Universal credit during coronavirus: now is an opportunity to fix it
As many in the UK turn to the benefit, a new study of Northern Ireland claimants shows how it could be better implemented
Deirdre McCausland says that the struggle to get by on universal credit has become harder still since coronavirus. Not being able to compare prices of food in different shops, for example, is making budgeting harder than ever. “I used to go to two or three shops several times a week to seek out the best prices, making sure I got the most out of my money,” says the former teacher, who is bringing up two young children alone.
On top of that, the children being at home means extra expenses. “I need more food, more gas and electric, with them being in and at home 24/7, and I want to get them little things to keep them entertained. But I just don’t have the money for it,” she explains. “The food banks that I used to rely on are now reserved for the most vulnerable.”
McCausland, who has been on the benefit since 2018, is far from alone in having to rely on universal credit. Extraordinarily high numbers of people in desperate need of a financial safety net have applied since the pandemic began. In the fortnight to 30 March alone, almost a million new claims were made for the benefit. In Northern Ireland, where McCausland lives, the number is 33,000 – a tenfold rise in the normal rate of claims.
Coronavirus: the week explained - sign up for our email newsletter With the fast-rising number of claimants as a result of the pandemic, forthcoming research I undertook with a colleague on the implementation of universal credit in Northern Ireland, funded by the Joseph Rowntree Foundation, could provide valuable lessons for the rest of the UK.
While the people we spoke to, like McCausland, had mainly negative things to say about universal credit, they experienced the benefit differently because of being resident in Northern Ireland.
This distinctive landscape, largely a legacy of recent conflict, includes higher levels of economic inactivity than the rest of the UK (but lower rates of unemployment) and higher levels of disability. While social security policy in Northern Ireland has traditionally mirrored that in England and Wales (what is known as the principle of parity), political opposition to the coalition government’s 2010-15 welfare reforms contributed first to the collapse of the Northern Ireland assembly and then to a range of measures designed to shield citizens from the worst effects of the benefit changes.
In England and Wales, universal credit is paid monthly, with the housing element going directly to the tenant. By contrast, in Northern Ireland, people are paid fortnightly and the housing payment is made directly to the landlord. This means that recipients have shorter periods to wait between payments. While there have been teething problems, if implemented effectively it should mean that claimants do not have to worry about paying rent to their landlords, making arrears less likely.
Maria Thompson: ‘A month is far too long to make such a small amount of money last.’ Photograph: Paul McErlane/The Guardian
Maria Thompson, a single parent in her 30s from Belfast, says her family would really struggle if faced with monthly payments: “There is no way I could manage. A month is just far too long to make such a small amount of money last. As it is, I run out of money every week and have to borrow from family until my next payment comes.”
In Northern Ireland, recipients also benefit from a package of “welfare mitigations” introduced under the 2015 Fresh Start agreement, which includes supplementary payments to benefit claimants to offset both the bedroom tax – which reduces the amount of universal credit received if claimants have spare rooms – and the benefits cap, which limits the amount a household with no one in paid work can receive in benefits. The bedroom tax supplementary payment is especially important because of the high level of under-occupancy in Northern Ireland, and the difficulty for many in moving because of the enduring segregation of the housing stock along religious lines.
Alan Harris, who is in his 50s and has longstanding health conditions, receives a supplementary payment of £55 a month to mitigate the bedroom tax, as he lives alone in a three-bedroom property. Harris, who moved to universal credit after the death of his mother, for whom he had been caring, has lived in the same house since it was built more than 30 years ago. He cannot imagine moving, but nor can he afford the £73 to meet the rent shortfall. “If I had to pay that extra, I just couldn’t do it,” he says. “I would have to get a wee one-bed flat, but one-bed flats are like gold dust around here.”
In Northern Ireland, there is also a contingency fund, which provides discretionary non-repayable financial support to help with the transition on to universal credit. Although many people have found it difficult to access, and information about it hard to find, recent changes mean this should improve in the future.
With the Northern Ireland assembly now back up and running after a three-year hiatus, politicians have agreed to extend the package of mitigations, but also look at how these might be further expanded. If some of the proposals being discussed – such as a new mitigation for the two-child benefit limit – are introduced, this will lead to further divergence in universal credit implementation at Stormont.
Of course, universal credit in Northern Ireland, as elsewhere in the UK, still drives debt, creates and exacerbates mental health problems, and affects whole families in profoundly negative ways. As McCausland puts it, the benefit is “financially crippling and emotionally bruising people”.
The coronavirus pandemic is exposing the significant shortcomings with our social security system. While the chancellor has increased the standard allowance for universal credit by £20 a week over the next 12 months, and suspended sanctions, these changes could be only temporary measures. The five-week wait for the benefit continues, and the government is still collecting advance payments that claimants have to pay back, even during this crisis.
Back in Belfast, McCausland hopes that the growing number of people on universal credit will lead to long-term changes to benefits and action on child poverty.
“The government has finally realised people just can’t live on the amounts they get on universal credit,” says McCausland. “But this isn’t news to people like us, who’ve been on it for months and years. What we need now is for politicians to get rid of advance payments, provide better advice and information to new claimants, and stop the benefit triggering debt. Most of all, start really listening to those of us on the benefit, who know exactly what needs to change and why.”