Universal Credit cut likely to push people into hardship

From Citizens Advice:


Citizens Advice has warned that 1.5 million working people on Universal Credit could be pushed into hardship this winter if their benefits are cut by £20 a week.

ITV News recently noted that the number of people claiming Universal Credit and unemployment benefits in Cornwall has more than doubled in less than a year.

The LEP used figures from the Department for Work and Pensions (DWP) to show there were 48,531 Universal Credit claims in January 2021. That is an increase of 101.3% from March 2020 to January 2021.

Similarly the number of people claiming unemployment benefits in Cornwall increased 106.4% between March 2020 and January 2021 with 18,170 people now claiming the benefits.

Numbers may have increased yet further and there are concerns about the impact of the end of furlough.

The charity is anticipating a surge in families seeking its support as rising energy prices and higher living costs are compounded by the cut to Universal Credit.

Its latest research shows two thirds (67%) of working claimants say they’ll face hardship if the cut goes ahead. This includes struggling to pay their bills, getting into debt or being forced to sell belongings to make up for the shortfall in their income.

Around one in four working claimants – equivalent to 600,000 people – are worried they might not be able to afford food or other basic necessities like toiletries.

Citizens Advice says shop workers, nursery assistants and security guards are among those seeking its help because they’re worried about how they’ll manage over the winter.

Citizens Advice

Many will struggle to make up for the loss of £20 a week 

Around 2.3 million Universal Credit claimants are already in work. A further 1.7 million are unable to work due to health or caring responsibilities.

Frontline staff at Citizens Advice say many people they’re supporting would struggle to make up the lost money by finding work or increasing their hours.

The taper rate – a reduction to your Universal Credit based on your earnings – means someone paying National Insurance and tax could have to work nine hours at the National Living Wage to make up for the cut.

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“With energy bills set to rise and family finances already stretched to the limit, this cut is coming at the worst possible time.

“Shop workers, nursery assistants and security guards are just some of the people on Universal Credit seeking our help because they’re already struggling to make ends meet.

“The government has shown in this pandemic that it’s willing to support people through hard times. With a cost of living crisis underway, it must reverse the disastrous decision to cut this lifeline.”

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