Work and Pensions select committee report on Universal Credit published
The Work and Pensions Select Committee has published its report on the five week wait for Universal Credit, which includes a number of recommendations on reforming the current system.
In relation to the coronavirus pandemic, the report recommends that the Government commit to maintaining the increases in support provided during the pandemic, including keeping the Local Housing Allowance at the 30th percentile and also maintain the £20 a week increase in standard allowance for Universal Credit and Working Tax Credit, with annual inflation-based increases thereafter.
The NRLA campaigned for the LHA to be raised to the 30th percentile, and the association is also calling for this increase to be maintained permanently, and ideally for the Government to realign rents to the median market rents (50th percentile).
The Work and Pensions Select Committee report also goes on to recommend a number of other welfare reforms, including a greater emphasis in the Universal Credit system on payments being able to be made directly to landlords.
The report notes that "anyone claiming an Advance should be given the option, at the outset, of having the housing element of the Advance paid directly to their landlord. This would ensure that claimants’ housing costs are covered during the wait for their first payment, and that they will not face the risk of falling into arrears or eviction as a result".
Other suggestions include:
- A recommendation that the five week wait is scrapped for all claimants moving to Universal Credit through managed migration, including for claimants moving from tax credits
- That the DWP pays all first time claimants of Universal Credit a “starter payment” equivalent to three weeks of the Standard Allowance of Universal Credit. It continued: “This payment should be made two weeks after the initial claim, and only once the claimant’s identity has been verified, to mitigate the risk of fraud. The starter payment should also be given to people who move to Universal Credit by “natural” migration, in cases where it is not possible for them to be moved seamlessly to Universal Credit.”
- That UC advances should be renamed “new claim loans”, so that it is clear to claimants that they will need to be repaid. It continues: “Before a new claim loan is granted in full, the Department should provide personalised budgeting support—when possible, with a face-to-face option—with a full assessment of the claimant’s financial situation and the impact that future repayments of the loan will have on their household finances. We recognise that, for people in acute financial crisis, it may be necessary for the Department to pay part of the loan before this support can be offered.”
On Universal Credit, the NRLA is calling for:
- an end to the five-week wait for Universal Credit at the beginning of a claim, with the advance payment currently made as a loan converted to a grant, so tenants do not automatically fall into debt at the outset
- direct payment of the housing element of Universal Credit to landlords as default
- allowing landlords to discuss a tenant's claim where the rent has not been paid.
On Local Housing Allowance, the NRLA is calling for:
- at minimum, the Government to commit to aligning LHA rates to the 30th percentile of market rents permanently, rather than as a short term response to the coronavirus crisis. We are further calling for the Government to realign rents to the median market rents (50th percentile)
- the Government to reassess the size of Broad Rental Market Areas, so that they better represent the local rental market
- an end to the benefit cap so that tenants can receive the full LHA rate towards their rent.
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