Changes to the payment system of the new Universal Credit could cause ‘significant hardship’ for families on the lowest income, according to a new report by a think tank.

Sink or Swim: the Impact of the Universal Credit, published by Social Market Foundation, explores what impact the new reforms will have on low-income families. It found that the changes risk pushing families into debt, with most households opposing the move to a monthly benefits payment.

Most households are also against the proposal that social housing tents manage their own rental payments, rather than the money going directly to the landlord, claiming this could lead to rental arrears and eviction.

The SMF are calling for families to be allowed to opt-in to an online budgeting tool, enabling claimants to determine the frequency of payments. Dr Nigel Keohane, SMF Deputy Director, said: ‘The Government’s laudable aim that Universal Credit should prepare families for work, boost their resilience to financial shocks, and simplify the system is at risk of backfiring. ’By moving to a single monthly payment for all benefits, the Government is removing the markers and aids that families currently rely on to budget effectively. Our research shows that this will throw people in at the deep end leaving them either to sink or swim.’

Follow the link below to access the full SMF report:-

http://www.smf.co.uk/media/news/think-tank-reveals-universal-credit-at-risk-of-backfiring-and-pr/

Source: LocalGov.co.uk

Link: http://www.localgov.co.uk/index.cfm?method=news.detail&id=106940

17th September 2012

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