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‘One in five to need support from benefits system amid employment crisis’ as Citizens Advice Ipswich helps over 500 cases with benefits and employment since lockdown

New research from Citizens Advice reveals one fifth (20%) of UK adults say they have applied or expect to apply for benefits as a result of the coronavirus outbreak. This rises to 68% of people on zero-hours contracts.

In Ipswich, Citizens Advice have supported clients with over 500 queries relating to benefits and employment issues. These issues range from how do I make a claim for benefit, how do the government schemes relate to me, is my employer acting reasonably?

The findings come as government data today shows over 1.5 million households made a Universal Credit claim between 1st March and 12th April. First payments for those who applied for the benefit immediately following the lockdown are due tomorrow.

Figures from Citizens Advice show around six million people in the UK (18% of the total workforce) have already seen their hours cut, been laid off or made redundant.

The charity, which has seen nearly 2.5 million views of its online advice on employment and benefits issues since the lockdown began, says gaps in the jobs protections schemes could be increasing the number forced to apply for the benefit. This includes people who are recently self-employed or at higher risk of coronavirus, such as those who are pregnant or have diabetes.

The swift redeployment of staff by the Department for Work and Pensions has helped respond to an unprecedented surge in demand on the benefits system and ensured people can access financial support.

However, insights from frontline advisers at Citizens Advice show the claims process remains problematic for some groups, such as those who don’t have ID or a bank account or those without an internet connection. Accessibility issues have been exacerbated by the necessary temporary closure of libraries and job centres.

Meanwhile 15% of people anticipate having to borrow money from friends or family to cope with the five-week wait before payment if they do have to apply for Universal Credit.

Citizens Advice is recommending the government make immediate changes to Universal Credit so that those who have lost income as a result of coronavirus can access adequate support quickly without getting into debt.

Nicky Willshere, Chief Executive of Citizens Advice Ipswich, said:

“Behind today’s figures are families whose world has been turned upside down by coronavirus.

“The Government has worked hard to shore up protections for workers and process soaring claims for Universal Credit. But we know that some people are still slipping through the safety net, often with desperate consequences.

“Plugging the remaining gaps in the employment support schemes could protect more jobs. And for those needing support from the benefits system, turning advance payments into a grant would really ease the burden.”

Nelleke van Helfteren, Deputy Manager, Citizens Advice Ipswich, said:

“Since the lockdown, Citizens Advice Ipswich alone has dealt with over 500 cases where clients are seeking advice on benefits and how to claim them as well as worries about their work, and this is without our usual face to face service which helps the most vulnerable people in our community, many of whom currently cannot access our service due to lack of digital connectivity.

“Our advisers are receiving calls every day from people whose livelihood has simply disappeared due to this pandemic. Some lost their jobs or were in unstable work when the crisis hit, and others have no income until the self-employed support scheme kicks in.”

“Staff are working flat out to help them with their concerns. Alongside issues with making an online application for Universal Credit, we’re seeing a lot of people struggling simply because they’ve never had to access the benefits system. There’s a huge demand for advice. We are bracing ourselves as we know that beyond lockdown we will be really stretched to help households get back on an even keel: financially, sorting housing issues, accessing benefits and getting back to work. It is not going to be simple or quick. This pandemic will have lasting consequences for the most vulnerable and those households who never thought they were in that category.”

“We urge people not to worry alone – we are here to help and can be contacted by phone on 0300 330 1151 or by email via this website.”

Ending the benefits freeze won’t stop families facing the choice between heating and eating

MPs voted to end the benefits freeze by agreeing to increase income-related benefits by inflation on Monday.

While a welcome move, new analysis by Citizens Advice shows that almost 4 in 10 households that seek debt advice and receive these frozen benefits would still not have enough money to cover their costs by 2024 – even if these rises were to continue in future years.

Citizens Advice has helped people such as Sheila, 64, who works part time and receives Universal Credit. Her payments can change on a monthly basis, making it hard for her to budget and cover her monthly costs. She is trapped in council tax and rent arrears, and has had to resort to a foodbank.

She said:

“Quite often I don’t have any electric, so I’m very cold. I can’t even make a hot water bottle to keep warm, or make a hot drink. I have to stay under the duvet.

“Even in the months when I am paid my full Universal Credit and wages it’s still really hard to afford everything, including food.

“It’s all swings and roundabouts, I just don’t have enough money coming in to pay the council tax and rent arrears, the actual council tax, buy food and top up my gas and electric.”

The analysis from Citizens Advice found that the number of people who are unable to cover their living costs has increased since the benefits freeze began in 2016. In the first five months of the current financial year, 40% of the people the charity helped with debt who claim income-related benefits didn’t have enough money to cover their living costs – an increase of 25% since the freeze came into effect.

Citizens Advice is continuing to call for the government to help address this problem by increasing income-related benefits by the Consumer Prices Index (CPI) plus 2% for four years, and to recalculate Local Housing Allowance, which determines housing benefit for private tenants. This will help provide families with financial security and protect people from further hardship.

