Ministers have been urged to relax eligibility thresholds for Universal Credit and be more proactive about encouraging take-up of the core welfare benefit after an unprecedented surge in new claims since the coronavirus lockdown began.
Think tank the Resolution Foundation said the Department for Work and Pensions’ own figures showed there had been 950,000 new claims for Jobseekers Allowance and Universal Credit in the past fortnight, representing a 692% increase on March 2019 – hugely outpacing the pattern seen following the global financial crisis. It said that claims for Jobseekers Allowance increased by 79% comparing February 2008 with February 2009.
The foundation – which focuses on improving the lives of people on low to middle incomes – said the coronavirus outbreak stood out as an unemployment crisis and Universal Credit had been “thrust into the front line of the battle” to help people through an unprecedented economic shock.
It suggested that the existing eligibility criteria – including permitted levels of savings for claimants – were likely to be out of step with people’s needs during an unprecedented time, and that ministers should be both encouraging more people to claim and speeding up payments as part of a plan to make the benefit ‘battle ready’ for its key role in the crisis.
The briefing also called on DWP to adopt a similarly data-focused approach to its response as the health service, with weekly real-time information on the number of claims for Universal Credit, details on processing times and the promptness of first payments. It said the figures would show where resources were needed if the system was not coping – or provide reassurance to the public if it was.
Report authors Mike Brewer and Karl Handscomb said the fact that Universal Credit had not broken down in the face of such unprecedented demand showed the move to a digital-first system had made it more resilient than many people thought while extra resources were making a positive difference.
However they said that with many more claims likely in the coming weeks and months, even if the current surge rates slowed, there was more that the government could do to ensure millions of people got the prompt income support they would need to get through the crisis.
“Many people who lose their jobs will not be covered by the government’s wage subsidy schemes and UC will therefore be their only source of income support,” they said.
“But they may be put off by misleading headlines about it taking five weeks to receive support. The government should therefore advertise UC as the first line of income support, and target higher take-up among entitled groups.”
Brewer and Handscomb added that middle-income households were in danger of failing capital rules tests that reduced levels of support for those with savings of £6,000 or more and which disentitled those with savings of £18,000 or more.
“For a couple with children, who have saved a £16,000 deposit for their first home but have now lost a job, these capital rules would disentitle them to £1,400 of support a month, and up to half their deposit over six months of unemployment,” the authors noted.
They added that ministers could also lessen fears of the “five week wait” for payment faced by new Universal Credit claimants by widely advertising the advance loan system, and encouraging take up by delaying repayments for at least six months.
Brewer and Handscomb said such a move would bring Universal Credit into line with the deferral schemes available to firms and mortgage holders.
Responding to the Resolution Foundation’s call, a DWP spokesperson said the department was moving 10,000 staff to help on the Universal Credit frontline and that it was expecting to recruit a further 1,500 people to aid the effort.
“The prime minister and chancellor have repeatedly encouraged people to claim Universal Credit if their income has been affected, and we keep our website up to date with specific coronavirus information to help people,” they said.
“Urgent advances are available and more than 70,000 new claimants since 16 March have already received one. We’ve also increased the standard allowance so claimants will be up to £1,040 a year better off.”
Last night, work and pensions secretary Thérèse Coffey said paid tribute to DWP staff for their efforts in processing the huge numbers of new Universal Credit claims since the middle of March.
“Universal Credit is standing up to the challenge as nearly a million people have made a claim in the last fortnight and our tremendous DWP civil servants are working flat out to process them,” she wrote on Twitter.
“We know our phonelines and IT systems are busy, but rest assured that we are all on it.”