• Monthly payments
The government thinks this will help promote good budgeting and more closely replicate monthly salary payments.  Campaigners are worried that the shift from weekly and fortnightly payments to this new regime may push claimants recipients into debt. The Social Market Foundation says:

Most households in our sample opposed the idea of a monthly payment. This was the case for the majority of households, who tended to budget on a daily, weekly or fortnightly cycle.

One of the most controversial aspects of Universal Credit is the introduction of a new seven-day waiting period before an individual qualifies for benefit.

What is more, people on Universal Credit will have to endure a wait of one calendar month whilst their entitlement is calculated, and then a further seven-day wait for payment into their account, which will produce a total wait of at least five weeks before people already in hardship  receive any money.

• Benefit payments will go directly to one member of a couple
In cases of domestic abuse and violence, this could give perpetrators command of household income, further enabling them to control and isolate their partners. As Sandra Horley from Refuge points out:

The housing benefit on which refuges depend is the lifeblood of the national network of services that keep women and children safe. But this vital source of income is now at risk. Many of our refuges do not meet the official definition of “supported exempt accommodation”, which means that a lot of the women we support will fall foul of the benefit cap.

This will be particularly damaging for women who pay two rents – one for the refuge they are living in temporarily, and the other for the home they have fled. Women who move on from refuges and resettle in areas of high rent may also be plunged into debt as a result of the cap. Those who accumulate rent arrears may face eviction and be left with an impossible dilemma either to sleep rough or return to their violent partner.

• Direct payments
The prospect of stopping housing benefit payments to landlords and directly paying the claimant is causing a lot of unease. The National Housing Federation says the shift from paying landlords to paying claimants direct for the housing benefit element could trigger unprecedented levels of arrears and increased rent collection costs.

Of all the reforms, the introduction of direct payments to tenants is expected to have the biggest impact – more than 80% of housing associations say it will affect their organisations a great deal or a fair amount,” an NHF report warns. “84% of associations believe that rent arrears will increase as a direct result of welfare changes. The average increase expected is 51%, which, if replicated across the sector, would mean an additional £245m of arrears.

The government has said that “vulnerable” tenants may be excluded (pdf) and has devised an “automatic switchback mechanism” – paying rent to the landlord when a tenant’s arrears hit a threshold level – but there are currently very few details of what constitutes a vulnerable tenant.

There are concerns that more people could be evicted as a result. The BBC obtained figures that showed when the direct payments were piloted in six areas of the country there was a big rise in rent arrears as some tenants failed to pass that money on, with arrears rising from about 2% to 11%.

• Conditionality and sanctions
The government says:

Entitlement to UC is subject to a strict regime of ‘personalised’ conditionality (ie mandatory activity to prepare for and obtain work), backed by tough benefit sanctions (ie loss of benefit) for non-compliance.

The Child Poverty Action Group warns:

The need for more conditionality comes across as a moral crusade, rather than being evidence based … There are concerns that some vulnerable claimants could face repeated sanctions for failing to comply with the demands of the system and that personal advisers and the Work Programme (within a culture of ‘payment by results’) will have too much power and discretion to impose unreasonable requirements on claimants.

The charity warns in a UC training document:

Sanctions, in the form of loss of benefit, are designed to incentivise claimants to meet their work-related requirements and punish them for unreasonable failures. The regime is harsh, and there is concern that some claimants who repeatedly fail to comply with the system could be sanctioned and forced to survive on below subsistence income for long periods. This could include vulnerable claimants with mental health or social functioning problems, who find it difficult to comply with directions.”

A high level sanction can be imposed if, for example, a claimant fails for no good reason to take up an offer of paid work. The higher level sanction is the loss of the standard allowance of 91 days for a first failure, 182 days for a second higher level sanction within a year, and 1,095 days (three years) for another failure within a further year (disregarding “pre-claim” failures).

Hardship payments will be available of 60% of the sanctioned amount for those who cannot meet their “immediate and most basic and essential needs for accommodation, heating, food and hygiene”.

• Lone parents could lose out
The Institute for Fiscal Studies (IFS) calculates that “because of the way the parameters of universal credit have been chosen, couples, and particularly those with children, look set to gain by more, on average, than single-adult families, particularly lone parents, who will lose on average according to our analysis”.

___

For a more detailed critical account of Univeral Credit please see: It’s the design of Universal Credit and not the delivery that presents the biggest concern: from striking to altercasting

Thanks to Robert Livingstone for the illustrations