It also argues that changes to benefit levels need to be accompanied by wider reforms to ensure the benefits system as a whole provides people with the right support. This includes ensuring Universal Credit gives people enough to live on by reviewing areas such as the amount of money retained by working claimants, and deductions for those dealing with debts or repaying advance payments.

Dame Gillian Guy, Chief Executive of Citizens Advice, said:

“Our evidence shows that increasing numbers of people simply don’t have enough money to make ends meet. While a step in the right direction, increasing benefits by inflation will not go far enough to help solve this problem.

“The benefits system was created to support people in times of need. The government should show it’s serious about meeting this ambition by properly investing in working-age benefits, and making sure fewer families are left in a downward spiral with no way to pay their bills.”

Disabled people in Suffolk can be more than £300 a month worse off under Universal Credit

Disabled people in Suffolk can be more than £300 a month worse off under Universal Credit, Citizens Advice in Suffolk reveals

Citizens Advice across the county have said that some disabled people in the area could be around £300 a month worse off under Universal Credit compared to the previous system.

The Citizens Advice across Suffolk has helped 3,500 people with Universal Credit since it was rolled out.

Of these, 1,160 were disabled or had a long-term health condition.

A report published by national Citizens Advice on Friday – Universal Credit for Single Disabled People – revealed a significant drop in financial support for some single disabled people in a range of circumstances.

This includes losses that can be more than £300 a month for working disabled people because of flaws in the design of the new benefit. The Work Allowance is meant to improve work incentives for disabled people in Universal Credit.

However, in practice, the Work Allowance can only be accessed through the Work Capability Assessment, which gives benefits awards to people unable to work, rather than for disabled people who can work.

This creates the situation where a worker must be assessed as not fit for work to receive targeted in-work support.

Citizens Advice across Suffolk are calling on the government to make changes to the design and the amount of financial support in Universal Credit to make sure disabled people aren’t penalised when they claim the new benefit.

Nelleke van Helfteren, Deputy Manager of Citizens Advice Ipswich, said:

“We see the toll that Universal Credit can have on disabled people across Suffolk.”

“They can be hundreds of pounds worse off than under the previous system – even when they do get the support meant for them.”

“This money is desperately needed to cover key costs including essential bills and stop people falling into serious financial difficulty.”

“The government must fix Universal Credit and increase the financial support disabled people can receive under the new benefit.”

Universal Credit risks leaving some workers’ financial stability hanging in the balance

money graphicUniversal Credit could risk adding to the financial instability of low-income workers, with those who are self-employed likely to come under the most pressure, new research from Citizens Advice finds.

Today the charity has released two new reports on Universal Credit, examining the impact of work allowance cuts on people’s budgets, and why its design can leave self-employed workers at a financial disadvantage.

Citizens Advice analysis shows a self-employed worker who receives Universal Credit could be worse off by £630 a year compared to an employee on the benefit, even if their year-end earnings are identical.

The report highlights issues with the Minimum Income Floor, a rule that assumes everyone claiming Universal Credit who has been self-employed for a year or more is earning the National Minimum Wage (NMW).

If they earn less than the NMW one month, their Universal Credit payment won’t make up the difference. But if their monthly earnings go over the NMW, their benefit payment will be reduced accordingly.

The charity says this design flaw is unfair and risks causing financial hardship as self-employed workers often earn different amounts from one month to the next.

One family helped by Citizens Advice had to visit a food bank as a result of having less money to pay their bills because of the Minimum Income Floor. In order to boost their Universal Credit payment, the father was forced to give up his computing business and stop work altogether, while the mother cut short her maternity leave to return to work.

The second report finds that employees could also be at risk of financial insecurity when they move to Universal Credit. In 2015, the Government announced a series of cuts to the benefit which will result in 2.1m working households receiving less money under Universal Credit compared to the old benefit system.

One of the biggest cuts was to the work allowance, resulting in workers seeing a reduction in the amount of hours they can work before their Universal Credit payment starts to decrease.

Citizens Advice asked 877 people across the country receiving in-work benefits how they would cope with a £100 drop in their monthly income, roughly the average amount affected households stand to lose from the reduced work allowance.

One in four workers (26%) said they would not be able to top up their income through employment even though they might need to, with 1 in 3 (33%) of those saying this is because they work full-time already.

Caring responsibilities (23%) and having a disability (18%) were other reasons workers gave for not being able to make up the £100 shortfall through work.

Universal Credit is currently being rolled out, and the number of claimants is set to double over the next year, increasing by 1.2 million. A final completion date has been set for 2022, at which point an estimated 7.2 million households will be claiming Universal Credit – 3.9 million of them in work.

The charity is calling for the Government to review both the lowered work allowance and the Minimum Income Floor to give workers better financial security and ensure they are incentivised to progress in work.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Despite the labour market changing significantly in the last decade, including a rapid rise in self-employment, Universal Credit is still better suited to those with regular jobs.

