Briefing: Westminster Hall debate on Universal Credit and Debt
Briefing: Westminster Hall debate on Universal Credit and debt
Since Universal Credit (UC) has been rolled out, worryingly, increasing numbers of people are coming to Shelter for help after experiencing multiple problems with the new benefit system. They are being forced to make up shortfalls, where their UC housing element (or Local Housing Allowance) does not cover their private rents, having to accept prolonged periods with no payment or having to take out further debt through advance payments knowing they’ll be hit by high deduction rates later.
Our benefit system is ultimately pushing people into debt and other hardships, and putting them at risk of homelessness, rather than being the safety net so many of us need.
The Local Housing Allowance (LHA) rate freeze must come to an end and rates must be restored to reflect at least the bottom 30th percentile (i.e. the cheapest third) of local rents. Those receiving the housing element under UC, for their private rent, would benefit from this
There needs to be a robust mechanism going forwards that keeps LHA rates covering at least the 30th percentile of local rents in the future, regardless of fluctuations in private rents
The five-week wait at the start of a UC claim must be abolished
At the very least, the advance payments remain easily available but are changed from a loan to a grant. This would seek to mitigate against the high deduction rates on the income of those who have taken out an advance