Why coronavirus has left some on benefits £1,000 worse off

The rapid changes in the welfare system in response to the coronavirus crisis have created an “unsustainable” difference in support for people with Universal Credit (UC) and those with older “legacy” benefits, a watchdog warned.

The Social Security Advisory Committee (SSAC) said that UC’s annual increase of £ 1,000 was not reflected in support for those on an employment support (ESA) or jobseeker’s allowance (JSA).

The committee has insisted that plaintiffs receive the same increase as those at UC, with retroactive effect from April 6.

Chancellor Rishi Sunak announced on March 20 the increase in Universal Credit and Working Tax Credit “to strengthen the safety net” for four million households at the height of the pandemic.

But in a letter to Therese Coffey, Secretary for Work and Pensions, SSAC interim president Liz Sayce called for action to help those who are not UC members.

The SSAC was told that the legacy benefits were excluded because they could not be changed quickly or securely and that it would have overcome to overcome “serious IT challenges”.

Ms. Sayce said: “While we understand the reasons for not including ESA and JSA in the original announcement, we believe it is becoming increasingly unsustainable to exclude this group of claimants and maintain a lower income. than those who have received a Universal Credit and Working Tax Credit.

“We recommend the government find a way to ensure that this group of claimants, including some of the least well-off, is brought up to par with those who receive universal credit as soon as possible. . ‘

On “grounds of equity,” the government should consider rolling back the increase to April 6, she added.

The SSAC chief was also concerned about the impact of encouraging the self-employed to claim UC if their earnings declined – only to discover that they subsequently lost tax credits.

“We are aware of cases where tax credit applicants have deteriorated as a result of following early government statements that self-employed workers should claim universal credit if their earnings fell, only to discover they were ineligible and lost their right to tax relief in the process. “

And the committee said the benefit limit meant that some people didn’t get the “full value” of the extra support the government had promised.

“Applicants would normally have the option of doing paid work or moving home to avoid the impact of the benefit limit, but neither is a realistic choice for many people at the moment.”

In her letter to the Minister for Work and Pensions, Sayce paid tribute to the government’s efforts to adjust benefits to deal with the public health crisis.

“Our advice is designed to help address some of the inevitable and immediate gaps or unintended consequences that arise in policy design and implementation and an operational response at such a pace and scale,” she said.

A spokesman for the Department of Work and Pensions said, “We are committed to ensuring that people are supported in these unprecedented times, including injecting £ 6.5 billion into the social security system and rolling out income protection schemes, mortgage holidays and additional support for tenants.

“We have been experiencing tremendous demand since mid-March and thanks to Universal Credit we were able to increase payments at a rapid rate while maintaining the stability of the social security system in general.

“We estimate that 2.5 million universal credit households will immediately benefit from the standard surcharge increase of £ 20 per week. We have also increased other rights, such as the local housing benefit, to better support them for all benefits. ”