October 1st, 2016

Overhaul of credit system stirs alarm

Overhaul of credit system stirs alarm Overhaul of credit system stirs alarm
Updated: 10:16 am, May 07, 2015

THE BIGGEST shake-up of the country’s welfare system since the 1940s is set to be introduced in Redditch.

Universal Credit will begin operating in the borough from February when it will be available from the town’s job centre.

Initially only single jobseekers in Redditch will be eligible to claim Universal Credit with the aim to roll it out fully by 2017.

The scheme merges six out of work benefits – income-based jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit – into one single sum.

This will then be paid directly into people’s bank accounts on a monthly basis, instead of weekly or fortnightly, to mirror actual working life.

Those receiving help paying their rent will in future be responsible for paying the money out of their Universal Credit money to their landlord, instead of it being paid directly under the current system.

The aim is to simplify the system and make work pay by helping people to earn more when they are in work and reduce the amount they receive in benefits accordingly.

At the same time because the job centre staff will have access to earnings data they will be able to ensure those on low incomes who need their earnings topping up will get additional support.

But there have been concerns about the implementation of the scheme and how prepared people are for the changes.

The majority of referrals to Redditch Foodbank are due to changes or delays with benefits payments and there are fears it could add to the growing demand they are facing for emergency food parcels. Borough council officers have also expressed concerns it could cause their rent arrears to rise.

Coun Mark Shurmer, responsible for housing on the borough council, called it a ‘cataclysmic’ change and officers were doing as much as they could to prepare people.

“Simplifying the system, if it works, is not a bad idea but it is the transition that perturbs me.” he said.

“There’s going to be a lot of money coming to some people and they have got to budget with that for a month, also when you go from fortnigtly to monthly pay that’s going to be six weeks and that’s going to be a big problem.

“You have to have faith in people and we have got do our bit but the Government has got to do theirs so people understand what they are receiving.”

But Minister for Welfare Lord Freud said they had already seen Universal Credit claimants moving into work faster and staying in work longer, elsewhere in the country.

“O r work coaches in Redditch Jobcentre will give claimants tailored support they need to get into work and for the first time will give people support when they are in work to earn more.”