Universal Credit Benefit Switch Could Spell Misery for Many, MPs Warn

MPs have issued a warning that thousands of vulnerable people could lose their welfare payments as a result of a major Universal Credit benefit switch.

Universal Credit Benefit Switch Raises Concerns Over Potential 'Real-World Misery'

Six previous payment schemes are being replaced with the Universal Credit system, which will serve just under a million new claimants.

However, the bipartisan Public Accounts Committee expressed concern that many people would evade the system during the transition, leading to “real-world misery”.

According to the government, the great majority of tax credit recipients successfully transferred to Universal Credit (UC).

Currently, the Department for Work and Pensions (DWP) is attempting to enrol just under a million individuals in the Universal Credit system.

Approximately 4% of claimants, or 40,000 people, according to DWP projections would find it particularly difficult to convert. However, a National Audit Office audit from February warned that 21% of households had experienced problems making the switch and had their payments halted.

The Public Accounts Committee (PAC) stated that face-to-face support is required for the transition because these are vulnerable persons who may lose their benefits.

Concerns Mount Over Universal Credit Rollout

Committee chair, Labour's Dame Meg Hillier said if the transitioning process “fails even an apparently small proportion of people, it will lead to real-world misery for thousands”.

“We must not forget how massive a change it is to how benefits are delivered, impacting millions of people,” she said.

“The DWP must make sure that people are not cast into financial hardship due to a bureaucratic change, and that robust support is in place for those vulnerable claimants who need it most.”

Six previous benefits, including Working Tax Credit, Child Tax Credit, Housing Benefit, Income Support, income-based Jobseeker's Allowance, and income-related Employment and Support Allowance, are being integrated into a single UC payment. The move was announced in 2010, but as of March last year, almost 2.2 million homes had yet to adapt.

In a speech on welfare reform last week, Prime Minister Rishi Sunak promised to “accelerate moving people from legacy benefits on to UC to give them more access to the world of work”.

She declared: “Warnings like the PAC's are coming thick and fast as the DWP steamrolls on with managed migration, leaving vulnerable claimants in its wake — without the benefits they are entitled to and need.

“The DWP must put its spreadsheet targets aside, slow the roll-out of UC right down.”

A DWP spokesperson highlighted: “There is a range of support to help people move, including dedicated helplines, extensions and transitional protection for those who need it.

“Universal Credit is having a sustained positive impact on the jobs market, with people on Universal Credit more likely to be in work within three, six and nine months of their claim.”