Guest blog: “Universal Credit has made me hit rock bottom”

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A blog post by
Jenny Luckett
Public Affairs Adviser Riverside housing association

“I am in so much debt with my family. I’m in arrears with my rent. Arrears with my council tax I feel I just can’t get straight with everything. Going on Universal Credit it has made me hit rock bottom

Susan* is just one of many of our tenants who have found themselves struggling and in debt when they applied for Universal Credit (UC).

Over the past three years, Riverside has conducted an in-depth survey with our tenants on UC to find out what their experiences have been like.

This year’s findings showed that for tenants claiming UC, the situation has got worse.

While Riverside is supportive of the simplicity that an integrated benefit like Universal Credit could bring, we are seriously concerned that the way it is being implemented means it is causing increased debt and arrears for our tenants.

Indeed, arrears for our tenants on UC are three and a half times higher than those in receipt of Housing Benefit or paying their own rent

Since moving onto UC, almost two thirds of our tenants surveyed (63%) have seen an increase in debt since moving on to Universal Credit and almost three-quarters (71%) said they find it more difficult to keep up with household bills.

In order to make ends meet, more than three-quarters (78%) said they have to rely on loans from family, friends or from a private loans provider.

Shockingly, two-fifths (41%) of our tenants have had to rely on foodbanks in order to feed themselves and their family after moving on to UC – this is 10% increase from last year.

Tenants also reported going without food, heating and showers in order to get by. Anne*, a tenant in her 40s, said “We don’t have enough money to support us so we are having to visit the food bank more regularly.

“[We are] having the odd meal at a friend’s house but we go days without eating or showering because I can’t afford to put enough gas on to last through; I’ve had to sell most of my things to try and get us by”

For over 80% of our tenants, the 5 week wait caused them financial hardship.

This is why Riverside is proud to back the Trussell Trust’s #5WeeksTooLong campaign – our tenants cannot wait 5 weeks for their first payment.

The DWP has said that the answer to the 5 week wait is to take up an advance and then repay this over 12 month period.

However, the repayments are taken at fixed rate so 40% of the Universal Credit standard allowance is deducted (though this will reduce to 30% from October, it still won’t take affordability into account).

We asked our tenants about advances and found there is a high take up with 77% of our tenants requesting one. But the advance repayment process is causing financial hardship for two-thirds of those who accepted an advance.

This leaves our tenants stuck between a rock and a hard place: if they accept the advance they face financial hardship because of the ongoing deductions from their UC but if they don’t take up an advance, many have no way of meeting their basic needs during the 5 week wait.

And it was clear that our tenants felt they had very little choice because most do not have savings that they can rely on – and whilst there is a minimum wait for 5 weeks for a payment, many waited much longer. Indeed, a third of those surveyed waited over 6 weeks and 13% waited over 8 weeks.

Mike* another of our tenants said: “I knew and accepted paying it [the advance] back but it only pushes you into hardship over a longer period. I do regret having advance payment but I had no other option.”

What’s the answer?

Riverside would like the Government to take three key steps.

Increased data sharing

Firstly, increase data sharing between housing associations, local authorities and DWP.

Informing housing associations when tenants are notified of their need to claim Universal Credit allows housing associations to plan in support for residents before, and during, the claim process which could help to alleviate the hardship caused by five week wait.

If housing associations only find out when they get a rent verification notice, it is often too late to help their tenants avoid getting into debt.

Extending Universal Support funding

Secondly, extend Universal Support funding to those social housing landlords who provide welfare advice and support services.

Housing associations know their residents well and are often best placed to support them. Providing this funding to housing associations could provide additional resilience to the Universal Support programme.

End the 5 week wait

Finally, and most crucially, listen to growing list of organisations putting their name to the #5WeeksTooLong campaign and end the 5 week wait immediately.

Until these changes are made, instead of acting as a safety net, Universal Credit will continue to drag people into debt and despair.

*names have been changed to protect identies