Universal Credit: What is it?

by Megan Thomas

“What exactly is Universal Credit and why is it so controversial?” is exactly the question no one wants to ask right now, but feel like they should know. No fear, we’re here to tell you exactly what’s been going on with the Government’s contentious new benefits plan.

Universal Credit replaces Child Tax Credit, Housing Benefit, Income Support, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, and Working Tax Credit with a single monthly payment. If you are on low income or out of work you are entitled to Universal Credit.
So what exactly is the problem with this? These payments can take six weeks to come into your account. This means that people who are on a low income or recently out of work have no money coming in for six weeks. Obviously, your bills don’t just stop for these six weeks, alongside other expenses like food and travel. This means that people who may not have been able to afford to get together enough savings to be able to afford to go six weeks without any income (which is very likely considering that this is primarily based on people on a low income and just out of work) will be affected. There is also the issue of monthly payments, so people have to carefully stretch out their benefit for this amount of time, when it is not a great deal of money to begin with, and it doesn’t account for any last minute expenses (e.g. something in your house breaks). In Liverpool alone, after the trial of Universal Credit, they have seen large increases in the usage of food banks and more homelessness. Even a significant amount of the Conservative Party does not seem to support it, with the vote in the House of Commons getting an extremely low turnout from members of the Governing party.
What has been done against it? Welfare powers were devolved to the Scottish Government under the Scotland Act 2016, as a result of this, the Scottish Government has been able to address some of the key issues with Universal Credit. The Scottish people have the option to change their payments to fortnightly as opposed to weekly, also to be able to give money directly to their landlords. In Scotland, this can be done whether the claimant lives in private or state housing. The policy has also been strongly criticised by prominent politicians like Welsh First Minister Carwyn Jones and has been opposed by other political parties, most notably the Labour party. The Labour party has brought forward a motion to “pause and fix” these welfare reforms, this has been supported by Conservative MP Sarah Wollaston. Progress has been made in that the Universal Credit helpline is now free, when before it was 55p per minute.
Okay, so the other parties are against it and the Conservatives lost the vote, so why is this still going ahead? Votes on opposition day motions are not binding in the Government. This means that despite a vote of 299 to 0 they do not necessarily need to act on this. The full roll out of Universal Credit is due to come in the new year.
Will this affect you? Yes, if your family is on any of these six benefits or likely to ever be in the position where they have to claim one of them.
So, there is everything in a nutshell about Universal Credit, and why even members of the governing party seem to hate it.
If any of the issues in this article affect you and/or you are concerned about money, please contact the Money@CampusLife team who can offer advice and support: http://www.swansea.ac.uk/money-campuslife/


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