In Focus

Benefits vs. costs: is Universal Credit fit for purpose?

The system was designed to make claiming simpler - but critics say it creates ‘misery’

Boris Johnson has hinted that emergency universal credit payments may be extended beyond March in order to “make sure people don’t suffer” while Covid-19 lockdown measures remain in place.

As pressure grows on the government to extend the temporary £20-a-week payments, the prime minister told MPs yesterday that he will “look after people throughout the pandemic”.

Johnson made the pledge during a parliamentary debate ahead of a vote on a non-binding Labour motion calling for the top-up to be kept in place. The Tory leader told his MPs to abstain, but six Conservatives defied the order to side with the opposition in the vote, which passed with 278 in favour and none against.

Campaigners and charities say the £20 payment is a lifeline for the more than 5.5 million families who receive the standard universal credit allowance.

However, the system as a whole has been dogged by controversy since being introduced in 2013.

Universal credit was designed “to make claiming benefits simpler”, the BBC says. It replaced six benefits – including income support and housing benefit - and merged them into one payment.

Former Tory work and pensions minister Iain Duncan Smith, who devised the system, has insisted that “we will be grateful for universal credit” when looking back on the pandemic - and is calling on MPs “to stop trying to make it a political football”. 

In an article published on the i news site last month, he argues that under the “clunky” former system of benefit payments, “we would have had queues at Jobcentres snaking round city centres” as unemployment numbers rise.

Universal Credit supports people who have jobs too, Smith continues, including “those in work, in part-time work, in-between work and looking for work. The system will support them all.”

However, opposition to his brainchild remains strong both inside and outside of the Commons.

The New Statesman’s UK editor Anoosh Chakelian has argued that the way the scheme is “designed and automated” is “pushing people into poverty” and “creating misery” for claimants.

She highlights the method of means testing, which is based on the claimant’s past calendar month of earnings and is calculated by a “poorly designed” algorithm. “This means that irregular shifts, frequency and dates of payments, and fluctuations in a person’s earnings can be misinterpreted by the system - leaving some with very little income the following month because their earnings have been overestimated by the algorithm,” Chakelian writes.

The Spectator’s assistant editor Isabel Hardman is also highly critical of the system, arguing that its greatest flaw “is the shocking loss of money that some claimants face”.

Another major problem “is the amount of time it takes for claimants to receive it, which can leave many of them unable to cover their rent and so on”, she adds.

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