Universal Credit remains universally discredited. It provides significant disincentives for working parents to increase their income. Universal Credit was supposed to simplify and improve access to social security, make it easier for people to manage the move into work and reduce administrative costs; however with its in-built rules and cuts it entirely fails to meet these aims.
When the Conservatives introduced Universal Credit (UC) back in 2011, it should have been an opportunity to build on Labour’s game-changing tax credit system. By consolidating various benefit systems, UC was meant to make the benefit system easier to navigate. The system could have brought about improvements for those most in need. The Conservatives, however, snatched defeat from the jaws of victory, by severely cutting funding – hitting the poorest households hardest.
Usdaw has consistently called for a fundamental overhaul of Universal Credit and how the Government supports the incomes of working people. We need a proper social security system that supports families and provides a proper safety net. This week we bring that call to the Trades Union Congress in Brighton.
Usdaw is asking Congress to support a call on the new Labour Government to positively promote properly funded social security and employment reform as an integral part of a functioning modern society. As a first step, we want the Government to urgently convene a taskforce to set out a timeframe for introducing measures that address the injustices and flaws within the current system.
Labour's approach to Universal Credit must make work pay, support people into decent jobs, end poverty, offer a proper safety net and promote equality. That would be in stark contrast to the Conservatives, who failed working families. Usdaw’s most recent cost of living survey found that a staggering 83% of members who are in receipt of in-work benefits reported that they feel worse off now than they did 12 months ago. A truly shameful record.
We thoroughly condemn the Conservatives’ dismantling of the welfare state. We look forward to working with a Labour Government to develop a proper social security system that supports workers. That alongside a new deal for workers to make work pay, which will seek to tackle low-paid and insecure employment that blights our labour market.
To reach these goals, the taskforce must commit to abolishing the two-child limit. This cruel cap has hit a record 1.6 million children living in families affected by this controversial policy. Our economy faces a demographic timebomb, with an aging population and falling birth rate; it simply makes no sense to punish those who have more than two children.
Removing the five-week wait period, which serves no purpose, would avoid putting claimants into unnecessary debt from which they struggle to recover. Social security should be paid from day one of a successful claim. To administer this, a system of non-repayable advance payments, rather than loans, would ensure individuals and families get the support they need, when they need it.
Reforming work allowances and taper rates will help ensure that work pays. Reducing the ‘clawback’ would put an end to the ludicrous situation where low-paid workers claiming Universal Credit currently have an effective marginal tax rate of over 70% on additional earnings. Under the current system, working extra hours while on UC can leave families feeling worse off.
Most people who work shifts are paid weekly or fortnightly. In retail, four-weekly pay is the norm. The Conservatives clearly demonstrated their lack of understanding of the lives of working people when they made Universal Credit a monthly payment.
This causes havoc to those paid four-weekly, because they have 13 pay periods every year, and therefore once a year they are paid twice during a ‘calculation month’; this means their Universal Credit payment for that month is either greatly reduced or, in some cases, stopped and they have to reapply to restart the benefit. This must be rectified as a matter of urgency.
The roll-out of Universal Credit has been a chaotic disaster and there are still significant administrative flaws within the system that need addressing. We need an end to the punitive system of sanctions, which can suddenly throw families into desperate circumstances, and claimants should be able to have their claim reviewed and adjusted by a Department for Work and Pensions adviser rather than relying on computer systems. There has to be a change in government culture: we need statutory provisions to ensure that any future changes to our social security system cannot be introduced without meaningful consultation with claimants and their representatives.
With a black hole in the budget left by 14 years of Tory economic mismanagement, we recognise that this Labour Government is facing huge challenges. But a proper social security system that supports families both in and out of work is essential to return our economy to growth and ensure everyone reaps the benefits of future prosperity. After 14 years of being ignored, we now have the opportunity for a Labour Government to listen and deliver.