Universal Credit: What is it and what does it mean?

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In a few years the benefits system will have entirely changed, with Universal Credit rolled out to all corners of the country.

The new system is currently in use by around 1,000 city residents, with a full roll-out due next summer.

First trialled in 2016, the new system works as a single monthly payment for people in or out of work.

It replaces some of the benefits and tax credits such as housing benefit, child tax credit, income support, working tax credit and income-based jobseeker’s allowance.

Those that apply will not be paid for the first seven days, but will receive the benefit a month after these seven days – which is known as an assessment period.

Last month, Labour’s leader Jeremy Corbyn put pressure on prime minister Theresa May to postpone an extended roll-out of the new system due to concerns that claimants were facing financial woe and evictions due to a six-week waiting period.

An emergency debate was held in the House of Commons, but employment minister Damian Hinds said that the roll-out would continue.

The full roll-out for the area would see the scheme come to Portsmouth in June and to Fareham, Gosport and Havant in August.

We spoke to outgoing work and pensions minister Penny Mordaunt MP and Portsmouth unions and support charities to get their views on the change.

FOR - PENNY MORDAUNT MP

THE complexity of the benefits system was causing huge problems for people as they moved off, on and between benefits, having to fill out forms, go through assessments and meet different criteria each time.

The system penalised people for trying to get on. People were understandably reluctant to take up a job offer for fear that, if it did not work out, they would have to start the process of applying for a benefit all over again, and they were trapped by rules about the number of hours they worked because of the amount of benefit they lost if they worked more.

Universal Credit (UC) is different. It replaces the previous complex system of six main out-of-work benefits with one simple monthly payment. It offers unprecedented support personalised for an individual’s needs, for example if they are poorly or if they have children to support. As well as financial support, people are given tailored help to get into work, if they are able to, and increase their earnings.

Under UC, claimants are better off when they move into work because it smooths this path, gradually decreasing as they earn more and replacing the benefits cliff edge of the past.

Most agree UC is much better than previous systems, and where it has been introduced its benefits are clear.

People like the simplicity and certainty and they can get on without obstacles or disincentives being put in their way. The more they work and earn, the better off they are. And it also gets more people into work faster than the old system.

We are introducing UC slowly. A total of eight per cent of people who could be on it now are, and in Portsmouth about 1,000 people are receiving it. We’ve been learning and improving it.

Critically one of the improvements so far has been reducing the time it takes for people to get money— which can now be done on the same day as an application.

AGAINST - CITY UNIONS

Universal Credit (UC) is causing concern for Alan Burgess, of Portsmouth’s Unite the Community union branch.

Notably, the six-week delay that has been taking place in areas across the country where the system has been rolled out.

He said: ‘Structurally, I am very concerned about the six-week delay that people are experiencing. This is impacting on people who have little savings, who will struggle to wait that amount of time, likely to be in debt themselves and not have a great deal of resources.

‘In Suffolk, it has been found that there have been delays of over 10 weeks, leading to evictions. If it is further rolled out in Portsmouth, it will hit the city very hard.

‘Vulnerable people will be facing eviction and could very well be made homeless. This follows seven years of austerity, which comes after waves of cuts against the most vulnerable.’

Mr Burgess is organising a protest against UC outside Ms Mordaunt’s constituency office at Lakeside North Harbour today from 3pm.

Jesse Sharp worked as a support worker in Portsmouth for eight years. He fears the impact Universal Credit will have on those who struggle with mental health issues.

He said: ‘People with mental heath issues are not going to know how to deal with it. Universal Credit is still not providing answers as to those receiving clear payments. Universal Credit is not quick, it is not easy and most of all, it is not simple and it needs to be so those that receive it can understand it better.’

Cal Corkery, who works with a homelessness charity in the Portsmouth area, added: ‘I have serious concerns about Universal Credit. Where it has been implemented there have been significant increases in rent arrears and consequent rises in evictions and homelessness.

‘Homelessness professionals fear an influx of new clients as a result of the rollout, putting greater pressure on services which are already being stretched to breaking point.’