In December last year we wrote to our two MPs and the council Leader highlighting a spike in rent arrears as a result of Universal Credit. We called on them to press the government to change the Universal Credit rules so that claimants should continue to receive their existing benefits during the period when the UC claim is being processed. This would stop them being thrown into rent arrears. We also asked that claimants who received free prescriptions should be able to keep them during the waiting period when the UC claim is being processed.
We received a collective response from them which failed to address the issues we raised. You can judge for yourself be viewing their letter here 18.01.02 DR_JT_RB.dcc.MW 4825-1 .
What follows is a further letter we have sent them clarifying the situation faced by claimants, and asking them to actually answer the issues we have raised.
Thanks for your collective response to my email.
Can I say first of all that the statistics I quoted in relation to rent arrears were incorrect. The error was the council’s owing, I am told, to some computing issues. The accurate picture as of December 3rd was worse than the figures I quoted.
There were 1,080 council tenants on UC. Of these 829 were in arrears, or 76%.
The arrears owed by UC claimants were £700,587. Overall arrears for all tenants were £1.308 million. So UC arrears comprised 53.5% of all arrears for current tenants.
The average owed by UC claimants was £845.09, nearly double the average for all tenants in arrears.
You can judge the impact of Swindon going onto UC ‘full service’ in November 2016 when arrears were £894,903 as compared to £1,308.547 on December 3rd 2016; an increase of over £400,000.
Regrettably your letter fails to address the main purpose of our email, raising with you the steep increase of housing arrears resulting from the implementation of UC ‘full service’. Insofar as you mention it at all you say that “The evidence nationally actually shows that the vast majority of arrears relate to the period prior to moving onto UC.” Certainly the evidence in Swindon is contrary to this suggestion. Whilst 25% of our council tenants are in arrears, the figure for tenants on UC is 76%. There can be no other explanation than the fact that people moving from ‘legacy benefits’ to UC suffer the infamous six week plus waiting period when their ‘legacy benefits’ are stopped. The Housing Revenue Account is suffering financially the consequences of the waiting period. The housing department is expecting the situation to deteriorate. The proposed HRA budget for 2018-19 includes an increased provision for bad debts of £320,000. The document to the forthcoming CMAG says this is “as a result of tenants moving to Universal Credit”. Moreover, with 3,000 more tenants eventually having to transfer to UC the potential for increased arrears is especially worrying.
Even if your assertions about UC as a system were correct, which is a discussion for another day, there is no justification in stopping benefits and imposing a waiting period on people who are very poor. They are being penalised for no other reason than the introduction of a new system. The so-called ‘advances’ are in fact loans, so the system is driving poor people into debt from which they will find it difficult to escape, even if they have 12 months instead of 6 to repay them.
Your explanation as to the “unrecoverable automatic payment” (the two weeks extra housing benefit) is ironic given the fact that the government is making savings by stopping housing benefit for at least 6 weeks. But why should it be stopped at all? If somebody is receiving HB as part of the ‘legacy benefits’ and they will receive it under UC, why should they not receive it during the period when their UC claim is being processed? What rational reason is there to stop their HB? Any adjustments can be made when they start receiving their UC payments.
There is no practical reason why claimants who transfer from one benefit or more to UC, for whatever reason, should not continue to receive their ‘legacy’ benefits during the period when the UC claim is being processed. The only purpose of the wait is to save the government money at the additional cost of the stress that claimants suffer.
Unfortunately you have not responded to the second issue we raised with you, namely the stopping of free prescriptions during the period when claimants are waiting for their UC claim to be processed. As we said previously this is an unnecessary risk to the health of claimants. If they have no or insufficient money they will either have to go without their medication, in the case of multiple medications stop taking one or more of them, or borrow money to pay for them. We know of tenants locally who have found themselves in this predicament. Do you support stopping peoples free prescriptions? Perhaps you could address this question.
One final point. You say that people currently only move to UC if they have a change of circumstances. You use the example of unemployment, which is a rather convenient one for your argument. But all manner of changes of circumstances lead to people transferring to UC. The Child Poverty Action Group gives these examples:
An ESA claimant fails the Work Capability Assessment and tries to claim JSA pending a ‘mandatory reconsideration’ (i.e. the claimant appeals against the result of the assessment). In a “full-service” area like Swindon “this will always result in the abolition of income-based JSA and income related ESA”;
A JSA claimant in a full service area becomes sick and tries to claim ESA instead;
A claimant in a full service area not already on tax credits has a first child and tries to claim CTC;
A lone parent loses his/her entitlement to IS when her/his youngest child turns five, and they try to claim JSA;
Someone in a full service area on JSA becomes a carer and cannot manage JSA conditions;
A couple separates or forms and there are attempts to make new IS/JSA claims.
CPAG says that changes should not result in a UC claim effectively being required if they merely lead to a current award or payment of a legacy benefit being changed rather than prompting a new claim. They give the example of an ESA claimant failing the WCA, requesting a mandatory reconsideration, then appealing and getting an ESA pending appeal, but at no point making a new claim. In some full service areas the DWP is claiming that the individual can only get UC pending appeal. Far from simplifying the system it is being complicated. We know from claimants locally that they are receiving contradictory advice from staff in the local DWP office. Even the staff find the system complicated.
Irrespective of one’s opinion of UC or how it may operate, if and when it applies to everybody, the fact is that it penalises claimants who, for whatever reason, transfer from existing benefits over to UC. Rent arrears and prescription charges are two examples. We have illustrated the extent of the impact in Swindon in relation to council tenants and the Housing Revenue Account. It is, we feel, an entirely reasonable suggestion to our local representatives, that they press the government to stop claimants being driven into rent arrears, and losing their entitlement to free prescription charges, during the period of the processing of a UC claim. Moreover, the sharp rise in arrears has an impact on the HRA. Arrears are money which cannot be spent on the upkeep of our homes.
Secretary, Swindon Tenants Campaign Group
January 16th 2018