Five Week Wait For Benefits Money ‘will undermine speedy return to work’

11 Aug 2014

Currently most workers who lose their job have to wait two weeks for their first payment, which allows a relatively normal continuation of cash flow during the initial stages of their job hunt. However, under new Universal Credit rules for assessing unemployment claims, the majority of people will now face a wait of more than five weeks before they get any money, the TUC said. This could mean jobseekers keen to get back into the job market could go two months into rent arrears before any financial support appears.
Under the existing system, most newly unemployed claimants move off benefits within three months, while only one in 10 continue to receive money after a year out of work, TUC analysis found. But nearly 300,000 people across the UK will be affected by the five-week wait each month, the research showed, with London and North West of England expected to be hardest hit with about 40,000 people waiting longer for money in each region every month.
The TUC warned that the longer delay for safety-net payments would push many claimants into financial difficulties distracting them from focusing on finding a new job. A recent report by the debt charity Step Change found that 13 million people do not have enough savings to last a month, with six million people already using credit to manage until payday. In the Universal Credit pathfinder areas, interim evaluation published by the Department for Work and Pensions in November 2013 showed that 34 per cent of Universal Credit claimants had borrowed money, compared to 19 per cent for a control group receiving Jobseeker’s Allowance. Further research by YouGov, for the TUC, found that only 13 per cent of people had heard about the plans, while 70 per cent said that they would be worried when asked to imagine losing their job and not being entitled to receive any benefit payments for five weeks.
Frances O’Grady, TUC general secretary, said: “The government is sneaking through changes that will make newly unemployed claimants wait at least five weeks before they get any cash support. It’s a debt trap that will hit hundreds of thousands of people each month. It’s right to deal with people who abuse the system, but the five-week wait is a collective punishment for anyone who loses their job. People need to focus on finding new work, instead of being stressed out about how they will pay the rent, feed the kids and keep the heating on. The government is out of touch and ministers simply don’t understand the anxiety many people feel not knowing if they’ll still have work next month. If your job goes, the five-week wait puts you at greater risk of a downward spiral where you’re trapped in debt, lose your home, become ill from the stress and fall too far to climb back again.”
The TUC is launching a ‘Saving Our Safety Net’ campaign to challenge the changes.