Is universal credit working for working people? – Usdaw members’ experiences

Since 2010, the government has ignored rising child poverty while repeating the mantra that work is the best route out of poverty. Work is indeed a factor in escaping poverty, but it needs to be secure work, with a decent wage, decent hours and prospects. In-work poverty is on the rise with 70 per cent of children growing up in poverty having a parent who works. Together with colleagues at the Union of Shop, Distributive and Allied Workers (Usdaw), we set out to discover how the introduction of universal credit has affected Usdaw members.

Usdaw recently surveyed members receiving universal credit (UC). The results show that UC is not always supporting people out of poverty through work, or even upholding the early promise that “no-one will experience a reduction in the benefit they receive as a result of the introduction of Universal Credit”. Only one out of 25 respondents said they were better off on UC and nearly half reported being worse off. The biggest losses were borne by families with children, with one couple reporting a loss of £250 a month and a single parent losing as much as £320.

Getting hold of their entitlement, such as it was, wasn’t an easy process. Nearly half of survey respondents reported finding the claim process difficult, very difficult or even impossible – and only two of those received help with their claim. Difficulties included having to attend Jobcentre appointments around work hours and having their claim closed so having to start the claim process again.

Since the removal of the waiting days at the start of a UC claim in February 2018, claimants should be receiving their first UC payment within the 7 days following one month from the date they started their claim. Over half of survey respondents reported waiting more than 5 weeks for their first UC payment. They’re not alone, the latest DWP statistics revealed that 97 per cent of new UC claimants received some (not necessarily all) of their UC on time in October and November 2018, meaning around 8,731 families waited more than 37 days to start receiving any entitlement. 

When UC is finally being paid, claimants do not always understand the amounts they’re getting so it’s harder for them to predict how their awards might change, or to pick up on mistakes. In June 2018, the DWP’s Universal Credit Full Service Survey reported that over 40 per cent of claimants have an award that is different from what they expected. The same survey found that around 30 per cent of people did not agree that their UC account makes it “clear what entitlements I am being paid for”. It appears that UC awards are even less clear to Usdaw members. In December 2018, over half of survey respondents said they didn’t understand their UC awards, perhaps reflecting the extra complications of working and claiming UC.

Complying with the UC claim conditions can be an ordeal as well. Respondents to the Usdaw survey were all employed. Nonetheless, nearly two thirds reported being subject to conditionality – meaning that they had to follow certain instructions to avoid incurring a sanction (a reduction in their entitlement that can last for a period between 7 days and 3 years). One respondent reported being told to find work when they were off sick. Another, who worked full-time but only had a 16 hours a week contract (topping up their earnings with overtime), was told that they had to attend Jobcentre appointments and keep looking for a job with more contracted hours, in addition to working their full-time job. The latest ONS figures estimated there are currently 1.8 million zero-hours contracts active in the UK and 10 per cent of those are in the retail sector. It is of some concern that UC claimants must attempt to buck the prevailing employment trends in their industry in order to avoid a sanction.

Conditionality doesn’t apply to all UC claimants. Every work coach has discretion to set conditions according to each claimant’s individual circumstances, with particular regard to increasing earnings. This amount of discretion can result in situations which appear inconsistent or unfair. In the survey results, one claimant couple with children working 12 hours a week were not subject to in-work conditionality at all, whereas a single claimant working 30 hours a week was required to find better paid work.

In any event, the effectiveness of conditionality and, particularly, in-work conditionality, is disputed. The government has so far refused to follow the recommendations made in the October 2018 Work and Pensions Committee report to refrain from imposing conditionality and sanctions on working claimants for the time-being and focus on providing tailored support.

The introduction of universal credit promised much for working claimants: increased simplicity, support to find more or better work, transparent awards and a helping hand out of poverty. Usdaw members are clearly telling us that these promises have not been fully met and the reality is a benefit that is difficult to claim, difficult to understand and leaves many working people worse off and under threat of sanction. In an economy where patterns of work are changing and in-work poverty is on the rise, the evidence from employees in the retail sector is that UC is a poor fit with their world of work in the 21st century and that there is clearly much to be done to put right the issues for the benefit of Usdaw members and millions of other low-paid workers.