“The Government has shown it is prepared to act to improve Universal Credit as new facts come to light – an approach we strongly support.

“It now needs to look again at the design of the benefit to ensure self-employed and agency workers aren’t left at a financial disadvantage.

“It should also reassess the work allowance reductions to ensure workers who can’t increase their income through employment aren’t left struggling to make ends meet, while better incentivising those who can.

“A failure to do this risks undermining two of the core purposes of Universal Credit – to incentivise people to move into and progress in work, and provide low-income families with financial security.”

3 in 1 for Wednesday 27 September from Citizens Advice Ipswich!

  • Ipswich & District Citizens Advice Bureau 43rd Annual General Meeting PLUS
  • Launch of 3Ds Project with ISCRE – our Guide on disability related reasonable adjustments to Universal Credit PLUS
  • Fixing Universal Credit – update from our national campaign – Presentation by Guest Speaker – Afzal Rahman, Principal Policy Researcher from Citizens Advice

I am writing to invite you to the AGM of the Ipswich & District Citizens Advice Bureau. The AGM will be held at 12.00 noon on Wednesday 27th September 2017 in the Meeting Room at 19 Tower Street, Ipswich, IP1 3BE.

We are delighted to be joined by a senior policy researcher from our national Campaigns team who will talk about how the Universal Credit rollout is going for clients across the country and our insight nationally. He will be highlighting our national campaign – We’re pushing hard for a pause in the rollout until the problems which have been identified across Citizens Advice bureaux are resolved.

We are also delighted to launch with ISCRE our jointly produced leaflet on disability related reasonable adjustments to Universal Credit.

Following the AGM I would like to invite you to join us for refreshments.

I would be grateful if you could confirm your attendance beforehand – RSVP via this web site or phone 01473 219770.

If you have any questions or would like more information then please feel free to contact me. I look forward to seeing you at the AGM.

Nicky Willshere

Chief Officer

Help is at hand from Ipswich Citizens Advice as Universal Credit roll out continues

Ipswich Citizens Advice is encouraging people to turn to them for help if they have questions about Universal Credit and how it affects them, as new government figures reveal 50 people across Ipswich are now on the benefit and with all single, non-home owning people claiming an out of work benefit being moved on to this benefit, the numbers will grow exponentially.

Since its introduction in Ipswich in November 2015, Ipswich Citizens Advice has helped people with 17 issues relating to Universal Credit. This represents almost a third of claimants.

Most enquiries to Ipswich Citizens Advice are about who is eligible for the benefit and requests for help with the application process. ‘We are keen to help people through this new benefits roadmap and particularly to help them understand the major changes that claiming this benefit will mean for them in terms of payment periods and the necessary budgeting and money management that will be needed to avoid debts building up or threatening tenancies,’ says Nelleke van Helfteren, Deputy Manager at Ipswich Citizens Advice.

Data released by the Department for Work and Pensions on 17 February shows that nearly 200,000 people are now on Universal Credit.

Universal Credit rolls six working-age benefits into one single monthly payment, supporting people who are on a low income or out of work. It is being introduced in stages across the country, in the first instance to single people who are making new  claims. It will eventually be rolled out to couples, families and people who are sick or disabled.

As new Universal Credit figures are released, Ipswich Citizens Advice is sharing its five key things you need to know about Universal Credit:

  1. Universal Credit is a new benefit for people in and out of work, which will eventually merge six benefits into one: Jobseeker’s Allowance (JSA), Employment and Support Allowance (ESA), Income Support, Working Tax Credits, Child Tax Credit and Housing Benefit. Currently you can still apply for ESA separately from Universal Credit.
  2. Universal Credit does not include Council Tax Support – you will still need to apply for this locally.
  3. You apply for Universal Credit via a single application; you’re usually expected to do this online, but you can apply over the phone or in person if you need to.
  4. Universal Credit payments are made on a monthly basis, rather than weekly or fortnightly like previous benefit.
  5. You can ask for an advance payment of Universal Credit to help you get by while you’re waiting for your first payment. This is called a ‘short term advance’.

Nicky Willshere, Manager at Ipswich Citizens Advice said:

“Many people will need help getting to grips with Universal Credit. Since it was introduced in Ipswich there has been a gradual increase in the number of people turning to us for help with their Universal Credit claim. We are very pleased that we now have an income maximisation worker who is assisting our clients with money management and budgeting to support them through this changing landscape.

“Simplifying welfare and making every hour of work pay are good principles. We know that without the right help and support people across Ipswich may struggle with Universal Credit and how to manage their money on the new benefit. The Jobcentre has an important role to play in making it clear that help is available and that it effectively signposts to where people can get the support they need.”

Benefits is one of the most common type of enquiry people turn to Citizens Advice for help with and Ipswich Citizens Advice helped people with 2796 benefit queries in the last year.

In the last 12 months local Citizens Advice across England and Wales have helped people with over 150 Universal Credit issues every week.

For more information contact us on 0300 330 1151 or see our website citizensadvice.org.uk