will be outstripped by median Private Rented Sector rents – for this group the additional £20 a week (£1040 a year) will be making a much needed contribution to covering housing costs.

Chart 2. UC clients by housing status (CAB data between Apr-Aug)

A third (34%) of all CAB clients seeking UC advice were in part-time or full-time employment, and between April and August CAB saw a notable proportion of new UC clients who are in full-time employment (Chart 7). The chart also demonstrates that those in part-time or full-time work make up around a third of CAB UC clients – highlighting that UC is a critical in-work benefit for those on low-pay.

Chart 3. UC clients by employment status (CAB data)

Those currently working while still eligible for UC are likely to be in low paid, but essential sectors – care work, retail, deliveries – where work cannot be done from home. The extra £20 a week in these instances can support travel costs for the people we’ve all relied on this year.

For more information please contact:

David Scott, Policy Officer (Social Justice)

January 2021

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