Universal Credit Redrafted - But is it Enough?

  • The Universal Credit regulations have been redrafted, following major concerns voiced by the sector, but will this change any of the fundamental problems being highlighted?

    Before the regulations are released later this week, The Department of Work and Pensions have added an additional category of payment following much criticism.

     The new regulations that were published in the summer listed only three categories of eligible charges for services, and left a large area of charges uncovered.

    Following criticisms from landlords and the Social Security Advisory Committee, an additional category has been added, and they now include payments for the up-keep of communal areas, to maintain a good standard of accommodation, for communal services and for accommodation-specific charges.

    The DWP will publish guidance in the next few weeks setting out exactly what charges will be eligible.

    The government has also changed the wording of regulations relating to benefit for victims of violence who have to leave their home to all victims of violence in the home. An earlier version only gave payments to victims of violence by partners or family members, which led to concerns that victims of racist attacks and abuse by non-partners in shared houses could be unable to claim.

    Overall, the changes do still leave the regulations unclear and there are worries that certain services will become ineligible, but the DWP says it does not intend to change service charge eligibility.

    However, will this change in wording be enough to make universal credit beneficial?

    Earlier this week, the government admitted that even more households were going to lose out than previous calculations. DWP said that 2.8 million households will get a lower entitlement to benefits, compared with a figure of 2 million announced in October 2011 after officials first considered how the changes would affect claimants.

    About 800,000 households will see an average loss of £137 a month, 300,000 families who will be hit the hardest will lose as much as £300 a month. There will also be around 200,000 single parents who will receive lower awards under the new scheme than the current system.

    The mains reasons for this change seem to be that the deteriorating economic environment appears to have added £700m to the costs of the policy, and also from looking into it further, government officials have found that universal credit is less generous than expected.

    It will also have been affected by George Osborne's announcement in his autumn statement that all working age benefits will increase less than the rate of inflation for the next three years.

    Following the release of the most recent assessment late on Tuesday this week, there have been numerous criticisms on how the reforms will affect vulnerable people.

    Ellen Broome, policy director at the Children's Society, said:

    We have some serious concerns about how it will affect some of the most disadvantaged children and families. Some of our poorest working families will struggle to afford vital childcare. Our evidence also reveals that many disabled children and disabled lone parents will be significantly worse off.

    Labour have pointed out that the amount being saved from the scheme seems to be lessening, as the 2011 impact assessment claimed that universal credit would reduce administrative costs by £500m due to its reduced complexity.

    This has been revised down to £200m, and it also appears to be getting more complex with each time errors are corrected and more criteria is added

    Liam Byrne, the shadow work and pensions secretary, said:

    Universal credit is now set to be a car crash for 2.8 million families who will be worse off than under the current system. That's nearly 50% more than when plans were first published.

    The very people this government has let down are being asked to pick up the tab for ministers' failure. 300,000 families on middle and modest incomes will lose £3,600 a year - that's £300 a month. We were promised a welfare revolution but universal credit is descending into universal chaos. Instead of fixing welfare reform, this government is now just flogging working families.

    Before the announcement this week of more families being worse affected by universal credit, Labour had already given strong indications that they would oppose the bill. In an interview with the BBC, Chuka Umunna, shadow business secretary, said:

    We haven’t seen the bill but I think unless fundamental changes are made to the proposals that we’ve seen so far, I think we will struggle to support it.

     

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